Ok longs, since you are pining for pk/adam/666 to post you must dying to sink your teeth into some type of argument.
I'll oblige. What exactly is there to be excited about here in the long term?
Fusilev revenue is falling
Zevalin revenue is going nowhere even with ROW included (you have a lot of BIG talk from the CEO but nothing to back it up)
Short interest is up again
Folotyn did show a nice increase
All summed the only thing that moves you from a 7 PE and $11 - $13 range coudl be FOL or an approval for A or B.
Obviously any approvals are not priced in and should not be, but they could be game changers.
I donh't think I have ever seen an actual short post any reason for the shorting here. There have been lots of Long/Analysts opinions on the "short thesis", but IMO it's all their conjecture.
I think longs should try looking outside the box. The shorts have no basis here that any longs can truly understand. So don't give me the "X" days to cover story. That's thinking "inside the box" and I claim you're deluding yourself when you go there.
IMO all the valuation strangeness hinges on the CEO and the market reaction to him. As long as he is in place "outside the box" is where you need to think.
Fusilev revenue is falling............but, more importantly, is number of units are up.
As generic ramps up, it is expected that price needs to be lowered to keep market share. I am more impressed at this stage with unit sales, not sales totals.
Market penetration is numero uno, when facing generic competition.
I agree with you that the true Shorts will never post their reasons on a message board. I bought SPPI not for fusilev but for Eoquin. Fusilev have been the biggest luck and blessing for SPPI and all the shareholders on this board. Here's my two reason and for one of them, I am very fearful. If outcome is successful, Fusilev will maintain a $200+ Mil per year drug with or without generic Leuco.
1. I am still fearful on the ANDA for Fusilev and the challenge to the patent by SANDOZ and INNOPharma. 20+ mil shares of short interest all in the Jan-Sep 2012 time frame. The shorts are counting more on the invalidity of Fusilev than Generic Leuco. I'm not worried about generic leuco, the business case of fusilev will trump generic leuco. I'm worried about generic fusilev. The clock is ticking and 12 months have now gone by. I don't know status of the case but FDA can't " approve of the application until the generic company successfully defends the suit or until 30 months, whichever comes first."
"On January 20, 2012 and February 17, 2012, respectively, we filed suit against Sandoz Inc. and Innopharma Inc, respectively following Paragraph IV certifications in connection with their filing separate Abbreviated New Drug Applications, or ANDAs, to manufacture a generic version of FUSILEV. We filed the lawsuits in the U.S. District Court for the Districts of Nevada and Delaware seeking to enjoin the approval of their ANDAs plus recovery of our fees and costs incurred in such matters. While we believe our patent rights are strong, the ultimate outcome of these cases is uncertain."
2. Personal vandetta against Raj for private investors who lost a ton of money back in 2008-2009 with private placements of warrants that expired worthless. There were others that made good money but they sold out their shares back in 2011.
Sentiment: Strong Buy
inquis, There you go with the "the shorts thesis is". Maybe so, maybe not. I stull think your No. 2 is more viable, but I have no idea just my opinion. The threat to Fusilev though is amplified by the challenges.
You mentioned several of the long term objectives... however, keep in mind, some may be more near term than you think.
Zev has show an uptick with world wide rights. Yes, not as much as you would like, but the potential is there. Add Japan to that mix, and who knows what happens. I even wonder if Japanese pharma companies have been mentioned as possible suitors for SPPI because of this. Look, we all know it's best in class. The question is whether or not it will materialize as a revenue driver. If it does, look out PPS. However, I will agree that you can't count on it until it happens.
FOL has replaced revenue that F lost over the last couple of months. That's huge. SPPI was never fairly priced because of the questions around F. With another drug to add to revenue, why shouldn't this go up? Plus, how much more downside is there to F? My guess would be, not much... especially if more product was ordered in Q4 than Q3. Q4 is usually a lower month due to holiday issues.
A and B are still long shots... but good to have in the pocket.
So, that's my long thesis. Don't tell me you're back on the LOL kick again. I don't mind the short argument, but make it like a man..... not a PK.
I think the focus has been on Fus as that has been the earnings driver, if the other drugs CAN ramp up, then even a flatline Fus could still allow us to grow substantially. But sales and earnings are what I will be watching the next couple of quarters. My average share-price is ~$5 or so, but I want to sell for a big number so I will continue watch and re-evaluate my position.
Just my thoughts,
I think the shorts believe that SPPI earning in general are ephemeral and will ALL go away.
Zev: $7.7M for 4Q12 was a massive disapointment for me as we have sold that much prior to acquiring WW rights. The implication is that we only acquired rights, and probably not sales/distribution and therefore sold ZERO ex-US in the last two quarters. I will be watching the Zev sales number over the next two quarters closely on this account.
Fus: Several years ago after the first brief shortage momentarily went away, Fus sales DID goto zero. It does appear that 4Q12 demonstrates that Fus can now compete and maintain market share in the face of full competition with Sagent and others now reasonably able to meet generic-Leuco demand. However, we will have to prove it with 1Q13 numbers in particular. Since the big salesforce kumbaya didn't happen will early-mid Feb the 1Q13 numbers might not be that big a step above 4Q12. The size of this step could influece the shorts, but a small step could keep them around till 2Q13 numbers are released.
Fol: Under Allos, Folotyn was selling about $50M/yr so $14.4M is 4Q13 is interesting. However, Allos lost money due to their cost structure, and if you look at SPPI profit rate for 4Q13, $8.6M on $70+M sales bears watching. I will be looking at Fol sales next quarter to see if they are growing, as well as quarterly earning to see if they reflect a more efficient cost structure than what we bought from Allos.
As I stated I don't see any uptick in Zevalin and hasn't Japan been in play already?
Not back on the LOL kick, just thought some longs would enjoy swinging at a real post rather than one who's not here at the moment.
I did not intend my post to be a short thesis, but more a "this stock will remain in a tight trading range until an A or B approval takes place". But of course that's IF any approvals take place. FOL may also be a wild card though.
I was hioping one of the "the shorts are trapped and low volume is a good thing" longs would have responded, but they have not so far.
Well, the answer depends on what you call "long term". If it is 5 years down the road, the following drugs are currently at least in phase II: Belinostat, Apaziquone, Lucanthone, Ozarelix and SPI-2012, plus Renazorb and SPI-1620 which will start phase II this year. One or several of them might be approved by 2017/2018.
If long term is 2-3 years, you have to think that Belinostat and/or Apaziquone can be approved, that Folotyn/Fusilev combined leads to higher sales of both drugs, and that advancing the pipeline might reflect some of its value in the stock price.
If it is less than a year, well, that would not be long term, but if you want to be optimistic, you can believe what Raj and Ken don't stop saying each time that they have a microphone: That Fusilev sales are not going anywhere and that revenues and operating income will be higher in 2013 than in 2012.
It is enough for me, I don't think I am selling any share for now...