Knight Therapeutics Inc T.GUD

Q2/24 Comments

[gudisgood]

I liked the report and the earnings call:

+ Meaningful increase of guidance -> good progress with sales.
+ Speeding up the pipeline.
+ Relationship with the Brazilian government (nice to hear!).
+ Continued buybacks (although the volume is low right now).

GUD is gearing up for an impressive number of launches next year. And, as always, the potential for further product acquisitions / M&A is always there, and will eventually happen. The discipline they have for these deals is a big reason for why I like the management.

What did you think about the report?

[curiousj]

I'm assuming Fx/pricing helped due to GM hitting 48% vs 47%, do you have a view on pricing and GM% potential for new launches?  

[longrun86]

I think that product pricing is a big driver but the other drivers are certainly Fx as well as manufacturing & logistics costs. I think there is another few % that could be extracted by increasing the manufacturing volume. I hope that Argentina will prove to be the turnaround story of the decade under Milei as Knight (and the world) will be winners. On a side note, I hate it when companies

[gudisgood]

Argentina: It would certainly be a welcome change. There are promising signals but I'd say there's a lot to be done. Hopefully it works out well! EBITDA: Agreed. I doubt that GUD, specifically, is trying to deceive us. But it would be silly to look at this number alone. Growth: A big question is will the MOH contracts continue? Outside of that, there's a lot of potential for growth

[gudisgood]

Not really. And regarding the overall GM-% in the future, well, for instance, it's really difficult to say how big of a share of the sales the BGx are going to have and whether we get further MOH contracts. The GM-% is not the most important detail (although obviously, everything else being equal, we'd rather have a higher GM-% than a lower one). But obviously we'd prefer to have more