PTX now are $30 mil richer from the sale of some of their products/business. PTX goal 2013 through 2014 is putting all their newer products out by flu season. So if things go well, this stock price could move up a lot. If sales go slower the stock price should still move up, but slower. I sure would try the chocolate cough syrup. That should become huge (Over the Counter). Just so one overdose on it. I would spend a little more for a product if he taste is better than other products on the market. They also will start a Phase III clinical trial.
If they can get some good ads out for the sleep drug and eventually go over the counter (which I believe is their goal See Below) that too could become a huge seller. PTX just needs to do it right and be more aggressive. All investors can do is wait and see what 2013/2014 brings. But the risk are now much lower since PTX has $30 Mil more to help expand their products.
(Do note the whole market is overextended and with a possible government shutdown stocks could move lower.)
Completed Acquisition of Cypress Pharmaceuticals and Hawthorn Pharmaceuticals
Completed the Acquisition of Somaxon Pharmaceuticals in March 2013
Announced Plans to Launch Dr. Cocoa, an OTC Chocolate Flavored Cough & Cold Product Line
Looking forward in 2013, we are focused on several key objectives that are expected to drive the Company’s future growth, which include the following: integrating Cypress and Hawthorn, re-launching Silenor by our newly-combined Pernix and Hawthorn sales forces, initiating our Phase III clinical trials for our pediatric product, launching Dr. Cocoa, an OTC chocolate flavored cough and cold product for the 2013-2014 cough and cold season, beginning the development of Silenor as an OTC product, and working toward the IND filings of two products in Hawthorn’s pipeline. We are also capitalizing on the synergies of our acquisitions, and improving efficiencies across all of our operations.” Less
The primary reason PTX sold the portfolio of products for $30M-ish is b/c there is an outstanding put option with the former investors in Cypress/Hawthorn. In January 2014, PTX is obligated to repurchase up to 4.5M shares of PTX stock that it issued as part of the purchase price. The put is priced at $5.38/share. That means PTX is on the hook for approximately $24M come the new year. Considering that the stock has been trading below that price since March of this year, I would imagine that the Cypress/Hawthorn crew will be exercising.
As of the June 30 10-Q, the Company had only $9M in cash (prior to the product sale) and negative working capital. Considering the fact that PTX had generated no operating cash through the first 6 months of the year, this portfolio divestiture could be characterized as a fire sale. The cash will NOT be reinvested in any value-creating products or projects. It will go to pay for past sins.
Also would like to make a quick note; in July analyst Cantor downgraded PTX after their quarterly report and purchasing Somaxon Pharmaceuticals. He had his low price of $2.50 where PTX is resting. Looks like the street listened to him. Now we are heading forward and PTX is looking for stronger earnings and product movement.