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DepoMed Inc. Message Board

  • tek_jansen500 tek_jansen500 Aug 2, 2011 11:11 AM Flag

    What happened on CC? Anything bad?

    I can't find a link to listen. If someone could post a link to the CC, I'd appreciate it. Otherwise, was there anything unexpected and bad? The press release didn't have any surprises, so why the sell-off?

    I'm long just trying to figure out if I should be discouraged by the drop, or if I should buy some more.

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    • Fabian,
      Since you now appear to have a bunker mentality (with hard hat as well I presume), I imagine you were buying today (as well as buying at low 8's, all through the 7's, and now into the 6's). Yep, it's hard to see your 'educated' buys turn to dust overnight.

      But really, after listening to the CC, what valuation do you place on DEPO stock at this point? To be more precise, what valuation would ANALYSTS place on this company? What data do they have that guides them to quarterly or annual revenue?

      I didn't get any sense that they had a firm grasp of the company's potential now. In fact, I couldn't fill out my valuation spreadsheet for this company (where I enter data for quarterly revenues, SG&A, R&D, etc). Thus I can see why some would sell and buy later: when the situation becomes more clear. And that I think is the main reason for the sell-off.

    • from the bunker I feel 2nd 3rd comments hit it right on all the way and do agree with some other points from other posters

    • Well said!

    • "Jim has experience with selling companies."

      I think various people have hit on the reasons for the big downdraft today, including:

      1) Some institution(s) wanting/having to sell out for whatever reasons

      2) Many folks thought that JS was a caretaker CEO, brought in to sell the company. Recall all the banter about how he was commuting to HQ, and how everything had "sell" written all over his appointment as CEO? Seems those theories are in the toilet now.

      3) Different CSOs for different products. No synergy whatsoever! So the solution, according to JS, is to bring in drugs ready-to-sell. There is no clarity on the revenue from that piece of the new business model.

      5) Break-even for Gralise sales: no clarity whatsoever. So how do you value the company without insight?

      6) Even the excitement from great P3 Breeze results will die off since it will take a year or more to get FDA approval to sell it.

      7) The castle-on-the-shining-hill (old DEPO under CP) has now been thoroughly vanquished by the brick-and-mortar-shop-on-the-river. Whatever CP had sold to us investors (me included) is forever gone. Investors need to get with the new reality.

      8) As I said yesterday, I'm always looking for the 'rocket fuel' that will propel this stock higher. It's hard to see anything until this fall. So it's back to wait mode. I still haven't bought back into DEPO, as I think there are other more worthy stocks to be had. This down draft, though, sure looks like a good entry point for someone wanting to dabble. The risk: continue general market weakness as the prospects of a double dip recession loom.

    • IMO JS should not have speculated about going it alone with serada & then topping it off with further verbalization about buying some late stage drug which depo could commercialize. That go-it-alone 'rapture' could only come to fruition by stockholder dilution. I thus would have preferred JS had not travelled down that speculative road ... not at this juncture.

      Shoot, I sometimes wake up during the night hoping serada is successful & someone then buys depo and cancels the gralise cso ... so I can go back to sleep all happy. Only in my dreams. What a nightmare today is, however.

    • There were also some pessimistic implications from an analyst about 1) Gralise and Serada will have single-product sales forces, and 2) single-product sales forces traditionally haven't done very well.

      And then management mentioned they're trying to bring new, late-stage products in to leverage their sales force(s). That could be an expensive proposition.

      And they seemed to imply that any partner they bring in will be a minority partner, which suggests it won't be J&J or other major player, which some investors may have been hoping for.

      Overall, I like the direction, but I can see how it might have scared some investors off.

    • Found the CC. Maybe some were put off by their statement about payers. Something along the lines of "We expect tier 3 or better coverage by many payers." I might have hoped for something more favorable than that.

 
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