They start by saying they are having technical difficulties and are calling from a cell phone. Not a confidence builder.
The Forward Looking Statements disclaimer is much, much longer and more comprehensive than usual. I don't blame them for this since their forward looking statements from the past few calls now seem like outright lies (or are very close to that... at best very irresponsible speculation and spin... I'm not litigious by nature, but I lost a few hundred K and I'm pretty ticked about what has been said on previous calls right now).
"8th consecutive quarter of net sales growth!" What a joke! Positive spin I guess, but last two quarters were actually pretty terrible in terms of sales growth for a product this new. 3% growth after being guided to expect double digit sales growth at a minimum.
"Efficacious drug." benefits "unmatched." I believe this is accurate. Patients are moving off the drug within 6 months. Actually should be good overall that the medication is "highly effective" and "transformational". I still believe this is a very good drug.
"continue to build value for our shareholders" through a long term strategy of price increases. It will take time for the benefits of price increases to impact sales numbers, but they are benefiting now from price increases last year. - I find the phrasing to be hilarious... CONTINUE to build value? They have been obliterating shareholder value... strategy? He discusses it like this is not a new strategy, but part of an existing long term plan. OK... whatever.
Agreement with SOBI about Kineret. Not much detail. 50% profit share above agreed upon thresholds. I see this as positive, but not extremely significant. It is interesting that SOBI would choose Savient for this partnership and I would love to know more.
Charge related to inventory that won't be sold before expiration. We were told last quarter that they didn't expect any more of these.
Some expenses coming down as expected.
dan -agree.i blew my lid after and during the call.ehh i agree ditto,but im all in.i dont have options sorry about your losses.maybe theyll sell it so meeker makes a litle profit
Sentiment: Strong Buy
Ditto on everything. I'm pretty ticked too! I noticed all the same glaring misleading things you have. Particularly the increase disclaimer language. Especially on the taking time for price increases take effect yeah right - did this Qtrs numbers reflect the price increase or not? Didn't even attempt to explain or gain our confidence on the SOBI deal and when's that take effect - yeah right - not until next year - so much for that! And yeah, you caught the Charge related to inventory that we can't sell - same as last Qtr!
They know they've been bad. I just hope they know how angry the long term shareholders are. Do you have any preference for a Class Action law firm? Not hot to trot yet but it's time to start shopping securities litigation firms, find out whose good, start putting our information together - in the event we can no longer avoid filing. Let me know. I'll be up for it when the time comes.
Q & A continued
EU partnership? Waiting for NICE. Has to be a good deal for both. Should hear from nice soon, maybe at the end of April. I hated this answer. Did not explain at all why what has been stated before has not come to pass.
Financing? "Always in discussions" to address existing debt and bring in new money. Nothing specific to report right now.
Other partnerships similar to SOBI? Open to it in nephrology, podiatry, and/or rheumetology. Very excited about SOBI partnership which is a "great fit". OK by me, fair enough.
Sandy effect on sales? 10 to 15% believed impact. I seriously doubt that level of impact, although there was almost certainly some level of impact. LF also blamed Thanksgiving and Christmas. Unfortunately for investors, those holidays occur every year.
Did kidney function improve in dialysis tests? Don't have data to report yet, but they did look at this and there is biological reason to hope for that. I loved this question and the ultimate answer could prove important.
Medicare patient percentage? How do you help those physicians through price increases? About 35%, they do keep the physicians whole through the process.
Lou closed with thanks and a weather comment.
I feel for these guys. It must be tough to do a call when your numbers are this bad. I don't see what they did to instill investor confidence. They contradicted a lot from previous calls and did so without much explanation. Anyway, I hope you enjoyed my notes. I just typed as I listened.
Heres my take on partenership a nd NIce. Management has already received miltiple offers. All those offer are lowballed bc they were either waitin for nice guidance or came after initial gudiance not recommending krystexxa. Now heres whats importantvto note sbout NICE and krystexxa. First off NICE is not merely some uninterested 3rd party observer. They are in the business of negotiating prices lower.
The two things NICE noted were the cost and long term safety of krystexxa. First the cost. NICE estimated avg 6 month treatment for K would be $35, 000. A ridiculous number considering how K has been used. Second safety, eg infusion reaction, and long term safety. Savient has already demonstrated the long term safety of K, and published the abstract a few months ago. As for infusion reactions. NICE noted that reactions were unpredictable. As explained already this was bc in clinical trials, the uric acid levela were concealed. Such that patients who responded positively were continued given K. Later trials showed that when patients dosage was adjusted or stopped, based on u ric acid levels infusion reactions droped by 2/3 to under 8%.
To state briefly all of NICE's concernd are either unfounded or have been addressed. I have no doubt NICE will recommend K within its label. Savient is smart to hold out from accepting offers until NICE finalizes its guidance. In the end it will mean a lot more value for svnt.
Interest expense for quarter is still over 1 million more than the sales revenue.
96.3 Million in cash and short term investments. Anticipated to last until 2Q 2014. Seems about right to me, but that doesn't mean they don't have to worry about it before then.
Clinical results on kidney dialysis complete and to be presented. That is good.
Immunogenicity work discussed as progressing. That is important work. I don't see how they can afford to do it, but it sounds like they intend to try.
Induction Maintenance pushed back until after Immunogenicity. Said this will save cost by involving less patients. True, and honestly they can't afford to do the work. The drug needs to be owned by a larger company (my thoughts, not said on the call).
"We have made significant headway on executing our plan" LF in his closing remarks. I wish he would be more candid, but I guess it is tough. "We are very excited about our future..." I don't think he did a compelling job of explaining why.
Sales growth due to price increases or actual growth? Were sales basically flat? They answered in generalities. IMO, sales volume had to actually be down to have only 3% growth in sales dollars with at least some benefit from the price increases.
Expectations for this quarter? Not good due to insurance issues getting people set up for the new year. They mentioned this after poor Q1 numbers this year.
Patients treated trend? They have never given guidance on that. Patients are moving on and off the drug, usually after about 6 months. LF suggested that we could probably figure it out. IMO, a terrible answer. Just start answering the questions honestly where you can. IMO, they have a pretty good idea of their patient count.
Patient starts? IMO, a fair and good question. Answer basically that patient starts is about the same as patients coming off the drug. Looks like that is pretty much true. If that continues it means that the ONLY growth will be through price.
Very comprehensive and accurate.
One note , the interest expense by my estimates includes about 2 mil for interest and about 4 mil towards principal reduction per qtr.
Sales growth due to ineffective and incompetent Sales personal who are probably spending most of their time looking for another job. But their numbers are so bad that no one will hire them so they stay and yield the stench of failure.
It is time to FIRE THE ENTIRE SALES AND MARKETING TEAM AND SELL THE US MARKETING TO A MAJOR PHARMA.
THEY CAN DROP COSTS TO THE BONE EXCEPT FOR THE CONTINUING R & D
Dan, now that I've finished reading all of your minutes - thank you very much - excellent job. So good I've bookmarked it for quick future reference. You're either a fast short hand note taker or have an excellent memory. Everything you've written I heard on the call too. kg