giofranchi

Cheers, Gio

Is Axovant's Alzheimer's Drug The Real Deal, Or A Phantasm? http://www.forbes.com/sites/matthewherper/2015/09/09/is-axovants-alzheimers-drug-the-real-deal-or-a-phantasm/ Cheers, Gio

Of course it is easy to dismiss him as just another hedge fund wonder-kid who is riding the biotech bubble and is destined to fail miserably as soon as that bubble bursts… And that seems exactly what everyone has done! But I like the strategy: there might actually be drugs which are resting on the shelves for reasons that have nothing to do with their intrinsic worth. If you can find and buy some of them, it could become a very lucrative business. Moreover, lots of R&D has usually already been done on those compounds, therefore, even if some more R&D investment might be needed, the risk to sink too much money in any project remains low. Do you know many other entrepreneurs so young, who have already articulated such a clear strategy, and who have already such a good track record? I don’t. Therefore, I don’t think I am dismissing him as easily as most of you are doing… Instead, I’ll keep watching him closely! ;) Cheers, Gio

My pleasure! :) Cheers, Gio

http://www.forbes.com/sites/nathanvardi/2015/09/09/the-30-year-old-ceo-conjuring-drug-companies-from-thin-air/ Cheers, Gio

Herbalife activist investor Bill Ackman's unprecedented catalytic crusade http://fortune.com/2015/09/09/herbalife-bill-ackman/ Gio

Herbalife Launches Second Attack on Bill Ackman http://www.foxbusiness.com/markets/2015/09/09/herbalife-launches-second-attack-on-bill-ackman/?intcmp=perspectives-horizontal Gio

http://www.valuewalk.com/2015/09/bill-ackman-china/99999/ Gio

Back To School Grades For 24 Pharma And Biotech Giants http://www.forbes.com/sites/matthewherper/2015/09/08/back-to-school-grades-for-24-pharma-giants/ Gio

Valeant And Progenics Announce FDA Acceptance Of NDA Submission For Oral RELISTOR http://ir.valeant.com/investor-relations/news-releases/news-release-details/2015/Valeant-And-Progenics-Announce-FDA-Acceptance-Of-NDA-Submission-For-Oral-RELISTOR/default.aspx Gio

As far as amortization of intangibles is concerned, I think I have answered you. You might not agree with my answer, but don't say longs don't think about it: we do, and amortization has already been discussed a lot during the Allergan saga. Cheers, Gio

Well… I was teasing you… Because I already knew OM shares my idea about VRX… While I didn’t know yours! What was the point in teasing him? ;) Cheers, Gio

Ah! Come on… That was just me teasing you a little bit, because you were arguing with OM about who among you had achieved the most prestigious university degrees! Nothing more… Anyway, again free to think whatever you’d like! ;) Cheers, Gio

Thank you very much! That was an excellent answer! :) Cheers, Gio

Well, of course you can think whatever you’d like… But, at least as far as I am concerned, you are totaly wrong: I have often expressed the thought that not only I find useful to put my reasonings about investments on paper, but I also like to post them on a board like this one… exactly because I want to hear dissenting views! I have said this many many times before! Gio

As there is freedom of speech, I am also free to ask, right? I find it strange, therefore I ask… If rpadebet doesn’t want to answer, no problem! What bothers you so much? Cheers, Gio

Ahah!!... He said VRX was his largest holding until a few weeks ago… I guess you think it is reasonable to go from the largest long position to a short position in a matter of weeks… At last someone with the conviction to act on his ideas! Cheers, Gio

The fact I find very useful to write about the companies I own is so much baffling to you? I think it is very helpful to put my thoughts on paper, when I have real money invested in a company. What’s so strange about it? Though I would agree with you that probably I am spending too much time thinking about my investments, and too little managing the businesses I own… But how much have I written about Lancashire, or Altius, or Oaktree, or Biglari Holdings, or even Fairfax, since I have sold them? Because that is what I have asked rpadebet… Not how much time he devotes to thinking about his actual investments! Therefore, I don't get the comparison... Cheers, Gio

Yes! When I read that, it sort of reminded me of the Maxim purchase by Biglari… Except that I like software much better! ;) Cheers, Gio

rpadebet, I am just curious: It is simply amazing the amount of time you are devoting to a company you clearly have no longer an investment in… For instance, since I have sold my investment in BH, I think I have written no post on its thread… You instead seem to be “on a mission” with VRX! I sincerely hope you devote at least as much time to the companies you are actually investing in right now! Though I would be hard pressed to understand how… given the fact yesterday you have spent practically the whole afternoon posting about VRX… Really baffling! Cheers, Gio

To compare the odds of a turnaround like JCP with the odds of an investment in a high-quality, high-growth company like VRX yields no useful information imo. If that is the idea you have formed about VRX, I guess our views are simply too far apart. Cheers, Gio

I am not sure I am following… It comes from capital they have previously deployed?... If you don’t take that sale into consideration, you should also correspondently decrease the amount of capital deployed. Am I right? Anyway, would you be so kind as to change your spreadsheet, adding in the proceeds from the sale of the aesthetic portfolio in 2014? Just to see how it would look like? Clearly that’s what VRX is doing tracking cash payback periods on their largest deals (and therefore also IRR). Thank you, Gio

As long as there is organic growth, the businesses acquired by VRX are worth more than at the time they were purchased, not less. If you see organic growth, it means that, even if a product is gradually losing market share, other products are being successfully commercialized and are taking its place. During the Allergan saga VRX was accused of not being able to grow organically, because of the lack of R&D… Imo they have proven those accusations utterly wrong and unfounded! Now, furthermore, you are saying internal R&D investments might increase meaningfully in the near future: any pharma company adjusts its earnings the way VRX does, if VRX’s internal R&D is really getting closer to the amount spent by other pharma companies, why should VRX adjust its earnings differently? I think it should be clear by now that the $11.4 billion in cash VRX claims to have generated since 2008, before interest payments, are perfectly legitimate. Cheers, Gio But don’t take my word for it. Listen instead to what Mark Leonard of CSU (another large investment of mine) has to say about this topic: --2014 CSU AL Cheers, Gio

As long as there is organic growth, the businesses acquired by VRX are worth more than at the time they were purchased, not less. If you see organic growth, it means that, even if a product is gradually losing market share, other products are being successfully commercialized and are taking its place. During the Allergan saga VRX was accused of not being able to grow organically, because of the lack of R&D… Imo they have proven those accusations utterly wrong and unfounded! Now, furthermore, you are saying internal R&D investments might increase meaningfully in the near future: any pharma company adjusts its earnings the way VRX does, if VRX’s internal R&D is really getting closer to the amount spent by other pharma companies, why should VRX adjust its earnings differently? I think it should be clear by now that the $11.4 billion in cash VRX claims to have generated since 2008, before interest payments, are perfectly legitimate. Cheers, Gio

Well, I simply think that, if for the next 5 years they keep growing Cash EPS at the same rate they have grown them in the past, it is quite unlikely the market will reduce their multiple meaningfully. ;) Anyway, your 3x claim imo is misleading: it is not as if those businesses are worth 3x all of a sudden… A NPV is the discount to the present of business results far into the future… Let’s see what’s really behind that 3x: as I have already said, 2 things: 1) Much fat to cut in the first place (most of all unproductive R&D) + synergies + a much better sales force + a lighter fiscal burden. 2) To make grow a business that until VRX’s purchase wasn’t growing. That’s all I think it takes to justify VRX’s price today. Add the value of future deals, and VRX might be undervalued today. I am not saying, of course, that 1) + 2) are easy to achieve… Far from me! But understand that they are definitely joint at the hip: the same bureaucratic management who allows a bloated cost structure to persist is also the one who doesn’t enable a business in a growing industry and with lots of tailwinds to grow. Remove that mediocre management, put in place a great capital allocator, and lots could be achieved! Cheers, Gio