I have just read "many" post during the decline...turns out the 60 minute deal was nothing...this is a post from a very aware person that sums the whole thig up. This was posted June 30th 98 on Yahoo
A critical facet of AKRN's strategy has been to develop into a proprietary pharmaceutical company. Some of Sifter's comments make sense, but he doesn't get the whole picture. I have presumed that most of us who have a cost basis under $4, including institutions, have nailed down some profits. I think most of this has been well absorbed and is nearing completion as evidenced by the sharply lower trading volume. As far as inside selling, Doyle Gaw was an original investor (with a much bigger position at a neglible cost + 30,000 options at 2+). He's been a steady seller over the years but is paled by Kapoor's buying and investment (whose sight is set at $20).
It is true that a pure generic company is a crap shoot on its ability to get in first with an ANDA on an off-patent drug (a "score", in that industry parlance). As soon as 2 or 3 more companies get in, margins collapse to toothpaste profits. An example is Zenitth Labs, which skyrocketed, then collapsed into and out of bankruptcy, merged into IVAX, which in turn collapsed when no new "hot" ANDA's were secured.
AKRN has recognized this and has rapidly developed, internally and through product acquisition, niche proprietary, higher margined products. Further, they are working on full blown NDA's, particularly peroxicam, which I hope they get approval in 1999. These are tantamount to delivering monopoly profits. with its good pipeline, AKRN obviously has begun to be recognized as a proprietary pharmaceutical company with a visible growth rate equal to or exceeding most of the majors' which has attracted the institutions. With proprietary products, AKRN can sell a full line of its products more easily. What Sifter doesn't realize, is that virtually all of big drug companies' UNIT volume comes from their own products which have gone off-patent, but most of their profit comes from a few patented, NDA products.
Additionally, with the Taylor plant operating at 50%+/- capacity, AKRN has great operating leverage. Any increased volume over variable expenses drops quickly to the bottom line (plant absorption).
Sorry to go into such detail, but would feel bad if you get shook out of AKRN because of a superficial, negative posting.
I would look for 2nd qtr. EPS one cent over estimate and then resumption of its uptrend, perhaps to 10-12. A 1.5-2 million equity financing would be constructive (and bring in further institutions. Good luck.
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