Bumping Alan's post on the higher "short interest" true of VVUS last fall-- His link shows where to find the latest. Last report was for Feb 15, showing 28M, so a decline of 2-4M from last fall. My belief is the total decline, measuring 4M from the Oct 31 max, splits into TWO PARTS
**2Mish used by traders, seen last Fall going in-and-out of short interest, and
**2Mish newly detected, borrowed by a longer-term short who returned that many to a big lender this year
TO WATCH FOR, NEXT. More borrowings returned? The next report date takes a snapshot of borrowed shares held overnight, after the Feb 28 close. The report's two-week period, ending Feb 28, spanned the expiration of the February options, which had a big "toxic put" expiring at $8.
JB, shaggy's mom, 2014/03/04
Good thread. knowing the royalty/yield matters for forecasting revenue & earnings. Had forgotten the upcoming milepost that depends on the FDA approving a label change. That's in a queue, so won't come up for consideration until Sept? is there a request for comments from the public at any point? Then or before?
JB, Shaggy's mom 2014/03/03 at Vivus board
Ukraine troubles took the markets down today, with the London exchange showing steep drops before our markets opened.
AUTO PATTERNS. AssociatedPress/AP articles show up in multiple media, found a copy at ABC News:
1) In general, sales down YOY. Economics matter together with cold. [Comments-- Announced earlier--Dealers had fewer selling days due to closings in snow-blasted regions. People spending more on heating oil meant they had less to spend everywhere else. Plus, outward "ripple" continues from govt. "sequestration" in the second half of 2013 which cut pay and work schedules 2-4 weeks, scattered timewise. This affected retail sales in general, not just autos.]
2) Those brands that sold more vehicles than in the warmer Jan of last year did so by offering higher discounts
Krisher names brands and numbers. He does not do regions (you'd assume the southwest saw fewer dealers close in reaction to cold weather).
*Volkswagon saw the biggest drop in units sold (-14%) Ford did almost as poorly.
*However, Ford pick-up sales were up. (That could be due to the best regions for pick-up sales differing from the Midwest, where Ford sells more cars?? If so, in the warmer south, construction season happens earlier, boosting pick-up sales there when auto sales stay steady.)
*Krisher says "At the end of January, dealers had an 89-day supply of cars and trucks, according to Ward's AutoInfoBank."
Krisher said JD Power rarely releases discount numbers by brand to the general press, so AP seeing some of them so quickly is unusual Were they the usual discounts to get older models or unpopular colors off the lots? That's not said. What was said:
*Chrysler boosted discounts on its RAM pickup. (Maybe that's a reaction to Ford's pickups doing well? )
*However, discounts on average across all pickups were less than a year ago Jan.
JB, Shaggy's mom 2014/03/03
Sharon, I'm out as I can't fight a kajillion analysts. 1) The flatness in Qsymia scripts appears due to cutting the discounts, not anything else, so once that settles out, the old growth could/should resume,. 2) The REAL reason for this is that too many analysts are investment houses that buy and sell options, either themselves took the wrong side of some huge options trades, or advised clients to do so. That caused the huge options mess in January..
This is the second time I've seen them do this after a TOO BIG january options set-up expired dramatically. The first was with Ford, after their long-lived January calls expired deeply IN the money one year. The other time is now, with Vivus, but this time the January calls expired deeply OUT of the money. One common theme is that both setups were extraordinarily large, so the MM hedging had to be huge for both.
The big unwinds were different, but equally toxic.
*Ford calls, bought in the recession, became deeply valuable by Jan 2011. Big call sellers for Ford were relieved of shares they thought they could keep, but found themselves given piddly cash in exchange. They wanted the shares back, cheaply.
*The Vivus put sellers found themselves getting shares without having offsetting calls roll forward, so dumped shares received the week after expiration. Maybe expecting price to go lower later? That raised cash.
For both, annual earnings then came out. For both, the analysts used some temporary things caused by the environment to declare Armageddon. For both, a huge morning take-down resulted.
With Ford, analysts pretended it was all Ford's fault not to warn them of an unpredictable and temporary rise in commodity prices. They acted like Ford would do horribly on future earnings (it didn't, their earnings grew). Here, it's too few doctors prescribing either Qsymia or Belviq (for now, will change).
Most Ford analysts took over a year to reverse their joint downgrades, with good news ignored.
Mooky, i think you're great, I think the product has tons of potential, but this is one thing that makes me get out. Maybe my getting out will make the price go up! Umpteen brokers saying bad things at the same time is over my limit. ML flashed 4 red notices at me as I logged in this morning.
Those of us without subscriptions to 3rd-party estimates from Symphony and IMS have been in the dark lately. It's been hard to know, for example, if Symphony counts had, post-holidays, exceeded the peak count back in November, pre-holidays, and then stayed above.
Vivus has its own counts, done a bit differently. The direction shows growth over the prior quarter, though we certainly would like to see more"
"For the fourth quarter of 2013, there were approximately 124,000 Qsymia prescriptions dispensed, an increase of approximately 14% compared to the third quarter of 2013. Prescription volume for the fourth quarter was impacted by the holidays in November and December."
COMMENT CEO Mr. Seth Fischer had told us before that discounting would be cut back. Did that include fewer free trials, not just fewer of the normal "x% off" coupons? If so, no longer giving something away, "for free", will slow down sales growth, but increase earnings, which is what was seen in Q4.
JB, Shaggy's mom, 2014/02/24 & 25
"Cash, cash equivalents and available-for-sale securities (cash) totaled $343.3 million at December 31, 2013, as compared to $214.6 million at December 31, 2012"
JB for 2014/02/24
(1) The News--ACTUAL RESULTS BEAT ESTIMATES. Analysts were all over the place in estimating Q4 and 2013 (wide ranges). Despite little consensus, Vivus beat by a wide margin, thanks to...
**a big reduction in selling costs (discounts disappeared for a majority of Qsymia scripts) and
**Stendra/Spedra licenses producing cash, with some early royalty revenue (poster Mooky called this right)
...Vivus seems to have beat ALL estimates for Q4 income.
...Vivus came very close to beating the best revenue estimates, as well.
For Quarter ending Dec 31, 2013
Actual loss (17 cents)
Range (18 cents) to (64 cents) across 10 analysts, Estimated average (40 cents),
.............where $44M= $9.2M Product + $34.8M License/Commer. (Did I do this right?)
Range $8M to $46M across 12 analysts, Estimated average $28M.
Actual loss ($1.72)
Range. ($1.31) to ($2.20) across 11 analysts, Estimated average ($1.90),
.............where $81M= $25.2M Product + $55.8M License/Commer. (Did I do this right?)
Range $45M to $83M.across 12 analysts, Estimated average $65M.
Beware. Do your own DD. I'm famed for bad typos that my brain tunes out until too late. I've flagged parts you should double-check.
Price up, in reaction to 8-K (PR report), out at the closing bell
It regards the 10-Q (official quarterly report) that will show up later.
**Announces new insurance coverage & the two patents that longs have been talking about
**Mentions new stands taken by 3 med/physicians groups recommending prescription of obesity medication
$6.6991 LOW After-market low, as reported at Nasdaq_c*m (may be some exchanges, not all??) .
$7.18 HIGH After market high, ditto
$7.06 CURRENT PRICE ,last time i checked, when "after market-volume" had hit 253,853 shares
Presentation started at 4:30 pm Eastern (3:30 pm Central, 1:30PM Pacific)
Will be archived at Vivus website later for public listening
Click on Events
Pay attention to analyst questions and answers
JB, Shaggy's mom 2014/02/24 4:11pm central time
Cash & near-cash will be the most important number, but it was pre-anounced.
From Yahoo's link with Analyst Estimates
For Q4, ranges across analysts are very wide
That's also true for the 2013 annual numbers.
Annual estimates clearly were not adjusted much to reflect the Q3 report, unless the analysts have removed one-time events that won't repeat (costs of FMC takeover and of related expense of layoffs-at-the-top)
Estimating $28M for Q4,
This contrasts with under $2M same quarter last year, when sales were just beginning for Qsymia..
The range across 12 analysts is $8 to $46M, so huge.
Annual Rev given by the same analysts for 2013 ranges from $45M to $83M., average of $65M.
Note that three quarters have already reported, totaling under $37M.
Note that adding the estimates for Q4 on to that $37M gives the annual estimates.
The estimates thus are consistent, show updating to reflect reality
Estimating loss (40 cents) for Q4,
The range across 10 analysts is that loss will be (18 cents) to (64 cents))
Annual EPS for 2012 loss ranging from ($1.31) to ($2.20) across 11 analysts, average estimate is ($1.90).
Yahoo says EPS guesses remained basically UNCHANGED over the last 90 days, with the average declining one penny around 30 days ago.
Time for bed
Have done value stocks and under-valued growth stocks since the mid-90s. There are some key rules that are predictive long-term. To the extent they are violated, I'm OUT.
As a researcher by profession, well-trained, any trends hiding in the numbers pull me IN or send me OUT. (The number of pre-diabetics, a Qsymia specialty, is very large, 2 to 3 times bigger than the number of diabetics. Diabetes is really expensive to treat, so, better to catch it early. Plus, insurance companies can no longer turn away pre-diabetics due to pre-existing conditions. It's merely a waiting game until they cover Qsymia and start urging doctors to use it.)
*There has to be enough cash. Burn could have been $35M each for Q3 and Q4 had FMC not imposed takeover & layoff costs. They promised that savings will make up for their excess burn of $20-$30M. We'll see. Cash is still decent for now.
*There has to be adult supervision while any "teenagers" in the biz (FMC) get up to speed. I LIKE DEBT that is reasonable & well-managed & LOVE LENDERS putting supervision clauses into the paper (Pharmakon).
*The risk-reward ratio has to be high. (Zero risk means no reward. Opportunities occur when upside is large.)
*On the upside, ML once gave $30 as a price target, true IF x, y and z happened (picked apart the ML models here last year, saying what x, y & z might be.) My experience with ML analysts? They tend to be right on the high targets, just a few years too early.
*After a price takedown, the analyst's criteria, x, y, & z, have to stay mostly achievable, or I'm out.
*I don't care about the analysts' demolished, too optimistic time frame, so long as cash exists to "buy time" for achieving x, y and z.
*Risk? Divide the range between 0 and that old target of $30 into thirds.
$0-$10 obviously near a bottom, "low risk, high reward" buy points,
$10-$20 middle risk,
$20-$30 too risky until x,y,z achieved.
You HAVE to have a long time frame, or you will be flim-flammed into selling too cheaply, too soon. My deadline for VVUS turning cash positive is two years, not this month or next quarter.
1) QSYMIA PATENTS. The newest patents, method and composition, done separately to be extra-strong, were granted in mid-Nov. They thus are not yet in most analysts' valuations (VVUS price targets)
The new patents doubled the remaining Qsymia patent life from 7 years (peak revenue in 2020) to 14-15 years (peak revenue in 2028-2029). That MORE than doubles cash flow projections (common way to assign value to the Qsymia part of the biz). The added years would be pure profit, with no burn years expected in the second half of the patent life. What's hard to predict, first-half?. Exact years of burn time. My guess is two.
2) CASH. Finding a partner reduces burn time, but any BP too greedy should be rejected Vivus has over $300M in raw cash and short-term US Treasuries, can survive a longish burn time, but must gather more cash to expand its marketing.
3) CVOT BURN & BENEFITS Some massive studies of rare CV events will burn cash, with rate educed by spreading the costs out over multiple years. The studies are to confirm what most already know, that
**Qsymia uses two well-known ingredients, long approved by the FDA
**Doses are smaller than when used singly, with Q combining them in a special way to improve effectiveness
**That side effects go down as dosage declines
**Thus, side effects should be less than in prior uses.
4) STENDRA. Even though Stendra may be the fastest-acting ED drug out there, people do not know about it yet. Income won't show up for a few quarters. I could be wrong. For example, direct sales could be diverted from selling Qsymia to instead helping Auxillium sell Stendra. (Unlike BP/distributors, direct sales reps can be redirected by the manufacturer, to a different product, without re-writing contracts with BPs.)
JB, Shaggy's mom 2014/02/21
Have been researching this for my due diligence, so will share. 'Pre-diabetics" are people with blood sugar rising over time, now exceeding the normal levels. They are not deemed serious enough to merit insulin use, not yet anyway, but could/will need insulin if the blood sugar levels keep crossing, and cross the line that signals full diabetes.
**Numbers: Prediabetics probably outnumber full diabetics by a factor of 2 or 3 in the US.
**Trends: If doctors can stop or reverse the progression from pre- to-full diabetes, the well-known side effects related to diabetes go down, true even if the person is not full diabetic yet. This includes cardiovascular issues
**Trends: Baby boomers are in a prime age group for this, but other ages see pre-diabetes too. The quality of the daily diet matters, plus there can be an inherited tendency.
**Trends: The obese of any age are especially prone, but people who are lean or borderline on weight can benefit from medical treatment and a better lifestyle (diet and exercise).
**Numbers: Even for people who are only a bit overweight, research apparently shows that even a 5% reduction in weight can cut in half the probability of advancing to full diabetes A 7% reduction would be even better. (These numbers are cited as if they were well-known, but I have not yet found the original study).
**Treatment Dangers. Rare for pre-diabetics, but mattering to full diabetics are hypoglycemia issues (blood sugar swinging too low, extra-dangerous at night).
For pre-diabetics, Qsymia submitted very good results to the FDA. (See recent study by Garvey)
For full diabetics, there is Belviq, which did well for its group. That was a multi-drug study, with results boosted for half the patients, both placebo and Belviq-treated, by some older drugs (Metformin, SFU) on top of any insulin given. Hypoglycemia being a concern, it's important not to "go too far", so not everyone would be strictly treated.
JB, Shaggy's mom 2014/02/21
(1) That vote was very close, so next year's vote could go the other way. (2) VW was for it; there's a lot of research that say happier workers are more productive workers. The Europeans know this. (3) The opposition for now lies in the cultural geography, the aging elders in TN that make that geography different from even nearby Ohio.
**Tennessee is southern US, not very urban, a double whammy that says "do it the old way no matter what, as it's what your elders are used to".
**TN became a "right to work" state in our parents' lifetimes. "Right to work" resides in the same brain place as "Slavery was good for Black people, I don't understand why they complained" .
**The younger generation thus waits for both mom and dad and the grand folk to die off so changes can finally be made. Do the math. That means constantly being 25-50 years behind everybody else on everything.
It's true here in TX; you quickly notice that the SAME aging subset holds both views, anti-union, pro-racism, red-faced and fist-clenching when they argue,
CHURCH INVOLVEMENT. History books say a specific religious denomination worked to pass the now aging anti-union legislation. That subset made anti-unionism a church matter, an 11th commandment, not a matter of personal opinion. "You'll go to h*ll if you join a union" is actually preached. Preaching against racism and other bigotries is rarely done inside that religious subset's churches.
These preaching policies are enforced "at the bottom". Big tithers (aging congregation members) will get up and go to the next church if the minister's preaching does not condone their personal ways of sinning. My TX-born neighbors say "getting up and leaving" still goes on. They don't like it, but are raising families, so can't tithe more to compete. Not enough ministers have joined together to forbid it; way too many instead welcome anybody departing from other churches.
JB, Shaggy's mom at Ford board 2014-02-1
Mazda Tribute? That would have been years ago. Maybe the old Mazda-owning management dragged its feet on recalls a long time ago, but the current Mazda-free management drags its feet on nothing The PR says the fine finally happened in August? How many quarters ago?? That fine due to old management is "long gone, done, and paid for".
JB at Ford board
Hmm, real approacher. " arna buyout rumor on stocktwits" at dailymailDOTuk. QUESTIONS:
1) Could ARNA's shorts be starting buyout rumors, wanting an excuse to take ARNA down if the rumors prove false? 2) Could Eisai be pressuring Arena to sell to someone with a direct sales team, so Eisia doesn't have to bear ALL the costs of sales expansion for Belviq? Glaxo SmithKline has sales accounts managers in the UK. So does Roche. 3) Are they going to try to get Belviq approved in the UK only, thus avoiding the EU approval apparatus?
Wating for hubby for our Valentine's datee. Have a good evening, all
JB, Shaggy's mom 2014/02/14
Excellent post. My strong suspicion is that some big shorts have hired "marketing services" to do this and that they short both VVUS & ARNA, but pose as being long ARNA
**pump-and-dump for both stocks in 2012 over FDA approval
**huge increase in short interest for both stocks late in 2012,
**big options player observed in 2013 trading large pairings of puts and calls for both,
**huge number of calls for both stocks that expired out of the money in the popular month of Jan, which meant many puts were in the money
More awards! Thanks Gruck. 8 longs liked your post. Some really upset short used 16 different passwords and log-ins to furiously give you that many thumbs down. That tells us (a) you are on to something and (b) that the board troll's short client is from Europe or wants more biz in Europe. At another board, i've learned that there are shorts-for-hire who provide "marketing services" which I assume includes board trolling. Example: Andrew Left of Citron Res.advertises such services at his website. He was censured/censored as a younger adult for somebody's involvement in commodities fraud, but now is in the sin biz for himself. Hope you are doing well!
JB, shaggy's mom 2014/02/11
Thanks, Q. Germany more or less leads the market in Europe. If some of the weaker markets (France, etc) can follow, too, the European results by the end of 2014 could be pretty good. Check the Chinese media-- there's a China Association of Automobile Manufacturers; their charts show auto growth vs. motorcycles.
CHINA. China's big long lunar holiday each winter keeps retail sales down in Jan & Feb as people work less. Yet, Jan 2013 showed a big rise over Jan 2012, countrywide. Ford did even better, we know, due to new plants and dealerships. I haven't seen Jan 2014 (growth countrywide?)
An article says China exported less in 2013. "Passenger cars reached 596,300 units, down 9.8% year on year; and commercial vehicles were 381,000 units, down 3.5% from the previous year"
The split is unclear. How much due to clearly higher local demand soaking up more of production (as Chinese move into the lower-middle class or higher, now that much infrastructure-building has finished)? VERSUS due to declining demand in foreign lands? (Article indicated emerging economies, Algeria, Russia, Chile, etc are top markets for export).
The Chinese association worries that foreign markets import too much (do not use enough joint ventures inside China to produce, as Ford does). "America" (US&Canada??) is only third among the top importers (due to doing more partnering with Chinese firms).
It's said elsewhere that wealthy Chinese, growing in number alongside the middle class, prefer imports for their luxury cars. The Chinese company Geeley gave that reason for buying Swedish-produced Volvo from Ford.
Ford does not export Lincolns to China, so would not be as affected if the Chinese decide to crack down on luxury imports (though Ford produces other models and engines, sold in China, made in India and Thailand.)
It would be nice if short interest were down by a couple million shares. Big clusters of calls did not roll forward by Jan 21, after expiring wothless. Nor did new ones replace them by Jan 31. So, millions in shares used to cover calls seem no longer needed.
How much short interest can disappear? It could depend on how deeply the IFs below are true. So:
IF the covering shares had been borrowed, and
IF their big borrower returned most of them to the big lender, and
IF their lender found no one else to borrow them (no call resurgence seen by Jan 31).
THEN the lender's temptation would be to sell the part that was hedged, maybe sell more.
IMPORTANT: Other scenarios might explain the huge unwind of options between Jan 17 and Jan 21, so could explain the many millions disappearing in BOTH calls and puts. However, I don't see anyone describing them for us.
JB, Shaggy's mom 2014/02/