Seeking Alpha

Zogenix down on heavy volume

  • Shares of Zogenix (ZGNX) currently trade down 10% on double normal volume in response to yesterday's post close earnings report.
  • Its recently-approved opioid drug, Zohydro, is controversial due to its perceived abuse potential.
  • The company did not provide revenue guidance for 2014. It did disclose that it expects R&D and SG&A expenses to come in at $110M - $120M.
  • Press release
Comments (20)
  • ScottyGreen
    , contributor
    Comments (86) | Send Message
     
    Weak holding longs are panicking for no good reason. I'm actually grateful to add HARD on this drop! Thanks for selling me your shares!
    6 Mar, 02:25 PM Reply Like
  • WhitneyB
    , contributor
    Comments (209) | Send Message
     
    Pretty hard to provide much guidance when there are so many critics gunning to have FDA approval reversed - but there is nothing more to see here, folks, this news is old. Long and adding.
    6 Mar, 02:34 PM Reply Like
  • ScottyGreen
    , contributor
    Comments (86) | Send Message
     
    agreed x10. I knew they would be tight lipped during CC. too much at stake with this golden goose they have in zohydro. Numbers will speak for themselves over coming months, plus they probably didn't want to act too excited and add more fuel to the fear monger media hounds that like to make headlines with catchy scary sounding phrases like "super potent" "crisis" "epidemic" etc etc... GLTAL's that understand the amazing nearterm potential of this company!
    6 Mar, 02:40 PM Reply Like
  • followsgartman
    , contributor
    Comments (22) | Send Message
     
    Rest assured where there is smoke there is a fire about to rein down on the mechanisms that led to an approval. There are serious issues surrounding the subjects used in the trial phases. Expect more to come.

     

    Moreover, Purdue had to incorporate an antagonist - why was Zohydro treated differently in this respect? The FDA adopted a new set of guidelines three weeks prior to Zohydro's approval, and why has only Humana stepped up to the plate thus far? The powers that be at Humana are likely discussing this matter right now ... these are the questions you should be including in your decision making process. Zohydro is a hot potato that should not have been granted an approval without an antagonist in its core. What is more important, the lives this drug will effect negatively, or the fact it is a short term mechanism to alter how the mind perceives pain. Over the long-term better results are achieved with 800mg Ibuprofen tablets‎. Long acting Zohydro may be perfect for certain "end of life" patients, and when used as a short term solution, but it is nothing more than a heroin lollipop if used to treat pain in any other manner.
    6 Mar, 04:33 PM Reply Like
  • Jbgoose
    , contributor
    Comments (1013) | Send Message
     
    I posted just the other day I sold out, up about 108%. Not bragging and feel the pain for those not long - but if not long why stay in a stock that was concentrated in ownership and not able to stick above 5 like $PTIE or add a hundred plus funds like $ACRX after shoring up finances with a promising product and military contracts... But I plan to get back in around the time institutional sales should show a strong start, adaptation, as Scotty is correct. Zohydro is priced correctly and is a far less potent first line around the clock, proven opioid (in itself). Gartman above is out of touch with the reality on the ground and obviously has strong views surrounding pain management. It is nothing personal- you just are political and totally wrong. The antagonist you speak of is not even ART and Naproxen is not equiv. to Zohydro in mostly any manner, let alone in the same acting class. The comments about the lollipop speaks for itself. Good luck - This is a sale for many. No need to restate the facts yet another time for yet another misguided and provoking poster.
    6 Mar, 06:42 PM Reply Like
  • followsgartman
    , contributor
    Comments (22) | Send Message
     
    Hi Jbgoose,

     

    Your comments will be valuable to those investors aligned to your thinking, and this is what makes a market. However, if we look at the situation from a purely financial perspective then one will need to take into consideration the additional dilution that will be necessary to fund the companies' operations through 2014. Zogenix will need North of 100 million (based on the numbers discussed in the conference call).

     

    Nevertheless, I am unable to pack my morals into a bag and look the other way while innocent people (those people prone to addiction), get sucked into the clutches of the potency and corresponding effects this drug offers. Narcotics are not the "be all / end all," mechanisms available to manage pain. Educate yourself on all the options one can use to deal with pain and then we can talk.

     

    Moreover, I have earned the right to make comments in this forum. I have earned multiple financial licences in multiple countries, and have been an active student of the market for greater than thirty years. I have put together many public vehicles from scratch.
    6 Mar, 07:37 PM Reply Like
  • Jbgoose
    , contributor
    Comments (1013) | Send Message
     
    Gartman: people on the forum know my history, probably too well. But hey, I am honestly batting 100% on the stocks I do research and discuss on SA and more than a few have followed, discussed or even spoken with me on the phone (gasp!). I have much experience in pain management, I have multiple doctors and specialists in my family as well as hospital administration and pharma executives. Thanksgiving conversations are interesting... We also have major bone issues, cancer and other experiences with pain management, success and failure. So we can talk now/ no need for me to 'study up' - that is an arrogant comment. Oh- I too have licenses and over 16 years in 'the markets' from various levels. The last being executive and on the road just like you ( I believe you ). That said- your use of the heroin lollipop... We all know there are morphine lollipops used for cancer and end of life, were sought after years back- today these are highly controlled and no longer a street drug in the epidemic sense. You know the stats- since 2009 pills are not the epidemic they once were and users turned to street drugs. Don't debate me on these stats- debate all of the AG's and university studies. Debate the doubling of heroin abusers. JP is correct (below) in about every way.

     

    The antagonist is a silly argument and ART is easily defeated by any pill 'addict'. Period. REMS is in place and ZGNX is well ready for this launch.

     

    Happy to speak with you off line to discuss and educate.
    7 Mar, 08:42 AM Reply Like
  • jpgallo05
    , contributor
    Comments (7) | Send Message
     
    If you say this will create a new class of drug addicts; there's fire with that smoke. I think instead on the abuse level at its worst, it's more of another shelf item for the addict. There are already plenty of options in prescription drugs aside from Zohydro, the level of abuse will follow the same growth curve with or without it. Compared to what's already out there (in my humble understanding) it's average to mediocre in it's potential appeal as a heroin substitute to abusers. It's design purpose is legitimate if you have ever dealt with a terminal family member or anyone in constant real pain. Options in these situations are good and welcome and whether you believe it or not, necessary. The sky will not fall with this I think the FDA got this right and knows it. I'm long an adding.
    6 Mar, 08:53 PM Reply Like
  • followsgartman
    , contributor
    Comments (22) | Send Message
     
    Hi jpgallo05,

     

    You have proven my argument. There are plenty of other options available to manage pain; therefore, adding Zohydro into the mix is unnecessary. However, when Zogenix is successful in inserting an effective antagonist into Zohydro's core then they earned the right to compete in the pain market with the likes of Purdue.
    6 Mar, 09:27 PM Reply Like
  • Aftershock
    , contributor
    Comments (4) | Send Message
     
    If you are a chronic pain patient, why would you use an opiod antagonist med (coincidentally is used to treat depersonalization disorders)? Its effects are always stronger via injection (cost issues among a host of other potentials), almost as strong as morphine, and has already been linked to abuse and misuse. Zohydro work, not as a short term or "end of life" situation, but rather for:
    1. Patients who are at an intolerable level of acetaminophen (i.e. Vicodin), requiring constant blood/liver monitoring.
    2. Require pain relief and do not wish to move up to the heavier duty meds like methadone (extreme withdrawal issues and one of the leading opiods involved with narcotic deaths).

     

    In addressing your other incorrect arguments;
    - When there is smoke, sometimes the fire is already out.......really, using an idiom to make an argument seems a little juvenile and desperate
    - And making a statement, "Expect more to come" does not validate facts to which you seem to be using that no one can see
    - As you stated the FDA adopted new guidelines BEFORE the approval....hmmm.
    - As stated in the earnings phone call, Humana isn't the only one on board, only the only named one. There are others, currently not named, that are on board, perhaps in contractual discussion, or maybe Zogenix does not feel the need to toot their own horn by naming everyone who has inked a deal.
    - Don't all medications dealing with pain alter your minds perception of it? Isn't that the point, to change your perception (feel less) pain? Also, long term ibuprofen use leads to a host of issues; gastric bleeding/ulcers, leading to further issues, i.e. surgical intervention, an hey, why not, even death. NSAIDs are not a cure all and can be deadlier than hydrocodone.....cardio... risks, just to name a biggie.
    - How else would you recommend to treat pain? Are you stating that only end of life patients suffer enough pain to require your Herion Lollipop? Sometimes juvenlie remarks require a juvenile response. My apologies.
    6 Mar, 09:31 PM Reply Like
  • followsgartman
    , contributor
    Comments (22) | Send Message
     
    Apologies are unnecessary. It comes down to this ... Do you have personal experience with opioids? Do you understand how opioids affect one's respiratory system? Have you had an opportunity to witness these effects? Do you understand that these effects can be cumulative? Do you realize that if I were to titrate (successfully) off opioids, and six-months later I start a pain management regimen again that my resistance to a potential respiratory failure is less, and the drug’s usefulness at treating pain is less. Moreover, this effect is magnified if (unbeknownst to my doctor), I have previously abused opioids. However, I want to chase the “high” again, the peak of the high I want to achieve lasts about two or three consecutive days. I may learn the hard way by taking more and more that it is impossible to duplicate. Eventually, my respiratory system shuts down. Doctors are unable to read the mind of an addict, they can ask questions, probe, test a patient's urine or blood, but certain patients will continuously fool the medical expert. Additionally, there are certain docs who will write these kind of prescriptions with both hands.

     

    I mentioned that I am a student of the markets, and frankly after 30 years I can say honestly I know very little about very little. However, I am committed to the belief that Zohydro’s effects must be manufactured to be nullified if crushed. Any safety provisions put forward by Zogenix and their medical team are simply smoke and mirrors. Moreover, if you were to poll every opioid user, past / present do you really believe no one has crafted an opioid lollipop?

     

    I believe society has lost its moral compass, and Zohydro provides a perfect example in support this belief. I believe as Americans we need to be looking out for each other, and less toward our own self-interest.
    6 Mar, 11:08 PM Reply Like
  • ScottyGreen
    , contributor
    Comments (86) | Send Message
     
    13 comments, and majority of them are soft bashing zogenix or zohydro while soft pumping Purdue. Why do you have such a passion/angst for this ONE company? Honest question.
    7 Mar, 12:11 AM Reply Like
  • followsgartman
    , contributor
    Comments (22) | Send Message
     
    It is quite simple, OxyContin, extended-release Oxycodone, Kadian, Embeda, Exalgo, and Opana all of some kind of associated abuse deterrent; thus, pain docs have many “go-to” options available. Moreover, Zogenix (allegedly), used moral-suasion with the authorities to get to approval. Investors need to dig deeper to learn about the issues being discussed. However, the fact remains both the markets and patients have other safer options to choose from. Zogenix stated in their conference call they expect to have an abuse deterrent Zohydro in 2015, maybe with the FDA’s help they can speed up the timeline.
    7 Mar, 01:07 AM Reply Like
  • Jbgoose
    , contributor
    Comments (1013) | Send Message
     
    Gartman, you're all over the map. Firing off allegations about inappropriate behavior by company officials, your career has nothing to do with the pricing of this company nor pain management. You have not provided any credibility regarding your own personal experiences with pain management as well. I do believe you are educated and I do believe you feel strongly about your opinions. That's all fine and dandy but has nothing to do with Zohydro, it's place as a minimal first line ER opioid medication- doctors would much rather start a patient on a less morphine equivalent medication than any you list above. Liver disease costs society far more than you understand and those few prone to abuse are also more likely to consume alcohol regularly (poly substance abuse). That only makes the situation worse. Regardless, this medication will not be a common street level drug. Many people are allergic to oxy or hydro as well. The option for hydro only is needed. MS Contin is crushable, and not pulled. Oxy is about twice as potent on the scale. Investors here have dug deeper as you suggest- why.

     

    Please be a contributor and help us in the dark. Please provide a link and tell us exactly what devious actions you want us to find? It is more productive and easier to debate facts vs some person posting accusations on Seeking Alpha. I have no reason to type this, I made 108%. Nothing earth shattering, pays some bills and is a lot of fun.

     

    Opana was given the green light as is. You need to update your play book and practice the speech. Your facts are wrong. Have you ever seen or needed Kadian? I have. It's plastic pellets, and it would take an hour to try to crush to abuse. But an 'addict' knows exactly what to dissolve it in and how. Just look it up. Smarter people can find the studies themselves to defeat all ART and post the work around all over the web. However- with all of these medicines the thought does not cross the mind of a true patient to even attempt this. If taken as directed, Kadian does work well to minimize pain. There is no need to crush it or 'make a lollipop' - All of that is pure nonsense. Only people who are already addicted to substances and suffer the disease of addiction would even think this way. They are already needing intervention and treatment for the underlying conditions. When a real person is prescribed any medication for real medical reasons, they are not criminals just because of the medicine. They are not immediate addicts. They have been examined and it has been determined via proper judgement as being medically necessary to be prescribed a particular medicine. There is so much discrimination against pain patients due to the stereotypical junkie character on TV. It is not right for society to judge anyone based on pain. In the workplace is it OK to cheat an ADHD script? Do you know how many students and executives honestly do this? It is a larger % than pain medicines in most studies. Though few have been done. I don't see you mention that? In the workplace is it ok to be on the dozens of medications that are designed to impact behavior and judgement, by design. Being functional and productive is wrong? Think out the entire issue out and then post truths not an agenda.

     

    Now your only issue is you simply want them to wait for the ART Zohydro. Did you ever think the FDA is aware of the stats and devastation liver disease is causing Americans? Perhaps this is why the medication is approved as is? Antagonist is not the answer. The new Oxy formula caused an increase in the milligrams needed for the same pain score- it is actually less effective and creates issues in and of itself. But instead of fighting with politics I gave up and started to just trade it. Honest patients work with honest doctors to achieve an appropriate level and mix of various medications in the arsenal. ART is sealed and delivered. So now patients have to take a bunch of chemicals they don't know long term impacts about. Do you drink? Do you lock your fridge when someone under 21 enters your house? Do you drink in public? Anything someone else has issues with? Do you eat too much sugar?

     

    So- exactly what issues are you talking about... Please provide examples and explain? If anything most believe that this particular approval process was one of the most intense and closely watched debates in a decade. Some on the panel were embarrassed by politics entering the equation.

     

    You truly think ZGNX acted fraudulently? How? Watch where you step... As in this group has followed these stocks for years. Try to pull out BS, it is not going to work.
    7 Mar, 11:24 AM Reply Like
  • ScottyGreen
    , contributor
    Comments (86) | Send Message
     
    As an investor in ELTP and it's massive ART potential and pipeline, I can't argue with the need for anti-abuse formulations both financially and ethically. I kind of wish zogenix would speak with them about doing their anti-abuse formula since it's modular (can be moved from one drug to another with ease and is working with other opioids) They already have a platform that is proving to work thus far in testing, and have a very competent CEO/scientist running the show. Nasrat Hakim, ties to Embeda/Watson/Actavis/... DD them here and elsewhere some time to get up to speed, amazing potential.
    As far as Zohydro is concerned, I do see a need for this drug and it's benefits to those who truly need it (no apap) Some people can only tolerate hydrocodone and not oxycodone and vice versa. l'm sure that zogenix is doing everything in it's power to ensure it gets into the hands of those that truly need it (including free locking dispensers), and docs are not going to be handing it out for minor injuries. This will not be prescribed in as many situations as hyrdocondone/apap or hydrocodone/bt (ibuprofen) combos. Those are commonly prescribed for a toothache, or minor injuries, and I don't see zohydro er being prescribed for just any small injury or pain event, thus limiting it's abuse potential simply by being less available to those seeking drugs to abuse.
    9 Mar, 12:08 PM Reply Like
  • Jbgoose
    , contributor
    Comments (1013) | Send Message
     
    I'm still long PTIE, I do agree with thoughts on ELTP. Also like IPCI. It seems that PFE and ENDP, Watson, Teva and Activis are part of the Purdue three legged stool. AZN is one foot in and one foot out (the RA market) with struggles internally and in R&D so will have to buy the way in if they pursue.... Purdue is the clear continued winner but we can't forget firms like JNJ and BMY - but for a spec the glove doesn't fit, even with 2 new billion dollar drugs, which a Zohydro is not, the stock price of the giants would barely move. PFE - who is going in with a multi facet approach of ART IR and ER one stop shopping. The needle could move some if their strategy works. Just compare them to a polar opposite ACUR. But plays like ELTP are the real specs, some are more proven than others. ACUR still attempts their scare tactic route and clearly that is not the correct way to go - business ethics are simply lacking somewhere in that firm. The marketing team and firm they hired easily used as a 'how not to' in college courses- that's for sure. ART in itself - heck, if it saves some people from the wrong road that's good. Just don't step on the rights of all due to the actions of a very small few - who can be singled out rather easily. I know what CVS has done with prescribing records. That approach can be far more effective than ART... which is always defeated. Although they need to tweak the computer program or have researchers dig one layer deeper to understand that certain doctors will show up more than others because they are in charge of a group that might work with patients who will be prescribed the most amounts of various medicines. And it is insulting to such doctors who dedicate their lives to then have to waste time defending a practice or even a hospital, after being pointed out. We have all the data needed to effectively end 'the pill epidemic' today... But we need resources to do it, ART is not a resource to treat the underlying causes. It is only a deterrent. But the trade is certainly the basket.
    10 Mar, 10:28 AM Reply Like
  • followsgartman
    , contributor
    Comments (22) | Send Message
     
    Hi Jbgoose,

     

    Sorry, but I only read to Gartman you are all over the map. You are clearly passionate about the stock and Zohydro. I believe Zohydro's approval should be revoked until a true deterrent mechanism is perfected. I do not care what happens to the share price; there are several serious players invested that will control the share price for the time being. I will say (without question) I know more about this situation than you, and I have stated that I know very little about very little. I am not challenging your intellect, just your research capabilities. Moreover, there are so many issues that deserve attention here, and by the time we finish discussing them Zogenix will have perfected an abuse deterrent mechanism. For instance, do you want to be long Zogenix when the first major lawsuit is filed?

     

    Let it go now, as I doubt anyone is paying attention to this post. Again, I am concerned that some in society have lost the big picture, and I do not have the time to explain why I believe this is true, but our rhetoric provides a glimpse at why this a truth statement. However, I say again, as American’s our concern and actions should be directed toward strengthening our moral character and thinking about our fellowman as we move forward. I do not believe we are acting like true Americans if we examine everything associated with Zohydro’s approval and this is troubling.

     

    I will give market associated examples that you can think about. In the early 80’s many of us conducted significant transactions by the shake of the hand. Can we do that now? Additionally, when we agreed to take a sizable position on a stock, bond, or option over the phone, we did not question what we had done even though we sometimes learned we lost 50K (or more) before finishing the call, or when someone else made the call on our behalf. Is this one hundred percent true today? We trusted the system, and society, we trusted each other at their word.

     

    Today, we continuously encounter issues that bring into question truth and character, and this is problematic.
    7 Mar, 04:31 PM Reply Like
  • Jbgoose
    , contributor
    Comments (1013) | Send Message
     
    Gartman: I sold my position a few days ago at a very nice gain of 108. I plan to watch and re enter. It would be nice if you backed allegations, as the implications impact all that you post this to, and particularly as you do not seem 100% up to date regarding this subject. You know, the reason I got out is due to the concentrated ownership. I've been aboard, not a tulip in a turnip truck...

     

    I would agree society and business changes much over the years. A newspaper box is still based on an honor system, however. That's a whole other debate. 'The more things change the more they stay the same.' Show your hand. What's so shattering that will soon hit the wire?

     

    A note, I'm passionate and well educated about an overall issue; I've never been married to any particular stock. All is good ....
    7 Mar, 09:09 PM Reply Like
  • ScottyGreen
    , contributor
    Comments (86) | Send Message
     
    Hey Jbgoose.
    Have you heard about this connection between senator "joe manchin" and this daughter being CEO of mylan? Joe is against zohydro, daughter works as CEO for company that makes opioid generic combos. hmmmm.
    11 Mar, 03:00 PM Reply Like
  • Jbgoose
    , contributor
    Comments (1013) | Send Message
     
    Hey ScottyGreen, I did see that but don't see it being relevant unless there is some direct industry connections with Joe; perhaps fundraising and lobbying and such. Particularly if it was with company's with everything to gain in this case. But, I have not looked much Into it - any good articles?

     

    The headlines are maddening. The story itself a twisted political tactic for so many different groups and seems to magically cover up all the past screw ups and open hands on the subject overall, if one was to think conspiracy theory perhaps. I just don't tend to. It's also ironic that it's all no different than simply taking an extra Vicodin with your 4-6 hour directions more or less - killing your liver - but what does that matter.
    13 Mar, 02:01 AM Reply Like
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