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Biotech / Medical : Noven Pharmaceuticals (NOVN)
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To: zizzerzazzer who wrote (52)10/5/1999 3:34:00 PM
From: zizzerzazzer  Read Replies (1) of 66
 
Did anyone else listen to the conference call regarding the Novartis/RPR transaction. Sounded pretty upbeat to me.

Bob Strauss made three main investment points:

1. The $2.7 Million to be received by NOVN is a small fraction of the total amount paid by Novartis to RPR. This indicates that Novartis is serious about marketing Estalis (Combipatch) and Menorest (Vivelle).

2. Novartis will provide a real and growing international presence, especially in Europe where the market is at least as large as the U.S. market. Novartis has a 40% market share in the European transdermal market. However, Norvartis current offerings are the older reservoir tech vs NOVN's newer and leading edge matrix tech. To date, despite being approved in 13 EU countries Estalis (Combipatch) has only been marketed by RPR in Sweden. A series of stocking orders is expected to commence in Q4. Royalties will be the same as the current agreement with RPR.

3. NOVN still owns all of the non-U.S. marketing rights for Vivelle.dot as it has not yet been licensed abroad. The Novartis/RPR deal indicates a significant commercial value can be attributed to the Vivelle.dot marketing rights. When Vivelle.dot is licensed the full amount of the licensing payment (not a small fraction) will go to NOVN. No indication was given when this might occur.

Also, Bob Strauss mentioned that in the Q2 conference call he stated that the 2nd half of 99 should be at least as good as the first half performance of $0.08/share. However, that did not include the $2.7 million dollar payment ($0.12/share) to be received from Novartis. Presumably, Novartis ramp up for European sales will also result in faster growth of Combipatch sales. Bob stated that the $2.7 million fractional share of the Norvartis licensing purchase will be on top of "a truly banner second half".

Finally, I noted that an analyst from ABN Amro participated in the conference call. Perhaps, we will get them on board with a buy recommendation.

Sorry for the lengthy post. Thoughts anyone?
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