The Highwayman

Biotech, portfolio strategy, carmakers, growth
The Highwayman
Biotech, portfolio strategy, carmakers, growth
Contributor since: 2014
Smart of you to wait on purchasing it, you're grabbing it at a bargain. I've loaded up today.
Here's the way you should look at it Office Rat:
1. SIGA has already been told time and time again that they're in the wrong here, yet they continue to drag their shareholders and company through the mud by denying the judgements that have been passed on them. They acted in bad faith plain and simple. The judgement award is a substantial sum, but surely SIGA has enough existing future contract revenues and pipeline to bear this settlement.
2. PIP's share price is being artificially suppressed. Plain and simple.
3. The Supreme Court, in my opinion, will deny the appeal as this has been in the courts for 8 years and SIGA has been found acting in bad faith everytime.
4. If SIGA were to go bankrupt, PIP and other creditors would take control of its assets and utilize them for their own gain. Not exactly the best victory, but still enough to put a smile on the face of PIP shareholders.
ABBV, is a 3 pill regimen. The cost of which will, in all likelihood, will be lower than the price of Harvoni (for 12 weeks - even though a majority of patients can do an 8 week regimen for roughly $65,000) but higher than Sovaldi on it's own. Harvoni's patient market is larger and has far more approvals than 3D. The loss in sales of Sovaldi or Harvoni to ABBV's drugs is, at most, 15-20% over the next year...that's in the US and assumes neither GILD, nor ABBV, get approvals elsewhere. Oh wait...isn't GILD already approved in Canada and Europe, with Japan (the largest Hep-C market in the world) to come? Strange then that the price of GILD is so low...it's called manipulation and it's founded on the backs of shorts thinking that ABBV will actually pose a long-term competitive threat to Gilead...all at the expense of retail holders who believe in GILD's potential and know how much of a discount it's trading at right now. Once ABBV pricing is released - GILD will skyrocket.
Decent article. A few things not mentioned were the benefits of the Eagle Ottawa acquisition, the fact that even though some automotive companies (namely Ford) are seeing lower profits as a result of consumer habits in emerging economies, Lear is not solely dependent on Ford or GM...they have a number of other partners and the potential to partner with new ones through Eagle Ottawa's client base.
Lear is grossly undervalued by the market with a PEG around 0.50...I see no reason why this shouldn't sky rocket over $95 - $100/share in the next month as they release earnings as well as Ford and GM. Hopefully, earnings as a whole are able to shake this downturn in the market...I feel that this is fund/MM induced volatility over a little more than nothing in the global economy...the only place I'm really worried about is Europe, but the ECB won't allow the economy to go into another recession.
I agree with you. I purchased a number of longer term calls and lowered the cost basis on my existing shares with a few buys. If you look at options volume, someone purchased and sold large volumes of puts/calls for hefty profits when the drop started...seems more like a coordinated decline rather than a correction due to market news.
What I'm trying to say is that some entity(ies) has(ve) been dumping shares to make money on the downside and then will gobble up new shares to drive the price higher going into the end of the year. To me this is blatant stock price manipulation...a $17 drop in share price over a little more than 2 weeks and 15 consecutive days of declines on news that isn't materially significant enough to warrant such a large dip...especially since the Ford news occurred yesterday, when the stock was already trading down almost $13 a share from it's $103.75 high.
Here's the dip you've been waiting for mister.b...and what a manipulated, unwarranted dip it's been.
What's your take on the current drop in Lear's share price? I believe that it's been manipulated downward to satisfy options volumes. The company is increasingly outperforming and not being recognized by the market...a $17/share drop in share price over the last 2 weeks is completely unwarranted.
Your views were similar on QCOR and now I'm up 400% on holding long and strong.
Current price is supported by earnings and growth. CEO and all other stock sales are part of a planned sales program (most of which are options based sales), so they automatically trigger at a certain points throughout the year.
The CEO has also been on the road to retirement for some time, so it makes more sense that he would be divesting most of his holdings in the company now that QCOR is on its road to being "bought out" (more of a merger - that's why the quotes).
To Quoth and all other SA authors regurgitating the same information regarding Acthar and QCOR, after awhile it just becomes tiresome. Please stop beating the same old "proverbial horse" regarding potential Acthar side-effects and put the whole situation in perspective.
How many other drugs have amounted in patient deaths if they're treatments of last resort? Not to mention the fact that many of these patients who passed away were also on other medications and were extremely ill. Of course those that are short don't take into account the thousands (or tens of thousands) of patients that Acthar has helped over the years. Utilitarianism is the name of the game when your dealing with treatments of last resort.
Not disagreeing that it will be a volatile year for Ford...just disagree that it's "not a profitable business model"...they're making money hand over fist even with expenses.
When people stop shorting Ford - keeping it undervalued compared to their peers, and the market - then I'll understand the argument.
You think Ford...who had $900+mln in profit this quarter, after $100's of millions in "unfortunate" expenses, is unprofitable?
Ford is set to have $7bln - $8bln in profit for FY'14...that's pretty profitable don't you think?
I completely disagree. The European loss this quarter was almost $200mln less than the previous quarter. Mix in the fact that they won't be paying out these large sums of money in warranty costs and operations, and warmer weather to boot, and you have a much more profitable company.
To say that Ford is dead money is true, but that's only because it is so manipulated by funds, traders and MM's that a minor hiccup is magnified to the (n)th degree because everyone and their mother has taken a short position this year. Earnings seem to be going well for the majority of companies releasing them over the past few weeks, which means there's more strength in the overall global economy. The only reason you have all of these naysayers predicting doomsday is because they're on the wrong side of the trade and will do everything and anything to hinder market progress.
I am not saying that some stocks aren't out of hand...because there are many. LNKD for instance is one of them, along with AMZN and a whole host of other biotechs/technology stocks. To say that Ford is by any means overvalued is a complete and utter joke, as the company is not only generating large profits, but is showing strong future growth because of a record number of new model rollouts this year.
To have 2013 and 2014 be relatively flat YOY isn't much of an issue to me as the company had one of their best years in history in 2013 and to repeat the same again in 2014 (and even bigger in 2015) proves that the company is way undervalued...especially when you compare them to the likes of GM.
Phenomenal company, great CC and they deliver every time even when the market is full of blemishes. Those who short the company based upon their relation to Ford and/or GM, should realize that even with their dependency on these brands, the company itself is extremely diversified. Ford and GM only missed because of the severity of the weather from December - February, and other costs for restructuring, pensions and recalls.
Lear was still able to do very well in the face of all of these headwinds, and the downturn in price today is nothing more than the market's inability to see the strength of this company separate from GM and Ford. With increased A/R, strong buyback and growth potential for the future, along with a mountain of free cash, Lear Corp. is a company everyone needs to invest in ASAP - especially when they're undervalued compared to their peers and will see strong growth thanks to health in GM and Ford over the summer months.
These are ambulance chasers. I believe these same groups are suing the company for not creating proper value for shareholders and allowed the price to be manipulated by hiding information. That was back in September of 2012.
I for one think we should have received more cash/share, but think that by the time the deal closes (if no other bidders) we will net around $75-$80/share + $30 in cash (Total $105 - $110). That's assuming regular growth of QCOR and MNK and no positive catalysts occur.
It probably would have, but this deal doesn't prevent it from doing so. Even if the positives don't come to fruition before the finalization of the agreement, the shareholders of the new merged company can still experience these positive effects because they'll own QCOR and MNK.
Waiting for the clouds to lift might have taken too long and would've allowed for shorts to continue with their price manipulation. Doing this deal helped stabilize QCOR's PPS while leaving room for them to grow. Best of both worlds.
I meant in comparison to fines levied against companies of similar sizes with similar accusations being brought against them. Recently, another one of Citron's infamous short targets (NUS) was fined $540,000 by the Chinese government for improper marketing practices. This isn't in the same industry as Questcor, but a comparator to how thin some of Citron's arguments are. Citron made claims about NUS going to single digits, being probed and having shut down etc. etc....but nothing has come to fruition. Unfortunately, people get swept up in all of the noise generated by these short sellers that they fail to see the entire picture.
Another quick note is that Abbott Labs was fined $1.5 billion for off-label marketing. This is a 38:1 ratio in comparison to the size of the company ($58 billion). In that case, Questcor would probably face a fine (if found guilty) of between $75 - $150 million dollars. Although one must take into account the fact that Acthar is the only significant revenue source, the drug has 19 indications with strong markets for relapses etc. There's no need to go off label.
There is no FDA investigation. I don't know why people seem to believe that argument. It is a false statement purported by Citron Research and other short sellers. The FDA said they were reviewing the material Citron Research had sent to them and not that they were investigating Acthar or Questcor. That was a month ago and that was already after they'd had it and done nothing about it for 2.5 months. If it really were of such a magnitude that the health and safety of patients was at risk, there would have been a decision made by now.
Why would a company that makes money hand over fist selling a reputable product, suddenly dilute it to increase profit margins? Makes absolutely no sense to turn a healthy, growing company into a fraud...it's simply common sense to know a lie from the truth. Additionally, the fact that there are a multitude of other trials ongoing that haven't found this information doesn't bode well for Citron's claims.
MoMo, it essentially puts in a floor price at a new high slightly above the previous 52week high. It guarantees QCOR holders cash in hand and then shares that fluctuate based upon both entities' performances. It has infinite room to grow and a base of $30 + the additional MNK shares. It was smart to do so as it stopped short sellers from manipulating the price.
Although I do agree that we should've received more cash per share ($40/share), the deal still has large upside potential that could increase the value to QCOR (and MNK) shareholders.
Appreciate your insight Adam. Assuming Questcor continues to perform as it should, MNK has the ability to pay off the total $2.4 billion in debt in a very reasonable time span. With the new tax domicile, along with growth from both companies, FCF could reach upwards of $300-$400 million in the first year alone. That excludes the existing cash balances of both companies (just over $300mln for QCOR and around $245mln for MNK). I think that a company like MNK wouldn't agree to merge with a company over its market cap unless they were secure in their investment.
All of the past blunders by companies doesn't really equate to the same thing, as QCOR is a cash machine that has been operating within the law from what I can tell. There is no emotion in investing and that's why most people argue QCOR's story...moral issue not financial/legal issue.
I assume volatility in Questcor's Acthar has to do with 2 things:
1. MS scripts increasing/decreasing because of seasonality
2. Acthar vials being needed for R&D and trial costs
You are wrong on so many fronts it's somewhat unfortunate to see. Hopefully you become informed in doing further research.
From every short position you've initiated you must be underwater. Additionally, your existing puts (which you publicly disclosed in your previous article) will also be out of the money. Since, if I remember correctly, your puts are expiring this week this seems like a last attempt to initiate downward pressure on the stock.
For shame Raven, for shame.
Too many sub-par theses on the short side. No information on the "labs Citron used", FDA has said they are reviewing the email and not launched an investigation (which after 3 months seems pretty unlikely they've found anything), the "highly purified" argument has already been debunked and Questcor answered short seller comments directly in their 8-K. For some reason that's not good enough for shorts because they (yourself included) are trying to bait them to disclose their manufacturing process - which is widely held to be an industry secret.
Nice way to link only to your articles and not the ones that proved you (and Citron) wrong during that time.
Christopher,
I suggest you take a look at the comments on QTR's last article as it will detail a number of key issues in regards to the tests conducted by Citron's "world class laboratory." The measurement of the active ingredient(s) was done incorrectly and is probably the result of such a low IU. Additionally, we don't know whether the published data from Citron's lab, where the 16IU was found, is from the half batch or the one with the chain-of-custody information attached.
As to your second paragraph, QCOR has come out with an 8-K directly defending itself against a number of short theses. If you know QCOR, they have rarely, if ever, responded to short arguments as they know the drug and are confident in their ability to steer the company in the right direction. I like that as an investor because it makes me feel safe in my investment knowing they don't consider short-sellers a real threat and are acting more like a mid-large sized pharma than a small-mid biotech. Based on my above explanation of QCOR, I feel as though it's much more likely that the FDA found nothing wrong with Acthar and will probably not do much more than request a label change on vials currently in production. If it were really a health, potency or safety issue, the FDA would recall the drug immediately and not wait 3 months to make a decision...that's incompetent on both themselves and Citron. My other question is, why would Citron, who's had this information for 3 months, wait until 2 days after a strong earnings report to release it? To me, it's non other than a coordinated short attack to allow for covering.
Another thing to watch when looking at Questcor's price (manipulation) is to look at the size of options being played. This OpEx, there were a number of put options trading between the 60-70 strike price for March 22. After that short spike downward a number of the positions were closed for a hefty profit. That's collusion right there. I'd also suggest you look at the amount of shorting occurring daily through either shortanalytics or FINRA data (more accurate). The last week or so, the daily short interest has been within the 45-65% range, with around 61% of the volume being shorted yesterday alone.
Shorts paint a very gloomy picture for QCOR, but it is they themselves who are much more controversial and fraudulent.
Yes...they've grown at nearly 40-50% YOY over the last 3-5 years with a faulty drug that doesn't work. Additionally, 3500 doctors are prescribing Acthar (much higher than 3-5 years ago) and they are in cahoots with 30+ laboratories doing clinical tests on the drug for efficacy and new indications. So, after all is said and done, they've kept this "huge placebo drug" under the radar for the last 13 years from the FDA, patients and doctors alike....please.
As the FDA approved the NDA in 2010 for the same amino sequence found on their package insert, I highly doubt that they will say Questcor was deceiving patients & doctors. In that case, the FDA is at fault as much as Questcor is for approving that labelling then.
Your stock sale comment is completely ignorant and misleading. It's a planned stock sale of options given to Don as a result of his payment plan after growing the company so well. He hasn't removed any of his core position and the fact that it was sold in the low 60's and not at the spike to 65 or after "news is released" where the stock would spike, shows just how misguided your information on this subject is. What you're discussion with a fund manager has to do with the science behind Acthar is beyond me...but the only person of value is the university professor. The pharmaceutical veteran only matters if they were in the R&D or product development departments...the rest wouldn't give them enough insight into the company and the understanding of the science behind drugs.
Well informed analysis. Just to clarify, I didn't say that ACTH was made up by you or Questcor - I know what the term ACTH means. We shall agree to disagree on the issue of the $100/vial as I believe people who are not familiar with science (like myself) would interpret it much differently.
The issue I have is that the FDA approved the same amino sequence in 2010 for the NDA process that went along with the IS orphan designation. Since that's the case, your discussion as to whether they realized many years later that it was actually dACTH could be a possibility...but that would fall on the shoulders of the FDA and not Questcor. Additionally, the amides that do have issues (25 and 30) fall out of the "active sequence" absorbed by the immune system (1-24) as stated by researchers and those who develop synthetic Acthar. By this account, why that would be more than a "labelling issue" is beyond me, as it would fall in the realm of having no significant effect on the implementation of the drug within the human body.
I have a few questions for you that could help me understand this better:
1. If Citron's findings matched dACTH in 25 but ACTH in 30 (according to Rinkers) how can that be possible?
2. Wouldn't using the litmus test as opposed to the graded bioassay produce a different potency result? (essentially solely measuring the active ingredient compared to measuring the active ingredient's effect across the entirety of the gel)
Raven, you always give me a laugh. I do agree with you that Ford (F) is undervalued though.
From my understanding, the "real Acthar" you stated in Sigma-Aldrich along with sequence B in the table above, is not "highly purified Acthar" but that the preparation done to extract the corticotropin is highly purified to obtain the ACTH; Not that the ACTH itself is highly purified. From my last article your "highly purified Acthar" comment is an accusation that:

"QCOR extracts only polypeptide chains of 39 amino acids without breaking any of the chains, except of course, the other chains like a B-Growth hormone that is usually attached to ACTH in a biologic system."
Real ACTH is what is found in Sequence B, dACTH (by all accounts) is what was found in Sequence 1, and what I believe Citron is claiming is that Questcor somehow extracts only a purified form of active corticotropin.
You should not "question everything I assert involving the biochemistry or assay of Acthar." If I didn't admit to my wrongdoing, which I have, then I would understand you no longer believing my research. The fact that I have should show you that I am open to opinions from other people.
By the way, in your original comment, you did not clarify that the $100/vial powder from Sigma-Aldrich was, in fact, not the same thing as Questcor's Acthar. Only after I questioned your link did you clarify your position...otherwise, people who saw your comment might have assumed that there was a competitor selling "purified non-disturbed Acthar" at a much cheaper cost to Questcor.
You and I (along with others) both commented on how the graded bioassay is the proper industry test conducted to determine potency. The fact that it was not conducted shows that this "world class laboratory" chose not to implement an industry standardized test in this case...for what purpose would they do so unless, because this report was meant to have a negative impact on QCOR, it would have knowingly generated a much smaller level in potency?
You stated in the second sentence of your comment to me that the Sigma product is "purified ACTH (not dACTH)" but yet say that it is "real ACTH" in the last sentence...I assume you mean that real ACTH is purified ACTH or vice versa?
I appreciate your comments physdude, I just don't like being called a liar, nor do I like it when someone tries to assert a falsehood as fact without actually doing and DD to back up that claim. I have never claimed to be a scientist or expert of any kind and don't like being targeted when I show proper facts to ground my argument, or admit my wrongdoings. This is something short-sellers and manipulators have a problem with...they can never admit when they have made an error (or errors) and continue to attack based on a misguided, "full of hot air" thesis.
I agree that the potency test conducted by Citron was incorrect. I believe that they chose their potency test, knowing that the results would yield far less, in order to found their argument in a falsehood based upon their data.
You are correct. As I am not, by training, a scientist/biochemist/b... of any kind I confused Medium chain triglycerides (Mct) with Methionine (Met) based upon their corresponding codes. In any case, the typo in Citron's report across all three sequences for amide 4 prove incompetent on their part, which leads me to believe that they could have other errors in their analysis as well.
Even with my minor error in coding, your assertion that Sigma-Aldrich's Acthar is the same as the one being sold by Questcor is incorrect as it's in powder form and reserved only for laboratory use. Additionally, the sequence in the Sigma-Aldrich ACTH is the same as the Rinkers sequence, therefore your claim that "Sigma-Aldrich sells ACTH (with non-disturbed molecular composition) purified from porcine pituitary for the equivalent of $100/vial." is completely false.
It seems that my one error in the coding differences in Mct and Met is much farther from "making things up" than your statement that Sigma-Aldrich is selling a comparable Acthar for $100/vial.
I'd just like to point out that the R&D Budget for Questcor in 2013 alone was $59.72 million and is expected to be over $80 million in 2014 because of increasing costs to fund trials. This is something Citron and Quoth continuously overlook when analyzing Questcor.
http://bit.ly/Ola8BY
This is the R&D budget of Questcor graphed for the last 5 years.