OTCPK:ARLZQ - Post by User
Comment by
mjh9413on Oct 06, 2016 9:27pm
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Post# 25320528
RE:RE:RE:RE:RE:Seeking alpha
RE:RE:RE:RE:RE:Seeking alphaOne clear problem with ARZ is the cost of that sales force ($27MM last qtr) so they need more products to sell if they are going to make this cost effective, and having all heart-related products makes so much sense. Their gross margin on last qtrs product sales was about 50% but I still don;t get the metrics and other details of this latest AZ deal and, of course, have no idea what their net revs on Yosprala might be. in the face of increasing sales force expense.
On the AZ deal they say AZ will continue lmarketing for up to 9 mos but surely, if the expected date of finalising deal is final qtr, why won't ARZ (espec. with their increasing sales force) not be able to take it up almost immediately? Next, they had about $20MM net cash last qtr (cash less conv deb) but are now taking on $175MM new debt for a $7MM/month prospective gross rev from AZ drug (plus another $25MM to offset what they paid for Zontivity.) Is that too large? On top of this I really do not understand this part of the AZ deal given that AZ is being paid 2 x annual sales upfront: namely, "The transaction with AstraZeneca also includes mid-teen percentage royalties and up to $48 million of potential contingent milestone payments." I take this to mean additional payments TO Astra Zeneca. Help anyone?