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Biotech / Medical : Duramed (DRMD) Synthetic Estrogen Product -- Ignore unavailable to you. Want to Upgrade?

To: Thure Meyer who wrote (1695)	8/24/2000 8:26:00 AM
From: vestor	Read Replies (1) \| Respond to of 1837

Thure, DRMD has instituted steps that did and should continue to bear fruit from here on. They are thus now profitable and I feel they will now continue to be so. The company has 3 ANDA's on file and expects to file for 2 more this year. A disappointment is that the Tamoxifen project has been suspended due to costs. perhaps they may sell what they have title to to recover costs. APRI continues to grab market share at a pace that surprises me. Cenestin, although gaining market penetration, is at a slower pace than I had hoped for. However the script rate of increase is promising. Apparently the efforts of Cardinal, Solvay and the impact of being on some large formularies is accounts for this. The Progesterin/Estrogen compound is still a distance away from approval. However it is an important one for it gives DRMD a better menu selection and thus making it more likely to be a one stop shopping center for these type products. Pressure should be mounting from Solvay's direction since they are in at $9. share and have a significant investment. I am a little disappointed in that it seems like DRMD is not making use of Solvays European channels of distribution. However that may be due to higher priorities and the perception of marginal profit margins. DRMD says that are continually seeking alliances with other companies however they are tight lipped as to details and its hard to tell what the impact will be should they form partnerships. Now that DRMD is profitable they may pay down their debt and/or begin to take advantage of the huge amount of patent expirations taking place as I write. Bankruptcy concerns have been greatly diminished and generics as a group should do well going forward. That baby boom bubble has reached a stage where it is having an impact on drug companies and that should continue for at least the next 20 years. I think we will continue to grab market share in the Estrogen and birth control product market. It seems though, based on the last know rate of market penetration data, that DRMD wil be at the 80% Solvay 20% DRMD formula for at least the next 2 years. However the 20% is pure profit going straight to the bottom line and when that formula reverses the earnings picture will dramatically improve over night. I think the downside risk is quite minimal, about $5. and the upside potential great. The first significant wall was at 6 and we have boken that barrier on a sustained basis. The $7. mark may be tougher due to options accorded to the CEO exercisable at $7. and close followers of DRMD know that the CEO has been recently only a seller of his companies stock. When we break $7. on a sustained basis then $12. is the next target. DRMD has a lot going for it and thus investing at current levels is reasonable. Many of the cost reductions and effects of the inclusions to recently announced formularies should be seen in the current qtrs. numbers. The programs in place at Solvay and Cardinal should be gaining speed. At this time I expect the qtr. to yield about .05 a share, a nice improvement.