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Spencer Osborne  

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  • Enteromedics - Looking At The Numbers [View article]

    Reverse splits are typically not viewed in a good light. More often than not they are a move of desperation by a company and the issues that brought about the need to have a reverse split are not solved by enacting it.
    In most cases, after a reverse split, the price per share of the equity depreciates again.

    The technology does have some potential value. The problem is that it is in the hands of a team that can not really bring it to reality. Every move that current management makes is borne out of poor leverage. The company has poor leverage because it can not afford to bring the technology to the forefront. Compounding the issue is time working against them. There is now a balloon device on the market and the market continues to move.

    One issue is that investors need to invest in this company in order to invest in the device.

    An opposite example of this would be Corona Beer. It is widely thought of as skunk beer, but it flies off of the shelves because the company behind it is doing the right things.

    I support veterans in many ways because I am a veteran myself.

    My stance on this device has been consistent. It has a niche. The weight loss provided is not vastly superior to pills and very inferior to full gastric surgical procedures.

    AACE guidelines show the treatment path, and while Vbloc is not yet listed in it, we can place it in there with what we know. The system moves along these lines

    Step 1 - Proper diet and exercise
    Step 2 - Stringent lifestyle modification
    Step 3 - Pills or injections (a patient may need to try 5 different meds)
    Step 4 - Device therapy such as vbloc or balloon
    step 5 - surgery

    My issue is that vbloc is in a niche and getting to the point where a doctor will use this option is lengthy. Essentially it is relegated to those that are left after pills do not work.
    Nov 18, 2015. 12:44 PM | Likes Like |Link to Comment
  • Enteromedics - Looking At The Numbers [View article]

    "Because others read these posts. Some of them are shorter term then I."

    So you are saying that you are insinuating that I am engaging in criminal activity (purposefully trying to manipulate an equity) because others read these posts?

    You agreed with my numbers and assumptions yet find the timing of the article a question mark? WOW!
    Nov 18, 2015. 12:25 PM | Likes Like |Link to Comment
  • Enteromedics - Looking At The Numbers [View article]

    I tried very purposefully to be very generous in the assumptions and numbers used. There are efficiencies that happen as volume increases. Assessing some of these numbers with a handfull of installations is a guessing game. It costs more per unit to make a few of an item than it does to make many. I tried to consider such a dynamic.

    Essentially, the discussion is pissing in the wind. Even with me being as generous as possible, the numbers are still not attainable.

    Lets put it this way. The company pace is only 5% of the very generous numbers I provided. Whether it is 100 procedures a month, 150, or 200 matters little when the pace is 3 or 5 or 10.

    Even being very generous, look at the attitude and flack I get from a disillusioned group of people
    Nov 18, 2015. 12:02 PM | Likes Like |Link to Comment
  • Enteromedics - Looking At The Numbers [View article]

    With all due respect.

    I have been following this space for a number of years now. I have become very well versed in the dynamics of weight loss, how it is accomplished, and what to expect.

    Time has a function, but data demonstrates that weight loss plateaus at some stage. It is a biological function. The human body needs a certain amount of fuel to operate.

    The Maestro label indicates that the device begins to plateau at month 8 and in month 12, the patients actually saw weight gain. Additional time does not mean additional weight comes off

    "You answer to my opinion of your timing is insufficient and irrelevant to me. I am a longer term investor who cares little about daily fluctuations in price. I have written a comment on biotechs that clearly states the need for research, conviction, patience, and a strong stomach"

    Then why did you ask the question and bring up the insinuation you did?
    Nov 18, 2015. 11:47 AM | Likes Like |Link to Comment
  • Enteromedics - Looking At The Numbers [View article]

    I am sorry you feel that way. Please refer to my answer to takethebuck.

    Is there something specific in this article or specific in these numbers you disagree with? That can certainly be discussed and probably would be a more valuable discussion for readers
    Nov 18, 2015. 10:53 AM | Likes Like |Link to Comment
  • Enteromedics - Looking At The Numbers [View article]

    Thanks for the comment. I will address things a point at a time so as to offer claity:

    "Your numbers and assumptions are correct."

    Thank you. I try to assess things in a very realistic way

    "Your timing makes me suspect of your motives. Whenever ETRM starts to gain a little traction with rising volume, you write a negative article."

    I cover the space. In my last article, some comments from readers made it very clear that a follow-up that went through the numbers was needed. I wrote it and submitted it. I do not "time" articles to come out when certain events happen. This article was submitted about 40 hours ago.

    "According to Seeking Alpha's numbers, you also make a tidy profit."

    I am not sure what you would consider a tidy profit. What I make from Seeking Alpha is actually very modest, and frankly not worth the time I put into research, writing, editing, etc. I like to write, so I do. An article such as this might garner $40 or so. It does not change my lifestyle in the slightest. I do not write for a living, nor do I even really consider any income from writing to be anything I count on. I do use a very good chunk of the proceeds to support things that are meaningful to me. Wounded warriors, habitat for humanity, and Autism Speaks are some of the more well known things I try to give support to. I also support local causes that assist veterans. The bottom line is that money from writing is very minimal as compared to what I make doing development projects.

    "I also noticed that, at the end of your current negative article you did not note, as you had in previous articles, that you have a small long position in ETRM."

    I played ETRM for FDA approval, which I felt was a certainty. I have discussed that play many times. It was a great call, but I was in the midst of meetings the day it was announced, and frankly, the development deals took an appropriate priority to me over such a small play in ETRM. It was a very small play and I have always stated as much.

    My last article stated, "I sold my position out this morning after assessing the numbers. I had made a modest play in the company anticipating FDA approval with the intent of selling the pop. The pop was so short lived that I missed it. I held until year end to assess whether I wanted to take the loss in 2015 or 2016. The numbers released yesterday accelerated that decision"

    "How small was it?"

    In relation to what? I guess the best answer would be this. Think of an amount of money that you may take to a casino to have a fun night at the tables and not feel depressed if you lost it all. In other words, the fun you had was worth the loss at the tables. That is how small it was.

    "Did you take your losses?"

    I covered that above. Yes, I took my loss this year. There was a point that I may have simply held and let it ride, but this bond deal is so bad that I decided to use the loss this year.

    "Did you, or do you have a greater short position?"

    I have NEVER had a short position in ETRM. If I had I would have had to disclose it. If I am not honest in my disclosures, I run the risk of landing in jail. I have a wife and kids, and frankly, would not like to spend any of my time in an orange jumpsuit making little rocks out of big rocks.

    Hope these answers clear the air for you. In closing, I will go back to the first sentence in your comment - " Your numbers and assumptions are correct." - This article is in "positive" or "negative" per-se. It is an assessment of the data and the numbers.
    Nov 18, 2015. 10:46 AM | Likes Like |Link to Comment
  • How Is Novo Nordisk Performing In The Anti-Obesity Space? [View article]

    The anti-obesity secto is a challenging place. The concept here is that the anti-obesity market is not very compelling and should not be a major reason to invest in the company. That being said, the Novo strategy has advantages over competitors in how it approaches the market and its size.
    Nov 18, 2015. 08:44 AM | 2 Likes Like |Link to Comment
  • Orexigen- Contrave Scripts Lead The Pack But Increasing Market Share Is Critical [View article]

    Saxenda is very new. It is an injection launched mid summer from Novo. It is liraglutude 3mg.

    Xenical is now Alli and is sold over the counter
    Nov 17, 2015. 06:38 PM | 1 Like Like |Link to Comment
  • Orexigen- Contrave Scripts Lead The Pack But Increasing Market Share Is Critical [View article]

    That doctor sentiment is well entrenched. Right or wrong, it exists.
    Nov 17, 2015. 10:02 AM | 1 Like Like |Link to Comment
  • Enteromedics Reports Q3 Loss But Beats Estimates On Cost Cutting [View article]

    Thank You.

    I have found that many retail holders attracted to equities like this tend to want to shove the numbers aside.

    I got attacked when I stated that we would be lucky to see 50 procedures by September as some folks were expecting 50 procedures a month by that time.

    This new-found $25 million puts massive pressure on this company and means that we need to see a 9th inning comeback of a 7 run deficit via a grand slam home run followed by loading the bases again and seeing a second grand slam.
    Nov 16, 2015. 01:41 PM | Likes Like |Link to Comment
  • Arena- Belviq Scripts See Small Rise But Still Lag Sector Where It Counts [View article]

    It is on my radar
    Nov 16, 2015. 10:30 AM | 1 Like Like |Link to Comment
  • Enteromedics Reports Q3 Loss But Beats Estimates On Cost Cutting [View article]

    Sorry last comment used $4 million in operations. That should have been $4 million a quarter and $16 million for the year.

    If we add $1,750,000 debt service to $16 million we get $17,500,000 a year.

    At &12,500 profit per install, it will take 1,400 installs just to operate and pay interest. That is 117 procedures a month.

    Let's put it all together

    $17,500,000 for year 1 + $17,500,000 for year 2 + $25,000,000 to pay debt.

    Costs side over next 24 months is $60,000,000

    That is 4,800 procedures in 24 months to get out of the woods.

    That is a pace of 200 procedures a month.

    The clock is ticking.

    You should also bear in mind that I used a very conservative $4 million. Last quarter operations and research was over $6 million.

    Now, please show your math.
    Nov 15, 2015. 09:02 PM | Likes Like |Link to Comment
  • Enteromedics Reports Q3 Loss But Beats Estimates On Cost Cutting [View article]

    I amnot bashing. I am doing math.

    I get notified whenever a comment s made on my articles.

    I do not need to have a stake in a company to write about it.

    Here is the math.

    Interest payment is $1,750,000 a year.
    Let's assume the company makes $12,500 per procedure.

    It takes 140 procedures to ay the interest.

    Now let's look at operations. Let's assume $4,000,000 a year.

    That takes 320 procedures.

    We need to see 460 procedures a year to operate the company and pay the interest.

    That is 38 procedures a month.

    The pace is nowhere near that.

    Now consider that in two years they need to come up with $25 million to pah the bond. Where will that money come from?

    Where will those extra 2,000 procedures come from?

    Take a look at the inventory numbers. Do they look like numbers that can drive the installation volume needed?

    Please, stop calling me a basher and put up your math. I think many readers would like to see hat you come up with.
    Nov 15, 2015. 08:45 PM | Likes Like |Link to Comment
  • Enteromedics Reports Q3 Loss But Beats Estimates On Cost Cutting [View article]

    Forgive the typos. Answering from phone.

    This company has $25 million in debt that is due in 2 years. They need to pay 7% per year to service that debt.

    Have you done the math?

    How many procedures are needed to service debt?

    How many to repay the debt?
    Nov 15, 2015. 02:16 PM | Likes Like |Link to Comment
  • Enteromedics Reports Q3 Loss But Beats Estimates On Cost Cutting [View article]

    I know all about that. It has been the case for a bit if time now.

    I am not bashing. I a simp,y speaking reality.

    You will hear from me from time to time as us appropriate.

    Add more if you so desire.

    My opinion is that this market is a very small niche and that installs will not be enough to service and pay off a $25 million note.
    Nov 15, 2015. 12:41 PM | Likes Like |Link to Comment