Old API Wind-down Ltd - Ordinary Shares ARLZQ

Seeking alpha

[2quick154]

We are being called the mini-Valeant on seeking alpha article stating we are on a debt binge lol...

[Floridas2000]

That's ridiculous.  We purchased two drugs - not two companies - with our credit facility.  Also our major advancement is Yosprala which is completely organic. Fighting ignorance is going to be a challenge.  It's a damn if you do and damn if you don't thing.

[kuatolives]

Will likely have to wait for Q4 results (or Q4 guidance press conference sometime in November as hinted in the CC) to see some real green. The market isn't giving up much. If you have some powder, might be a good timei to accumulate some more. I have no problems making share purchases at these levels given what has transpired in business development and the lacklustre market response. I'd

[Bigboyone]

Kuato,Good observation, you are usually dead on.. and its hard to fathom we are worth half of what we where worth last year as,(Pozn) and all the possitives we have now had in a row,(Yosprala, New $, new drug portfolio,etc, etc..)sort of makes you think. Imagine if we had any bad news? I know Adams is a great tactician, and the last drug purchase was a "gimme" and fantastic pickup. With

[goldbug83]

I think there's a lot of money on the sidelines waiting for a market correction to happen. Whether it happens in the next month with the election cycle or leading up to December's fed rate hike. That's why we haven't seen money flood into ARLZ. Either way 2017 should be a good year for us as long as strong sales growth occurs each quarter. How we wait for the numbers.

[mjh9413]

One 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

[kuatolives]

-Whether or not they need more products to sell to justify the cost of the sales force depends on the uptake of Yosprala. We'll know when Q4 guidance is released. -It's odd you'd question their debt load used to purchase new drugs when in your first statement you seem to claim they need more drugs to justify the sales force. You don't find drugs to sell in the cushions of your

[mjh9413]

If long in ARZ that is a pretty cavalier attitude to the new drug purchase metrics, with a call to rely on Yosprala and think the buyer is smart enough. If one just takes the upfront purchse price and then takes gross to net margin 50% that is still a payback on net sales alone of at least 4 years out of the nine being mentioned. And you'll realise that is net margin, with lots of underlying

[Floridas2000]

Let me ask you a question - how do Pharma companies usually work?  Don't the major pharma companies build in the exact same way?  How else do you get bigger if you're not a research company developing your own drugs? Now lets get a few things clear: 1 - they're being very conservative in their numbers since Adams is a veteran of the business and knows things can go wrong. &

[mjh9413]

Sorry you don't get my main point which is clearly, are they overpaying for latest AZ drug. If the idea is that they should rely on Yosprala cash generation to ensure they can cover P&I costs then you are confirming they most probably are overpaying. You want them to deal with new purchases on the basis that each one is profitable on its own. That is rhetorical. I don't need an answer.

[kuatolives]

You'd have to provide some concrete numbers on what you think are acceptable terms for the Toprol-XL deal, if these are not.  2x revenue for a drug that fits into their small portfolio sounds pretty good to me - and they nabbed the generic - and its unlikely any other generic will hit the market before the deal has well paid for itself due to the complexity of it. They could crack 150M in

[GoldenDilemma]

From a SA commentor: "On the surface, a lot of people have surmised that part of the expected accretion of Toprol is piggybacking on the newly established, experienced 110 sales reps in the cardio field. Yet, Aralez has stated that they won't be utilizing their new reps to promote/sell Toprol, but will keep them exclusively focused on Yosprala, Zontivity etal. Thus Aralez has muted what

[kuatolives]

One of the reasons AZ probably got it off the books was that maximum penetration had likely been achieved, so there was little point spending millions flying reps around the country promoting something that was already selling about as much as it was ever going to sell. Would be like trying to sell Coke at McDonalds, and this is the lifecycle of the drug business. ARLZ will ride the revenue stream

[Floridas2000]

This is Zack's quote "Management has indicated that the current credit facilities are a bridge to a more permanent financing situation at some point in the future when the company has significant EBITDA and a leverage ratio that will allow them to receive more favorable financing conditions. " It appears management does have a plan and are looking to execute it.  12.5% is a

[kuatolives]

Their revenue projections seem off. 50M for Q4 and then 150M for all of 2017? There seasonsal adustments here I'm not aware of?

[goldbug83]

Here's an exerpt from 5i Research: Aralez is adding Toprol and its authorized generic. Toprol is a cardioselective beta blocker used in the treatment of hypertension (in combination with other drugs). The payment is quite large, at $175 million upfront, but ARZ indicates it will improve profitability in 2017 and is immediately EBITDA accretive. Revenue was $89 million last year and $53

[Floridas2000]

In an ideal perfect world that you learn in school then yes every purchase should fund themselves and be profitable on it's own ignoring any potential synergies and corporate insight.  That is rhetorical.  I don't need an answer.

[kuatolives]

And drug reps only get a minute or two with medical professionals. I'm not a rep, but I'm pretty sure they don't go into a meeting with a trenchcoat full of drugs half opened and ask the guy what he's looking for.  If you have 2 minutes to make your pitch, do you want to spend it going on about a drug that already has near maximum penetration, or your fancy new drug that the

[mjh9413]

Great to see differing opinions here and guess we'll just have to wait-see. One poster sees ARZ riding sales down to $50MM over the years while another sees them somehow going from 80's to 150. Another is equally surprised that own Reps do not carry promotion for this drug around with them as well as the other ARZ products, while another says keeping it with AZ Reps is best...AZ are not

[kuatolives]

Zacks updated to $11 target. Not sure what it was before.

[Floridas2000]

Is that US or CDN?

[snootchybootchy]

kuatolives wrote: Zacks updated to $11 target. Not sure what it was before. It was $10.50 before. In USD. Here is the link.

[snootchybootchy]

And here is the latest Zack's report on Aralez.