Wedbush 10/31 report: 2016 5M Euros of US royalties, net of COGS & other costs, about $0.25 ps out of $5.49 ps
Very little eps depends on US approval.
My guess is Blackrock will not exit. But for all we know they could have exited during the rise from 27-49.
Consolidating is fine with me.
I agree with most of that. However:
- rev multiples will not be a problem IF growth as projected by Wedbush proves out (my guess is they will prove low);
- EU marketing costs will not be high, df will largely sell itself, co does not plan significant marketing costs;
- single drug but may be other indications, GvHD and other chemo likely;
- TA is not useful (my bias);
- I am glad Blackrock now has a more reasonable position at nearly 10% of os;
- Blackrock sales were nearly all absorbed by institutions by 9/30;
- On 9/30 the stock was 27 - so it is up 20 points since then;
- Using Wedbush eps (which will prove low) for next 4 years gives a CAGR of 91%.
It is pretty easy to sit with a stock that will grow earnings 91% compounded over the next 4 years.
Every sale will be a mistake (even if you pick a high point to sell) after a few months. The trend is up and the future earnings compelling.
IBD rates GENT 98 Composite, 99 RS, A+ Accumulation, 78 Earnings rank. This last factor is the only one keeping GENT out of some of the IBD screens. Once that crosses 80, and it will after the next earnings report, there will be new buyers. Buyers competing to own some of the few shares OS - only 15M.
I do think it would be reasonable, even healthy for the stock to consolidate in the 30's and 40's before heading higher. But there is no assurance it will do that. In the last two weeks we have had two "V-class" dips, a huge one (10pts) followed by a more modest one (4pts). They cleared out a lot of stops.
IF you are not in and want to own this, is buy the dips. Anyone with all the shares they want to own, should forget this stock and check back in a year or two.
I am long.
Brean also did a DCF at 10% and came up with a NPV of $950M or over $60 ps, thus the PT of $60. Brean says their assumptions are "conservative" (low).
Since I posted last, Wedbush raised their EPS estimates which I roughly convert (Euro- $) as $0.60, $1.80 and $4.00 for 2013-2015. PT 35 (which they will have to raise - probably sooner than later).
Read the news defibrotide gets another Orphan drug status in the EU for GvHD.
Graft versus Host Disease (GvHD) is one of the most important and potentially fatal complication of hematopoietic stem cell transplantation (HCT). GvHD is seen most often in cases where the blood marrow donor is unrelated to the patient or when the donor is related to the patient but not a perfect match. It can occur in 30-50% of patients transplanted with either an HLA-matched sibling donor or matched unrelated donor.
If Wedbush is right, GENT will be higher in two years. We can all make our own judgments how much higher.
A forward PE of 35 seems high. But given the GR, arguably feasible.
Wedbush has earnings as $0.49, $1.04 and $2.62 for 2013-2015. EPS GR of 112% then 151%. So what price should an investor pay today for a stock growing like that which will earn $2.62 in 2015? Assume Wedbush is right (they could be high or low), what will the stock be worth in 2015?
They plan to refile in the US by EOY.
EU is sufficient to make GENT a good stock to own. The US would be icing on the cake. I like my cake iced.
Zugz is partly right, but there are more important differences in AGNC and PSEC. Spread and leverage. PSEC has a much larger spread than AGNC and uses very low leverage relative to AGNC.
That is all pro-PSEC. But there is always two sides of a coin. The con for PSEC is that they lend to high risk borrowers that are non-bankable with little or insufficient collateral. Done well mez finance is a great business. One that we can participate in directly as stockholders.
PSEC does it well - perhaps too well. At some point loans will go on non-accrual.
Long and willing to buy the dips.
Getting df approved has been challenging. The problem is that given that the drug is available and treats a life threatening condition, VOD, you cannot ethically run controlled clinical trials. And practically speaking, who would join a trial to get the CHANCE of getting a they could already get.
So in order to convince CHMP/FDA they have had to offer data on patients treated with df compared to selected historical samples. That type of comparison is subject to easy criticism. And that is what has happened several times.
The treating physicians believe in df, it is in the EU and British treatment guidelines.
EU should approve df in early October. That will start the 10 year Orphan drug time clock running.
But in the US there is no NDA pending - thus no PDUFA date. It may get filed late this year. Approval in EU may give the FDA some incentive to approve it here. If approved in the US they will have 7 year Orphan drug exclusivity.
Dx of VOD is difficult to do in a timely way without risking the life of the patient. The tx guidelines recognize this and codify the necessity of using df prophylactically. Df will be used prophylactically everywhere it is approved and available. Not in every case, but it will be widely used in high risk cases.