When I am sitting around with good friends and family, chit-chatting about all of the Worlds problems and how each of us could fix them in under an hours time, we end up directing our conversations towards the stock market and the news around it. One thing leads to another and before you know it, we are discussing our favorite stock, Antares Pharma(NASDAQ:ATRS), once again.
Just as I wrote back in November, I do believe Antares will be a powerhouse in the future. Since that article, the stock seems to be in consolidation mode, trying to digest all the newer news and is searching for new direction. It's in my strong opinion that I think I know which way the stock is about to proceed. Let me now take this time to show you what's on the very near term horizon for Antares and lets see if you have the same conclusions that I have by the time your finished reading what I have here to present today.
Back in February, Antares got the green light from the FDA to carry forward with their once called Vibex Medi-jet, now called OTREXUP. They put a PFUDA date of 10/18/13, which is the standard ten month review. Due to management has already run a mock FDA test and it passed with flying colors, I expect to get FDA approval a lot sooner. Maybe as early as August. There is no doubt, Otexruo will be the main driver for strong revenues in the very soon future of this company. Management has already said revenues with Otrexup alone will be between 100 - 200 million and I think they are sand bagging a tad. But do not think that's all Antares has to offer. Right now we are collecting about 25-30 million in royalties from Watson(WPI), Teva (NYSE:TEVA) and Daewoong on already marketed devices. It's worth noting too, that Antares just received a 750K from Pfizer (NYSE:PFE) on a upfront milestone payment for an undisclosed future product that is to be shelled out sometime in 2016. Also,we should be going to market come this Summer with another Teva drug delivery product and that is the 10mg Tropin pen or T-jet for short. This device is for human growth hormone that is mainly driven toward children. No disclosed revenue figures have been put on this one but it should add to the pie immensely. The future growth does not stop there and we are just getting started. We have four more deals working with Teva that have had all their ANDA's filed and will be awaiting their turns in the batters box. I expect everyone of these newer Teva deals to come to light within three to fours years and that's being soft on the timeline. Paul Wotton, CEO of Antares, has already stated in the last Corporate Presentation that the relationship with Teva has never been stronger. It should also be noted that Teva cut out a lot of it's "wasted" bio research programs this past fall, due to company restructuring and Antares was NOT one of them. That in itself should speak loud volumes on the confidence that Teva has in Antares. Getting back to the growth story, to follow up after Otrexup is QST. This is Antares' answer to the testosterone market. Again, no revenues have been put forward on this future marketed product, but one does not have to look far to see that it's a very fast growing market. QST will have a lot of competition out there as there are many companies for testosterone gels on the market. We just have to hope that the needle-free injection device does a better job at delivering the drugs effectiveness over other methods and if it does, QST will help to grow the business in a huge way. We are not done yet. Management just revealed last week in the Cowens Healthcare Coference that we are in the works for a QS-M injection device. Some, as myself, have speculated that this is a self ministered morphine device. No future potential revenues have been put on this one as well because it's so far out there on the pipeline chart, but it's just another big piece of the pie. And finally, Mr.Wotton spoke at the Cowen HCC about 40 new drugs that could be used in our devices that are non-binary. In other words, 40 potential new products that could hit the markets very soon and help to bring in more revenues for the company.
As you can tell, Antares is gearing up to be a powerhouse contender in the Pharma World. As of the latest filing, the company has 33 million in the bank and just raised 55 million through a stock offering back in October. With 88 million in the bank, no debt, very little cash burn, it looks as if the company is set and ready to sail the high seas with no worries at all, right? As one of my favorite ESPN commentator, Lee Corso says, "Not So Fast!!". Here lies the problem with the stock. There are still some unknowns. Like, how much cash burn will be used in the upcoming manufacturing of Otrexup? Or what is the marketing cost? How much are these 30+ sales rep's for Otrexup getting for their jobs? And I am sure there are few more unknowns as all pharma companies have them. This could be one of the many reasons the companies stock has not pushed forward yet due to the unknowns. I mean, when I last wrote an article about ATRS, back in December, we were a tad higher than today's share price of 3.70. What gives? So, who better to ask then the man himself and that would be the PR guy for Antares, Jack Howarth. In our phone conversation, I flat out asked him, "Why all the selling pressure these last few months?". He told me that he did not think it was of any great concern because through his contacts with the bigger institutions holding ATRS stock, none were selling. And in his beliefs, it was the retailers causing all the headaches for us true longs. After digesting this, I tend to agree with him. When you have an average 1 million traded share volume per day, it does not take much for the sellers to bring the price down. The same takes place for moving the stock up with buyers. High volatility is not uncommon in a sub 500 million market cap stock. Mr. Howarth also told me he was working on getting more institutional help to purchase more shares and that this would solve this problem. After our short, but much needed phone conversation, I felt much better knowing he not only understood the problem, but wanted it handled quickly being he was a 500+K share member, on the open market ,himself.
In A Nutshell
The company is executing a well thought out plan for the future. Revenues are not that strong as of right now, but the stars are slowly aligning. The question you have to ask yourself is, do you want to buy the stock now and wait out this process for another year before the huge revenues start to come in? Or do you want to pass this opportunity by and take a chance of missing the speculation train that could cause this stock to lift off at any given moment? My 82K shares are sitting right here waiting out the tape. Management is rock solid and have made nothing but rock solid decisions so far. I have no reason to doubt them now and I think I'll just be patient a little while longer.
Disclosure: I am long ATRS. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: I have been long ATRS stock for over a year now and have accumulated 82K shares. I also have friends and family who own a whole lot more. I do believe it's a good investment, but I always encourage you to do your own due diligence and do not take ANY Seeking Alpha Contributor's direct word for it.