I have started doing a mix of technical and fundamental analysis on PTX. I would really appreciate some help on the technical side to understand (i) which of the metrics are most used, and (ii) how to best interpret them and use to our advantage. As part of the charts below I have considered:
• Simple Moving Average (SMA): Identical to the stock price. Where is the value in this metric?
• Relative Strength Index (RSI): Not sure how this measure is valuable, we know that the stock is highly volatile at the moment.
• Average True Range: Similar to RSI, we know that the stock is in trouble, how does this measure help?
PTX Analysis Work in Progress (WIP):
Market Cap: 7M
EPS: -6.39
Ownership:
Insider: 76.21%
Institutional: 30.21%
Outstanding Shares: 14M
Technical Analysis:
Nice downward trend over 200 days:
Fundamental Analysis:
A few things to point out here when comparing `2018-09-30` balance sheet compared with the same time last year `2017-09-30` (in millions):
Assets Compared to the Same Time Last Year:
Cash: -11%
AR: +36%
Inventory:
+218%
Total Current Assets: +130%
Liabilities Compared to the Same Time Last Year:
AP: -201%
Expenses: +37.6%
Total Current Liabilities: +19.2%
A few things to point out here when comparing `2018-09-30` income statement compared with the same time last year `2017-09-30`:
Gross Income: -18%
R&D:
+154%
Total Operating Expense: -7.7%
Net Income: -86%
In the News for PTX:
Currently Pernix Pharmaceutical is appealing a judge’s verdict that Alvogen Malta has in fact infringed on Pernix’s patent for a pain killer drug called “Zohydro ER with BeadTek” however, the patents are considered invalid, and therefore Alvogen can launch a generic version of Zohydro. This ruling can be followed by other pharmaceutical companies in the life science space to create the own version of Zohydro.
Scenarios for PTX:
• CEO resigns at which point the stock will plunge. Please don’t go John Sedor!
• Company declares bankruptcy (52% chance according to
• Buyout
Final Notes:
Does it really matter if other pharmaceutical companies start selling generic versions of Zohydro at this point? The assumption is PTX is already positioned to remain competitive in the market with Zohydro. Based on the fundimentals, management has been working hard to drive down accounts payable and started investing heavily into R&D. One more thing to note is the spike in inventory levels may work against PTX in 2019.
I would really appreciate your input into how else one should analyze companies within the pharmaceutical sector or in general (ie, patents, R&D, drug line). And the best sources to get such information. Maybe turning focus towards research/metrics/indicators of companies on the verge of bankruptcy vs buyout...
Finally and before I forget, how to keep an eye on the buys/sells and get notified when a large position gets offloaded (ie, sold). On the other side of the spectrum, get notified if and when PTX starts diluting it's stock by introducing additional shares from it's 14M outstanding shares.
Note to self: Breakdown the different PTX pharma drug line into current inventory and revenue percentages.
Treximet® and Silenor® are registered trademarks of Pernix Therapeutics Holdings, Inc.
Zohydro® ER is a registered trademark of Pernix Therapeutics Holdings, Inc.
BeadTek™ is a trademark used by Pernix under license.
Thanks in Advance,
Terrance
