AndRx certainly has a very interesting story.
I own Watson at about a $7 basis, I'm just worried about their ST (1-2 yrs) prospects. They earn half their $ on the RPR JV for Dilacor and Somerset Labs Eldepryl. Dilacor and Eldepryl, with generics on the horizon. Somerset has an interesting drug they are working on for Osteoporosis which may be totally overlooked. They licensed it from a Hungarian firm. It is marketed by others in France and Japan with sales of around $100 Mill annually. This could be a real hidden jewel. Its in Phase II trials. Watson has some transdermal stuff. I feel the transdermal hormone market is totally overblown. There are a bunch of firms working in this area: Noven, Cygnus, Alza?, Elan? , Columbia Labs, ETHCY, Theratech.
WATS is a well run firm its just that its stock will probably be under pressure at least through next year. They do have a boatload of cash for a small firm: well over $100 million. Look for them to do something with it next year.
While I like AndRx I am worried about their initial products. They have a couple of ANDA's pending for XR Carafate and Dilacor. I do not think the market potential for these is all that great. I would estimate about $20 Mill in sales each. As I said, I like the fact that SEPR chose them to formulate a XR version. SEPR is a shrewd and very well run co. as far as I can tell. Its a non-generic and should AndRx have some good royalty terms, it would raise my opinion of ADRX substantially. The importance of this deal is that SEPR has a huge pipeline of chiral drugs of existing blockbusters. If they utilize ADRX to formulate XR versions of each, it would be HUGE for ADRX should Sepracor succeed. I own a lot (for me) of SEPR. So hopefully the deal wlll work.
I called ADRX Investor relations today for a packet of info, so I will be able to take a closer look. You may be onto something with it. If you look at Biovail, they have a mkt cap of over $1 billion. They probably do not have a better outlook than AndRx with a $150 million cap. AndRX has ample cash which I like to see in developmental co's and they have a distribution system already in place. Some people think Watson bought Circa just for the AndRx stake. I dont quite believe that but it certainly added to their allure.
I do agree that owning AndRX is a long tem proposition. $70 a share is not that crazy a figure. At $70 it would still have a lower mkt cap than Biovail.
By the way your friend made a disgusting amount a $ on Bolar. Does he run a hedge fund or something? |
