snowball82 Posted April 10, 2015 Share Posted April 10, 2015 Gio, Very good idea to take your time and follow the company to see if you should buy or not based on your criterias. So to be a $ 1 B company 5 years from now is very optimistic (10 baggers vs today !).So I think it's better to have lower expectation. $ 200 M market cap could be ok for me at this stage there :) Just my opinion. The company will report May 13. http://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aRX-2266924&symbol=RX®ion=C Link to comment Share on other sites More sharing options...
KCLarkin Posted April 10, 2015 Share Posted April 10, 2015 Looks like recent drop is related to a new generic version of FeraMAX: http://www.odanlab.com/EN/News_Releases.asp?id=298 http://www.cantechletter.com/2015/04/buy-biosyent-on-weakness-says-cantor-fitzgerald-canada/ What's your take on this news? This stock is currently richly priced for perfection, so negative developments like this definitely would drag down the stock quite a bit. I felt like this stock has been heavily pumped for the past two years, and people easily dismiss all accounting red flags as "It is a small company so things are definitely volatile." That makes me a bit concerned. 35x does not seem richly valued for a company growing sales at 57% per year. As a small company with one hit product, it is very risky and hence volatile. I don't see any obvious red flags in the accounting. The AR is not that large relative to sales, income, or cash. As mentioned by others, AR is lumpy because they had a few large international orders. Inventory is a bit high at the end of Q4 but this could be related to new product launches or international sales. The company is currently highly dependent on FeraMAX sales, so the entrant of a generic competitor is a major concern. Part of my thesis was that their products are niche products too small to attract competitors. At the very least, this will slow the phenomenal growth of FeraMAX. Still, the company has a good pipeline so the growth story is still intact. Time will tell whether any of their new products are as successful as FeraMAX though. Given the risk, I would limit my initial position size to 1% and hope it grows to a material size. I have a 0.2% position currently. Link to comment Share on other sites More sharing options...
Liberty Posted April 10, 2015 Share Posted April 10, 2015 I have a 0.2% position currently. How many positions do you usually have? Just curious, because a .2% position means that even a 10-bagger would only move your portfolio by less than 2%. Link to comment Share on other sites More sharing options...
KCLarkin Posted April 10, 2015 Share Posted April 10, 2015 I have a 0.2% position currently. How many positions do you usually have? Just curious, because a .2% position means that even a 10-bagger would only move your portfolio by less than 2%. The plan would be to build a bigger position if: - valuation becomes more compelling - risk is reduced (e.g. Cathejell is a hit) This is a small position that I use to scratch my speculative urges while I wait for my 1 or 2 high conviction ideas per year (AKA play money). My goal is a 10/10 portfolio. Link to comment Share on other sites More sharing options...
Liberty Posted April 10, 2015 Share Posted April 10, 2015 The plan would be to build a bigger position if: - valuation becomes more compelling - risk is reduced (e.g. Cathejell is a hit) This is a small position that I use to scratch my speculative urges while I wait for my 1 or 2 high conviction ideas per year (AKA play money). My goal is a 10/10 portfolio. Ok, more like a Tom Gayner tracking position then? That makes sense. Link to comment Share on other sites More sharing options...
snowball82 Posted April 11, 2015 Share Posted April 11, 2015 ...The company is currently highly dependent on FeraMAX sales, so the entrant of a generic competitor is a major concern. Part of my thesis was that their products are niche products too small to attract competitors. At the very least, this will slow the phenomenal growth of FeraMAX. Still, the company has a good pipeline so the growth story is still intact. Time will tell whether any of their new products are as successful as FeraMAX though. ... KCLarkin, I have the same concern, so maybe Proktis-M, Cathegel Jelly 2 % and RepaGyn could help over next quarters. Based again on Cantor research, first year potential for RepaGyn alone is similar to FeraMAX® launch and the market for vaginal dryness in Canada is $62 million. I have no idea what could be futurs sales for all those products but hoppefully we should see a better diversification, lower risk. Link to comment Share on other sites More sharing options...
Drokos Posted April 16, 2015 Share Posted April 16, 2015 I don't have much if any of a right to complain given my return in this stock over the last 2 years, but I do wish Rene was moving a little quicker and didnt operate with such an extremely conservative balance sheet. I wont try to convince him to take on debt, but I think he should be able to at least put the cash to work. Should be able to either do a little larger deals or pursue deals that are already on/closer to the market and more quickly accretive. I'd still pursue his traditional in-licensing/development deals that come with insanely high ROIs (because essentially no capital is invested), but deals like that alone will never burn through the cash pile + new incoming cash flow. Link to comment Share on other sites More sharing options...
snowball82 Posted April 17, 2015 Share Posted April 17, 2015 I don't have much if any of a right to complain given my return in this stock over the last 2 years, but I do wish Rene was moving a little quicker and didnt operate with such an extremely conservative balance sheet. I wont try to convince him to take on debt, but I think he should be able to at least put the cash to work. Should be able to either do a little larger deals or pursue deals that are already on/closer to the market and more quickly accretive. Drokos, Cormark believe than BioSyent "will acquire new products that will contribute about $5 MM in additional EBITDA by yearend 2020. The larger, higher profile products would be a change of gears for BioSyent." What kind of deals do you think could bring highest return on capital invested ? Link to comment Share on other sites More sharing options...
Drokos Posted April 17, 2015 Share Posted April 17, 2015 I think the existing in-licensing deals are definitely the highest return on investment opportunity. Especially some of these situations where they are in-licensing products from foreign firms that are currently being sold in Canada. The foreign firm views the deal as all upside, so even if you give them $50-100k + a 10-20% royalty on sales they are happy. From RX's view, its a $50k investment for something that can throw of $1m a year in a year or two after you file it and get approved. I agree that it is the highest ROI and they should pursue that all day until the opportunities are gone, but they're just never going to be able to put significant amounts of capital to work in that strategy. Compare that to someone like Valeant who is earning lower rates of return but it still able to reinvest more than its entire earnings every year at 20-25% returns. Do you want 100% ROIC on $100k of capital invested annually, or do you want to put $10m to work annually at a 20-25% ROIC? Link to comment Share on other sites More sharing options...
gary17 Posted April 17, 2015 Share Posted April 17, 2015 Nice blog entry about RepaGyn from a few days ago - some positive comments http://backtothebedroom-blog.ca/replens-vs-repagyn-whats-the-difference/ Gary Link to comment Share on other sites More sharing options...
gary17 Posted April 17, 2015 Share Posted April 17, 2015 I wonder if their filing of NI 44-10 is an indication that they are ready to be a bit more aggressive when the right opportunity comes? Link to comment Share on other sites More sharing options...
snowball82 Posted April 19, 2015 Share Posted April 19, 2015 Drokos, Again, if India is one of 6 new internationals markets...return should be so exceptional :) I pray everyday than the management won't follow the crowd crying "put the money at work to generate some lower return over next months"... Based on Biosyent standards a 20-25 % ROIC expectation is too low at this stage :) Having cash is a winning condition with this business model. This demonstrates financial strength to future pharma partners and that cash will be great to invest in futurs opportunities. My 2 cents. Why not expect than ROIC will be excellent for new 6 countries in Middle East and Asia ? Do you have any idea what are those internationals markets ? Nice to see than management has experience in Asia : "Alfred D'Souza has been the Chief Financial Officer and Vice President at BioSyent Inc. since December 13, 2007. Mr. D'Souza joined BioSyent as Controller and Director of Finance in October 2006. He has over 25 years of accounting, finance and operations management experience in international businesses ranging from early stage to rapid growth to mature markets. He enjoyed a 16 year career with progressive management assignments at Colgate-Palmolive Company. He last two positions at Colgate-Palmolive were Head of Finance (Country Controller) at Colgate-Palmolive Vietnam while it grew from sales of less than to USD $2 million to over $25 million, and most recently as Finance Director and Controller of Colgate-Palmolive India a publicly traded (BSE) USD $225 million company with 4,000 employees and 6 manufacturing plants in India. Mr. D'Souza is a Certified Management Accountant and M.B.A. from Wilfrid Laurier University." Link to comment Share on other sites More sharing options...
snowball82 Posted May 19, 2015 Share Posted May 19, 2015 Only + 88 % nets profits for the quarter vs last year Q ! http://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aRX-2277756&symbol=RX®ion=C http://www.biosyent.com/q1-15/#.VVqYzLl_Okp Do you have any expectation for sales in 9 countries (Feramax actively promoted in three international markets, terms sheet in 9) ? Link to comment Share on other sites More sharing options...
jm25 Posted May 22, 2015 Author Share Posted May 22, 2015 I've been adding at these prices - but the stock keeps dropping. Link to comment Share on other sites More sharing options...
gary17 Posted May 22, 2015 Share Posted May 22, 2015 I have been buying as well. I feel like this is the Apple moment in 2013 when the market is not seeing the potential. I like RX's international potential here. I was first introduced to the idea last year when the shares were around the same price but much lower eps then. Interesting how a year later the eps has gone up and things looking better, but the market doesn't like it as much now. . Oh well, So RX and BAC are my two biggest holdings now. ! Link to comment Share on other sites More sharing options...
KCLarkin Posted May 22, 2015 Share Posted May 22, 2015 I've been adding at these prices - but the stock keeps dropping. I am being cautious with the negative momentum. This is still a fairly expensive, illiquid stock. The risk to FeraMax is very real. I am getting interested here but it could drop another 20% before it starts to track fundamentals. Link to comment Share on other sites More sharing options...
walt373 Posted May 27, 2015 Share Posted May 27, 2015 BIOYF trading at 5.88 while RX.V is at 7.27. Are these really the same? 20% discount... Link to comment Share on other sites More sharing options...
Liberty Posted May 27, 2015 Share Posted May 27, 2015 BIOYF trading at 5.88 while RX.V is at 7.27. Are these really the same? 20% discount... USD vs CAD Link to comment Share on other sites More sharing options...
walt373 Posted May 27, 2015 Share Posted May 27, 2015 Ah, that would explain it :D Link to comment Share on other sites More sharing options...
snowball82 Posted May 31, 2015 Share Posted May 31, 2015 My favorite part of Goehrum's annual letter : ...The company now has a commercialization platform in place, supported by a highly experienced team that can take such products from evaluation all the way to successful position in the Canadian market. Coupled with a very active business development pipeline, the company is in great position to further expand our portfolio of products over the coming year. To further strengthen the foundation of our business we have started developing international markets for some of our products through marketing partnerships. Though it contributed a fairly modest $ 0.49 M in 2014 we expect our international pharma business to be a significant contributor going forward..." So I continue to think than I own a unique platform to sell specialty pharma products in Canada and many countries (9). Link to comment Share on other sites More sharing options...
gary17 Posted May 31, 2015 Share Posted May 31, 2015 Interesting note from the annual letter , Snowball :) I think a key point to find out is if RX can maintain or even raise the FeraMAX pricing in the face of competition. If so, then now would be a terrific time to buy some RX for the long term. Gary Link to comment Share on other sites More sharing options...
Liberty Posted May 31, 2015 Share Posted May 31, 2015 Interesting note from the annual letter , Snowball :) I think a key point to find out is if RX can maintain or even raise the FeraMAX pricing in the face of competition. If so, then now would be a terrific time to buy some RX for the long term. Gary I think they recently did a small price increase on it, but that's from memory so I could be wrong. Link to comment Share on other sites More sharing options...
snowball82 Posted June 9, 2015 Share Posted June 9, 2015 Like Paladin Lab before... another Canadian specialty pharma bought and the domicile will be Ireland. Interesting to note than the effective taxe rate was 26 % for last Biosyent's quarter. June 8 (Reuters) - Specialty pharmaceuticals company Pozen Inc said on Monday it would acquire Tribute Pharmaceuticals Canada Inc for about $144 million, in a deal that would shift its domicile to Ireland and cut its tax bill. http://finance.yahoo.com/news/pozen-redomicile-agrees-buy-tribute-145924351.html Link to comment Share on other sites More sharing options...
gary17 Posted June 9, 2015 Share Posted June 9, 2015 I am praying everyday this to be the next CSU: high growth of sales in the pharma industry. And no issuance of new shares and no debt. Hopefully they can now acquire new products from FeraMax cash flow. Repeat 10 times and we can all do well lol It is interesting to note RX is based in Canada and is subject to full Canadian corporate tax rate of about 26% or so. As a comparison Ireland is 12.5%...... http://www.kpmg.com/global/en/services/tax/tax-tools-and-resources/pages/corporate-tax-rates-table.aspx Link to comment Share on other sites More sharing options...
Liberty Posted June 10, 2015 Share Posted June 10, 2015 http://www.cantorcanada.com/pdfFiles/20150609RX.pdf Link to comment Share on other sites More sharing options...
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