Rodney, I am not saying the company won't succeed. I believe it will. I am just saying that the stock price is being heavily pressured by the biotech crash... we should not expect too much unless there is a fundamental very near-term catalyst.
In a bull market, CYTX was extremely weak.
In this market, with money and partnerships scarce, all it takes is a puff of air to knock down the stock price. There are many companies that have a much better financial and pipeline situation than CYTX which are valued below NET cash, some 50% below.
So, in this environment, it should actually be trading at maybe 15m total market cap, not 35. (or, if you believe Google Finance, 2.6b.. yikes.. how is it that even Google can't do reverse splits correctly?)
Yes, the CEO and some other management is overpaid. He should take a 70% salary cut. That is also an issue, though it is really an issue with quite a lot of microcap biotechs because they have taken advantage of the biotech boom in the last few years and given themselves exorbitant salaries. But, if you reduce their salaries, in this case, you are saving maybe, what, 800K a year. That won't save the stock price with the last Q burning 5M.
I saw the prospectus SEC filing. They should have done a market analysis / NPV / "how much money will this make?" slides if they really want to lure in investors, I think.
Just one partnership will change everything, though. But, again, given the fairly dry market these days, it is really difficult to give the odds on this.
I think that almost anyone who reads that PR would strongly believe it was entirely made up, and/or part of a Dr. Seuss book.
They are not. james_5050 is absolutely correct.
Management must disclose material news within 4 business days. That is the law.
Also, this drug is exactly bioequivalent to hydrocodone/acetaminophen. It is not less effective when taken as prescribed, in any way. Oxaydo may be, though, if this article you mentioned is correct.
Oxaydo was approved before abuse-deterrence labeling guidelines were designed. It is _not_ labeled as an abuse-deterrence drug and they did not receive any such label yet. They need FDA approval for a label change following a Category 3 trial for that.
"Apparently this is where Kempharm went wrong -- they were unable to provide the FDA committee enough evidence to show that their drug couldn't be snorted."
That was not the purpose of the committee meeting, or the drug.
No abuse-deterrent drug to date makes it "impossible" to snort it.
The purpose was to understand whether the nasal route of abuse was relevant in a hydrocodone/acetaminophen drug, and most of the committee said it was. The acetaminophen already acts as somewhat as an abuse deterrence for snorting at over two or three pills, because it creates nasal side-effects when used in large quantities. (This is why the Liking trial was two pills.)
The combination of the ligand with the generic makes the high lower than it would have been. It prevents the extra high from snorting compared to generic, and thus acts as a way to discourage "gateway abuse". (to cocaine, etc.)
It seems you are both insinuating that a reverse split will dilute your stake in the company. Unless this is tied to some other mechanism like dilutive warrants, a reverse split will not dilute.
Okay, it was Zogenix not Purdue. Purdue did have an agreement with Zogenix on allowing the sale of its own product though.
I have read that they have applied (again?).
By the way, PTX did not run the original trials. That honor went to Purdue Pharma, which solid Zohydro to PTX recently, I believe. Purdue also sells OxyContin, which makes it a LOT of money.
PTX is a highly leveraged sales organization, essentially. Conversely, Kempharm is a research company with very low cash burn and something close to 105m cash on the books right now. The price of the stock is priced for complete and utter failure.
Finally, Zohydro is ER, not IR (extended/immediate release). The committee really applied the wrong test to Apadaz. It's much harder to beat overall liking scores when you are comparing IR to IR.
Finally, the IR market, especially for hydrocodone/acetaminophen, is really big. Hydrocodone/tylenol is the biggest sub-market out of all the painkillers today.
So let's say very conservatively that the company gets 2% of the market and makes $.50 per pill in income. In 2015 there were 5.9 billion pills prescribed. Let's say in 2017 there will be only 5 billion.
.02 * 5,000,000,000 * $0.50 = $50m. So we are talking half the current market cap yearly, and that is just for this one indication. I think this is extremely, extremely conservative.
The other opioid combos, as well as the ADHD market, will probably be huge, as well.
Achieving 2% of the market is very easy when state governments (and then the FDA) start taking IR pills without any abuse deterrence off the market. They could get maybe 30% of the market (though, will likely get less revenue)
If they get 25% of the market at $0.30 profit per pill (keeping in min, current pills cost maybe $1 on average -- guessing here, they are all different doses):
.25 * 5b * $.3 = $375 million. In this scenario, the company from just this product is worth maybe $1.875B. I think if you add up all the products in development (especially if they start making serious money in 2017 with accelerated development due more $), it could be closer to a $3-5B.
pbulljuan, can you tell me what specifically you are talking about here? Congress stepping in -- when and how?
Zyhydro ER was actually approved in 2013 (Wikipedia says 2014). I think the reason it does not have the abuse-deterrence label is that the guidelines for that were written in 2015, and FDA decided not to give the label.
No, it is exactly the same in terms of everything you mentioned.
The two differentiating characteristics are abuse-deterrent characteristics:
1) It's very difficult to extract pure hydrocodone from this.
2) It has a lower and less rapid high if snorted, and snorting side-effects are bigger.