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SGP - tulu?

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  • Mis te SGP aasta kasvupotensiaaliks pakute?? Millised on alternatiivid?
  • LHV Pro all on seda teemat veidi lahatud tegelikult..

    Alternatiivid


    sB

  • Lugesin veidi Yahoo message boarde ja vaatasin, mida rahvas aktsiast arvab. Arvamused läksid 2 lehte. Pessimistid peavad P/E suhet ülikõrgeks ja arvavad, et aktsia võiks maksta alla 10 dollari. Optimistid näevad aga head ostuvõimalust praegu, kuna hea ettevõtte saab erakordselt madala hinnaga. Kui aus olla, siis enamus postitusi on bullshit, kuid leidsin ka ühe üsna asjaliku postituse:

    Well, some of the longs may not like what UBS said, but just shouting at them isn't really adequate.

    Let's address the points. First the analyst thinks that SGP is richly priced in comparison to other pharms. This analysis seems to be on trailing earnings, and trailing earnings only during SGP downturn. Historically, SGP has a 25% margin on $10 billion in revs. That is apprx $2.5 billion or apprx $1.66 per share. Clearly they are in for some hard times with the loss of the Claritin and Ribavarin franchises. Let's say their gross revs drop to $7 billion based on the loss of $1 billion from PEG-Intron/Ribavarin patent and $1 billion more from the loss of prescription Claritin.

    This does not reflect fact that despite PEG/Ribavarin being available to be marketed as a generic, there has not been any production to date from generic competition, although the Roche combination has resulted in some head to head competition. Here is a little secret about PEG/Ribavarin administration. Generics are going to have a VERY DIFFICULT time making any headway in this market because the cost of supporting the gastroenterologists prescribing and monitoring this drug really does require a very informed, expensive, and exstensive support network from the pharm manufactuer. The only one who currently has the resources to compete in any substantial way is Roche. So I think the surprise here will not be the erosion to generics as fast and as significant as an analyst who really doesn't understand the practice of medicine but understands numbers might think.

    The Claratin market is also not just a simple case of a generic equivalent. There is some brand name effect for the OTC product. Much like "Tylenol" still has a significant market share even though Acetaminophen is the equivalent generic and has been for probably 25 years.

    So lets say they have a catastrophic year this year with gross of $8 billion. With a gross margin of 75% we have $6 billion. SG&A = $3 billion (probably have an additional one time expense for some of the downsizing.) Research = $1.5 billion, leaving a profit of .5 billion or ~$.33 per share. This is with out the added value from Asmanex, international Remicade (bigger market than one would think becasue of the potential uses across a broad spectrum of inflammatory disorders), and Zetia.

    Zetia has so far had no significant contribution to SGP's gross. Let's look the comments the UBS analyst makes:

    "'Zetia-zocor is a good drug and clearly has a role in the treatment of cholesterol. But we don't believe the profile is significantly better than current therapies and continue to believe the most optimistic of scenarios is factored into the stock,' Sylvester said.

    The analyst also argued that the profitability level for the Zetia-Zocor joint venture with Merck will be low and he expects the franchise will likely face a very difficult pricing environment with 35 percent of the statin market going generic in 2006."

    The comment 'believe the profile is significantly better than current therapies" is just reflective of someone who has no understanding of the LDL problem. In Oct. a supposed head to head study of Lipitor and other statins, mostly pravastatin, demonstrated in a rather unique way that LDL's have to be at 80 or less to totally inhibit plaque deposition (and, in my opinion there will be a future finding that LDL's below 80 will reverse plaquing.) No current statin reaches this reliably and effectively (Crestor may be the exception but will have to be evaluated over time). I predict that there will be two significant developments soon:
    1) physician shift to this way of assessing effective lipid control; 2) Zetia is the only effective addition right now that, in combination with statins, achieves these goals with almost no side effects.

    Unlike Rebetrol whose primary users, in the aggregate, are not a reliable or informed population (with many notable exceptions), the cholesterol market is targeted at a more motivated population to manage its health, the middle class. With the big bulge in baby boomers reaching the age where CV diseases will begin to be the primary cause of morbidity and mortality, the market for statins, despite it transient "leveling off" in this past year, is about to resume its incredible franchise. In addition, unlike the stupidity of some other analyst who claims that the medicare bill will be bad for pharms, the medicare bill could not have come along at a better time for the burgeoning distribution of statin/Zetia combination. Besides being used with Zocor (the Merck/SGP combo), Zetia will be used in combination with almost every other statin with the possible exception of Crestor probably 80% of the time. This will translate into a $10 billion blockbuster that will change the financial picture for SGP significantly. If SGP is a 50% partner on Zetia alone (although I can not find in their info the exact split), this will mean at a minimum of $5 billion. Lets say SGP returns to $10 billion on the basis of their other markets alone and Zetia adds $5 billion. The numbers then will look something like the following: Sales of $15 billion, gross of $12, net after SGA and research of $4.5 billion; - $1.3 taxes = $3.2 billion/1.6 billion shares = $2 per share. At a current price of $16 we have a future PE of 8:1. If the split on Zetia with MRK is higher, the income will be higher. Lets compare this analysis with less than $1 target he says would be unachievble by 2006.

    The most uninformed comment this analyst made was related to the effect of the statin market "going generic". Great, with a generic statin market Zetia will be even more attractive as an add-on because the total cost will be less. What does that have to do with Zetia's prospects? Just the opposite of what he says. So, on that basis the stock tanks $.70. Does this analyst need another job? Probably not. By the time reality dawns on this analyst everyone will have forgotten his analysis and he will still be seen as a valuable source of information!!!

    Alvar - pikk SGP-s


  • SGP-l on huvitav päev: $350m trahvi kriminaalasjas ja UBS alustab aktsia katmist.
    viimane, positiivsem uudis, tundub küll turule olulisem olevat, +2.5%
  • Kohtuasi oli kuus aastat vana. See on nagu CSCO kukuks praegu uudise peale, et dotcom mull on lõhkenud.

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