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Vertex Pharmaceuticals Incorporated Message Board

goof_goof93 9 posts  |  Last Activity: Aug 31, 2015 8:01 PM Member since: May 15, 2004
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  • HZNP is not at $37 anymore and it won't be for near or far future.
    Lets pay DEPO $25 with all shares before HZNP goes lower.

  • HZNP wants to issue shares for acquiring DEPO even though its shares are $8 cheaper.
    Basically, the offer will be something around $25 or lower with today's price.
    After all, DEPO shares were around $21.50 when HZNP offer came.
    Well, DEPO is not making money and it has cash burn for next few quarters and it takes it a few years before DEPO can show some money. $25 is very expensive for a stock that does not make money and also does not have anything that will change the losing course in near or far futur.

  • Reply to

    HZNP still buying DEPO on open market

    by sherryjohn727 Aug 31, 2015 1:23 PM
    goof_goof93 goof_goof93 Aug 31, 2015 2:04 PM Flag

    HZNP can have a deal with a broker or fund to buy the shares at a discounted prices with its money but then transfer them to HZNP later after acquisition is completed. If no deal, then HZNP have to pay the fund if there is any losses.

  • goof_goof93 by goof_goof93 Aug 30, 2015 11:19 PM Flag

    HZNP is desperate but it is baking at wrong tree. It seems that HZNP is running out of option and it wants to force DEPO buyout. On the other hand, DEPO is not that hot and it struggle to survive, however DEPO managements want a permanent job with free hands. They are not ready to retire with a bone that HZNP throw at them. DEPO needs to show some money and enough with trick accounting to show high income. They need to be honest, with high expenses, they cannot get anywhere.

  • What HZNP is doing is like helping a guy in ghetto but then the guy resists better and different life. He thinks that he has better future in ghetto, may be he can be a gang leader someday.
    I think, DEPO is good for its BOD and its top level management but not for its shareholders.
    If DEPO had money or bringing over $150m of revenue per quarter then we could say there is a chance but DEPO struggling to break even without any other alternative to change its future. It may increase the sales force to show some revenue but a cup cannot hold any more water than a cup can contains.

  • goof_goof93 goof_goof93 Aug 30, 2015 3:46 PM Flag

    DEPO has 3 options
    1- Acquire more drugs for utilizing its sales force as soon as possible which is impossible with its current financial.
    2- Sell the company
    3- Do nothing, pay over 10% of interest rate for borrowed money, pay an arm and leg to drug salesmen and accumulate plenty of debt until it runs out of money. There will be no miracle and DEPO is lucky if Nucynta prescriptions can reach the number before acquisition. 44% price increase turned off many doctors.

    Where will DEPO gets any break with following numbers
    1- $23 m cost of revenue that is going higher with higher sale
    2- $58 m administration and sales force
    3- $20 m interest
    4- $9 m R&D, legal expenses, one time and others.
    Total is $109 m for basic expenses without taxes.

    DEPO needs to bring over $110m of revenue per quarter to break even and probably much more in future.
    Now with higher salaries and interest rate and no progress in Nucynta and also competition for Nucynta then DEPO will be dead.

    A company like HZNP can reduce administration and sales force expenses significantly and reduce the interest rate to something near 2% and cut over $50m to $80m from expenses. After all, HZNP know how to sell drugs and DEPO just is trying to learn and experiment.

  • Until HZNP acquisition news was out a few weeks ago, DEPO shares were struggling to hold $21 and investors were scared to see $20 and lower prices. Yes, I was about to dump depo shares at low $20.
    After all, this Nucynta is not that hot and its sale is dropping.
    DEPO paid an arm and leg to get it and JNJ squeezed all Nucynta juice before giving it to DEPO.
    NUCYNTA has extremely high cost of revenue, something above 30% after paying royalty.
    DEPO has to hire hundreds of sale representative but still the sale is down. Increasing the price, DEPO could show some revenue but number of prescriptions have been down.
    Now, how about the interest that DEPO is paying for borrowed money. It is paying over 10% interest rate when interest rate is sitting at zero. DEPO paid over $22 m of interest in Q2 2015.
    Finally how about convertible bond which will dilute the shares eventually.
    With debt and convertible, DEPO hands will be tied to do anything for years and if NUCYNTA does not sell as it is expected then the share price will be around $20 or lower again.
    I do not understand why HZNP wants to get DEPO at any price above $28 anyway. HZNP should let DEPO shareholders to suffer with low $20s for a while and then offer $27.

  • First of all, it will dips to lows of yesterday for sure based on majority of analysts.
    Second, China and japan are down significantly but US is not yet.
    4.5 years without any correction, you must be kidding. It is pay back time.

  • goof_goof93 by goof_goof93 Aug 25, 2015 6:44 PM Flag

    Jason has to warn soon. China is dead with its fake economy.

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