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POZEN Inc. Message Board

  • play_tow play_tow Jul 29, 2014 10:01 AM Flag

    Diverging from HZNP....Reality Returns

    Yesterday's fall was a knee-jerk reaction tied to HZNP.

    Today, HZNP down another 8%, and POZN up 2%.

    Folks recalling that the reason they own POZN is about PA (approval yet pending...).

    US VIMOVO sales guaranteed at $7.5M minimum from HZNP per contract for all years after 2014. That was a savy deal to POZN's benefit, as recent events indicate.

    ROW VIMOVO sales royalty will also increase from 6% to 10% beginning in 2016. IN 2016, the V franchise will be paying all the bills. The PA franchise (if approved, which is very likely) will pay all the free cash flow to the shareholders (If POZN is still independent, which is unlikely...)

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    • Great thread, everybody here gets it!

      Sentiment: Strong Buy

    • HZNP should be able to cover minimum royalty payment despite that CVS/ESI are dropping insurance coverage - from their Q1 10-Q:

      "VIMOVO gross and net sales during the three months ended March 31, 2014 were $50,010,000 and $34,007,000, respectively, after deducting sales discounts and allowances of $16,003,000, including co-pay assistance costs of $4,587,000."

      POZN gets 10% royalty on NET sales, min $5M in 2014, min $7.5M from 2015 on - net for Q1 was $34M * 10% - $3.4M, subtract 30% of sales coming from CVS/ESI, you get net sales of $2.4M/Q, or $9.5M/yr - easily covers POZN payments. Huge over-reaction by the market, they didn't look at the numbers, shoot first ask questions later.

      From shortanalytics website, 25% of POZN shorts covered yesterday - that's actually good news, surprised more didn't take the opportunity to cover, ain't going lower than yesterday any time soon.

    • I just bought 5K of HZNP. This news will have no effect over time. Walgreens will benefit as will every PMB because of CVS dropping out. Ins will still continue to Pay!

      • 1 Reply to matrixmania55
      • Good move, nice gain yesterday although today different story of course. Sort of wrong thinking for CVS to say they won't sell a combo therapy med like V because you can get the 2 separately for less. There is no research that supports their supposition that taking separately is the same as a layered delivery. Trying to save money for the insurance I get but they are playing doctor without a license IMO. In either case HZNP will work around the problem by going thru other channels.

        Probably Pozn's warrant value took a big hit however, how does everyone think that affects the upcoming quarter results?

6.45+0.14(+2.22%)12:57 PMEDT