Same platform, just additional drug delivery forms, including a liquid that hasn't yet been approved.
Not a huge move, but anticipated to rise smartly. Tech has to stabilize before Adesto floats their S-1. Metabolon may be first. Don't expect their crown jewel, D-Wave to come out this year. They still need to do more validation work and get third party authors publishing in a major physics journal. Board needs to step up and deal with expenses. Could see a new raise in the form of a convert, but that's all just a guess.
and then we had a bounce. Stock may appear to be tired, but the markets they're addressing are large. They need help cleaning up their balance sheet, perhaps with a new strategic investor.
Nice pickup in volume today. Sellers are almost out of the way. Stock will only move if there's an announcement of an IPO filing, but that could come any day now. Call option pricing shows future intrinsic value. Stock requires alot of patience and I admit, that I've been too early. However, if you take a position now and leg in on the rally, you have time compression on your side. The trick is to trade before the S-1s are announced. I expect to see a 1-2 punch.
Management is very stock-savvy. Latest rally is due in part to short covering by convertable bond holders, as any move above 19.30 means they're losing money. They'll probably float another convert soon, with a conversion price around 26. The stock may drop short term, as new shorts come in, but once it settles, it will reach that point. Since this model works for them with less dilution, there's really no need for them to price a secondary at a discount to the market, especially when they're only paying 2.5%.
Thie IPO candidates in their quiver are just sitting on the sidelines for now, watching the other outcasts testing the waters. Soon they'll be ready to pounce and before you know it we may see a sizeable gain. If investors are willing to pay 20 cents for the June 5 calls, then they may know more than I do.
Big seller in the morning. No bids were in place. Looked like sloppy selling. Stock is good for a trade ahead of phase 2 HCC results. If they can get a publication in a major journal, it will help reimbursement in Europe. Americans with liver cancer will take a medical holiday if they can schedule the procedure. I would pay out of poclet the 100K if there were no other options.
Short report was out and said that choline sales are down due to layoffs in oil patch. Choline is an enivronmentally friendly chemical used in fracking. Company denies any change in choline sales projections. Short report also said recent acquisition isn't going well. We shall see.
Torrid volume continues. They may issue new bonds sooner rather than later, which could also explaion the retracement today.
This drug was developed by Grunenthol, a Company formed after WWII which took in alot of #$%$ physicians and scientists. As a child of Holocaust survivors, I feel terrible knowing about this Company's checkered history, not only employing scientists who did medical experiments in the camps, but also developed Thalidomide (without every apologizing) to those affected with unformed limbs. However, if I can make money on this stock and donate to worthy causes, I feel it's the best revenge.
As a combo narcotic and noradrenergic agonist, Nucynta also acts as an anti-depressant. Just think how many patients with chronic pain are also depressed. This opens up a new target specialty group of heavy prescribers, namely psychiatrists (who are always vying to differentiate themselves from other mental health providers). Leave it to the German chemists to figure out a way to deal with chronic pain.
The rights include 3 products, plus possibly others in development that we won't know about until after the closing. They have been bidding on this franchyise for a long time. Based on Jim's comments during the CC, it appears that JNJ put Nucynta rights out for a competitive bid. Since DEPO saw it as the best fit they came out with the high bid (perhaps that's what that extra $50 million is all about). Any convertible bond offering at a significant premium to share price is imputitively non-dilutive. While DEPO may appear to be heavily levereged after the closing, increased profits can easily amortize the cost of the acquisition. However, they will have to increase sales so that the mix is 2.5X forward estimate of revenues (as telescoped). Depo's franchise value will go up in tandem with the value of Nucynta which is why they're plugging in all these extra salesmen. They appear to understand financial engineering and stock market percpeiton. The only advice I'd give them is to fold the Lazanda salesforce into the four Gralise/Lucynta team. With smaller terriroties they should see oncologists and pain specialists in the same medical office buildings.
Having worked in pharmaceutical sales, I recognize that synergy with the remaining product mix helps to propel revenues. They needed a large product to gain credibility with the neurologists and pain specialists whom they call on. Not only will DEPO's sales force do a better job than JNJ's existing CSO, but Nucynta sales will increase interest in Cambia, Gralise and Lazanda. These other products will gain traction and the sales force will have greater access to the physicians whom they service. Too bad the overall market is weak today.
The old convert holders may cover their shorts now and then buy the new converts when they're priced at a 30% premium. The convert holders that didn't short will get out with a profit. The ones who cover now will break even. The road show will be easy because they can pitch the new loans to the same investors. They may also be able to float a low rate coupon on the other tranche of junk bonds they referred to in their CC. A small equity raise may also be in the cards to strengthen the balance sheet. I have a gut feeling that Lazanda is also performing better than expected.
The fact that they can do such a bid deal which is accretive within a year is impressive and will get some big institutions involved. Once they absorb Nucynta, tey can put themselves up for sale.