Great CC, should send the shorts scrambling Great update by CXR's team. After hearing their CC, it is becoming apparent that few quarters from now we will all be saying.."why didn't I buy more when it was in the $35-$40 range". The 4X multiple is undeserved and not in line with its peers. CXR will continue to focus on their business and expectations are that a multiple of 10 will soon be realized.
I can't think of anything negative or of concern in that CC. From what I could gather, it looks like a classic.....under promise, over deliver. An example of that was the surprise in the RBC's analysts voice when he was told that Donnatal's estimated growth to 125M-150M was conservative. That means there is more than a 50% organic growth in Donnatal. This was all due to FDA's reclassification of the drug, allowing health plans to cover the cost. With this positive development and no generic competition, CXR increased their sales team by 100 to capitalize on this opportunity. This is contrary to what the naysayers have been spreading on SH, that the sales team increase was to combat falling Donnatal revenues. Similar positive expectations were discussed with their prostate drug.
In addition the pipeline of rollout drugs is huge. Pricing is a non issue, and therefore Hillary's tweet does not concern CXR.
There will be some pay down of debt in 2016 but 144M £ or over 125M USD will be paid to Cinven as a performance bonus.
The remainder of the free cash flow will probably be used for a tuck-in acquisition. Serious debt repayment to 4.5 level will take place in 2017.
It was reiterated that integration is also a non issue as AMCo is already a functioning entity performing as expected.
All looks good.
What's not to like here?