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Strategies & Market Trends : Value Investing
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To: Terrapin who wrote (6139)2/28/1999 7:02:00 PM
From: Michael Burry  Read Replies (1) of 78473
 
they appear to be an out-sourced marketing and distribution channel for the large pharmaceutical companies

No. They are expert marketers and evaluators who identify then
acquire underpromoted (because of the small market) but FDA-approved
drugs from big pharma. JMED is its own company, and they do
very well because they increase the market share of the drugs
they acquire.

how long can Big Pharma ignore this slice of the pie?
Forever. Big pharma, by definition, gets bigger bang for its
buck promoting drugs for the several-hundred-million dollar
markets. JMED's total revenues now are just over $120 million.
Big Pharma will never want to sell drugs to tiny markets.

Its niche is in its expertise in marketing drugs, and in
penetrating certain small markets, such as endocrine. That
niche can be exploited much much more before big pharma
even starts to care.

I like that JMED picks markets where there is no reason
for dominance. Levoxyl should not be second banana to Synthroid.
No reason. Yet Synthroid wins 70+% to 24%. So Jones gets
Levoxyl and can continue expanding its market, eating into synthroid.
Jones has grown Levoxyl's share from 15 to 24% since acquisition,
at Synthroid's expense, giving Jones strong cash flows.

Mike
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