John Leonard, CFA
Special situations, micro-cap, contrarian, CFA

Columbia Laboratories Needs A Carl Icahn

Investment thesis

  • Columbia Laboratories (CBRX) trades at an attractive valuation due to an expected temporary drop in sales of its key product as well as fears of another expensive acquisition.
  • However this is more than reflected in the recent price decline and ignores the growing free cash flow, significant tax assets and attractive product development model.
  • Moreover, recent involvement by Carl Icahn in a larger women's healthcare company highlights the potential for another activist investor to maximize shareholder value.

Company overview

CBRX focuses on the reproductive healthcare market and recently entered the pharmaceutical development and analytical services market with the acquisition of Molecular Profiles.

The primary product is CRINONE, a sustained-release bioadhesive progesterone gel used to treat infertility and secondary...

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