Post by miamianne67 on Mar 21, 2017 20:57:52 GMT
ANYONE NERVOUS ABOUT OPKO SHOULD READ YET ANOTHER CHAPTER IN THE ROAD TO PHIL FROST'S SUCCESS. READ HOW TOUGH THINGS GOT. WE ALL KNOW HOW THEY ENDED. 
Miamianne
Transportation delays make Ivax stock woozy
Oct 8, 2001, 12:00am EDT Updated Oct 8, 2001, 12:00am EDT
INDUSTRIES & TAGS Health Care, Banking & Financial Services
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Charles Flowers
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Honesty may be the best policy. But when Ivax spokesman Howard Goldman wrote a letter to shareholders Sept. 20, his honest concerns about shipping delays may have triggered the biggest one-day drop in Ivax's stock price this year.
Ivax shares lost 35 percent, falling nearly 10 points in one day to close at $17.90, the 52-week low. Ivax had traded as high as $41 during the same period.
"Apparently, the marketplace took it as an earnings warning, and that caused the drop in share price," said Goldman, who posted the letter four days after major markets resumed trading after the attacks Sept. 11. "By no means was it an earnings warning. Our attempt to update people to the potential transportation issue apparently backfired."
Ivax CEO Phillip Frost blamed an influential analyst, who changed his "buy" recommendation to "hold." But Frost, a medical doctor, refused to take credit for doing the right thing.
"We don't have any choice in the matter," Frost said. "We are law-abiding citizens and we have to practice full disclosure."
Goldman's letter warned, "The recent attacks against America have resulted in some back-up delays and disruption in the worldwide transportation system. While this situation is both temporary and of comparatively little importance in this national tragedy, the company's ability to transport raw materials from overseas suppliers and to ship finished goods worldwide has been impacted somewhat during the third quarter."
As the letter was issued, the Miami-based pharmaceutical company was well on its way to solving the dilemma, by chartering a plane to fly a shipment of paclitaxel, its generic anti-cancer drug, from Australia, and making other moves to expedite products stalled in Ireland and New York harbor, Frost said.
Earnings still up
Both Frost and Goldman said Ivax's third-quarter earnings will be "substantially higher" than the same quarter a year ago. Third-quarter 2000 earnings were 15 cents a share. Analysts' estimates for third-quarter 2001, which will be reported Oct. 23, range from 26 to 31 cents.
Although Ivax stock bounced back in the week following the sell-off (closing at $22.42 on Tuesday), Ivax has yet to erase the sell-off completely. However, the company took advantage of the steep plunge to buy back 3 million of its own shares � part of a 12.5 million purchasing program Ivax had resumed in August.
"A company should buy back its own shares when it believes its earnings are in a state of accelerated growth," Frost said, noting that the company had nearly equaled year 2000 earnings in the first two quarters of 2001. That continued a pattern of 14 consecutive positive earnings increases that has seen Ivax triple earnings in 1999, at 42 cents, then more than double those at 86 cents in 2000.
"Our confidence is at an all-time high," Frost said in a conference call to shareholders last week, predicting the company will finish 2001 with income from continuing operations a full $100 million ahead of last year's.
"The bottom line is, you're looking at [an earnings] double," said Jeffrey Kraws, an analyst with Gruntal & Co. in New York, who lowered his annual earnings forecast a few cents to $1.18 a share. "This is just a good, solid company."
`Assuaged a lot of panic'
Bob Wasserman, research director for Sterling Financial Investment Group in Boca Raton, said, "The drop and the bounce back were directly related. I think they were surprised by the intensity of the drop."
Several factors are likely behind the volatility. Investors initially may have had overly high expectations about paclitaxel and then reacted to concern about competition for the drug. Then the letter about deliveries was posted, and the overall market was jittery in the aftermath of the Sept. 11 attacks, he said.
Mentioning the conference call, Wasserman said Ivax has now "assuaged a lot of panic." He has followed the company since 1994 and says a price of $27 a share is possible by the time third quarter earnings are reported.
Ivax, which has most of its more than 8,000 employees concentrated in Europe and South America, employs 590 in Florida. The company is based at 4400 Biscayne Blvd. and has manufacturing facilities in the Doral and Golden Glades areas of Miami-Dade County.
Frost, 64, does not believe the far-flung nature of the company makes it vulnerable to interruptions such as the Sept. 11 attacks.
"If anything, we are better off because of the geographic diversity," he said.
News of the expected delays in shipping products from Europe and Australia in the wake of the attacks were exacerbated by the indefinite halt in commercial air travel. That compounded shareholders' fears of increased competitive pressure on sales of paclitaxel, a generic version of Bristol-Myers' anti-cancer drug Taxol. Last October, Ivax won the exclusive right to sell its own generic brand Onxol for six months. By mid-year, other competitors had joined the fray to compete in the $1 billion Taxol market. Sales of the injectable drug accounted for $77 million of Ivax's $302 million second-quarter revenues, or 25 percent, when they were reported in July.
"As expected, when other generic players came in, the pricing of paclitaxel was lowered," Frost said.
However, Frost noted, long-term agreements to suppliers � such as Ivax's multi-year agreement with Novation, the largest hospital supply chain purchaser in the United States � plus other products and deals in the Ivax pipeline, should soften the landing.
One of those deals, the company's acquisition of the largest drug company in Chile, gives Ivax a bigger stake in Latin America. In late August, Ivax acquired Laborotorio Chile � which had $173 million in sales last year, according to Goldman � for cash. When added to other recent pharmaceutical company acquisitions in Mexico and Venezuela, Ivax has a huge market for its drugs.
For a company known for its generic successes, Ivax's future success may rely on drugs it brings to market.
"As we go forward, a disproportionate amount of the growth will come from our brand-name products," Frost said.
Wasserman said while the markets like exclusivity periods on generic drugs, "the market really likes branded products. Typically, branded drugs get higher margins and higher growth than generics."
Ivax is both a top generic and a top brand name company in Great Britain and has the experience and size to launch branded products in Europe, he said.
Kraws said Ivax has 32 generic drugs awaiting FDA approval, and eight branded drugs in late stage clinical trials. The company will spend $90 million this year on research and development of products, Goldman said.
One new proprietary drug is Talampanel, now in clinical trials. The drug, discovered by Ivax researchers in Hungary, is being tested as a possible treatment for multiple sclerosis, epilepsy and Parkinson's disease.
Frost, a dermatologist who once treated patients at Mount Sinai Medical Center, has watched his company's earnings from respiratory systems, like the patented Easi-Breathe inhaler for asthma sufferers, more than double from $90 million in 1999 to a projected $200 million by the end of this year.
One analyst likens the breathing devices, which can deliver a variety of drugs, to Intel's Pentium computer chips, which can power a variety of computers.
Easi-Breathe does not have FDA approval, but is in Phase III clinical trials with at least two different drugs that it delivers, including albuterol, Goldman said. Sales of asthma drugs using Easi-Breathe are mainly in Europe. It is also registered in Latin America.
The company's success has enabled Frost to climb to 279th on the Forbes 400 list of richest people at $920 million. Forbes pegged his net worth at $490 million six years ago. When Frost first made a list, he seemed to barely notice.
"It's important to have your health," Frost joked, refusing to measure success by personal holdings, or the speed of his company's recovery from a blip on the stock chart.
E-mail free-lance writer Charles Flowers at southflorida@bizjournals.com.
Read more: opkodd.proboards.com/thread/3084/course-billionairehood-never-run-smooth?page=1#ixzz4bzp6RipL
MiamianneTransportation delays make Ivax stock woozy
Oct 8, 2001, 12:00am EDT Updated Oct 8, 2001, 12:00am EDT
INDUSTRIES & TAGS Health Care, Banking & Financial Services
SHARE
Order Reprints Save Article Print
Get Miami/Fort Lauderdale Newsletters and Alerts
Morning Edition >> Afternoon Edition >> Breaking News
Charles Flowers
B
Honesty may be the best policy. But when Ivax spokesman Howard Goldman wrote a letter to shareholders Sept. 20, his honest concerns about shipping delays may have triggered the biggest one-day drop in Ivax's stock price this year.
Ivax shares lost 35 percent, falling nearly 10 points in one day to close at $17.90, the 52-week low. Ivax had traded as high as $41 during the same period.
"Apparently, the marketplace took it as an earnings warning, and that caused the drop in share price," said Goldman, who posted the letter four days after major markets resumed trading after the attacks Sept. 11. "By no means was it an earnings warning. Our attempt to update people to the potential transportation issue apparently backfired."
Ivax CEO Phillip Frost blamed an influential analyst, who changed his "buy" recommendation to "hold." But Frost, a medical doctor, refused to take credit for doing the right thing.
"We don't have any choice in the matter," Frost said. "We are law-abiding citizens and we have to practice full disclosure."
Goldman's letter warned, "The recent attacks against America have resulted in some back-up delays and disruption in the worldwide transportation system. While this situation is both temporary and of comparatively little importance in this national tragedy, the company's ability to transport raw materials from overseas suppliers and to ship finished goods worldwide has been impacted somewhat during the third quarter."
As the letter was issued, the Miami-based pharmaceutical company was well on its way to solving the dilemma, by chartering a plane to fly a shipment of paclitaxel, its generic anti-cancer drug, from Australia, and making other moves to expedite products stalled in Ireland and New York harbor, Frost said.
Earnings still up
Both Frost and Goldman said Ivax's third-quarter earnings will be "substantially higher" than the same quarter a year ago. Third-quarter 2000 earnings were 15 cents a share. Analysts' estimates for third-quarter 2001, which will be reported Oct. 23, range from 26 to 31 cents.
Although Ivax stock bounced back in the week following the sell-off (closing at $22.42 on Tuesday), Ivax has yet to erase the sell-off completely. However, the company took advantage of the steep plunge to buy back 3 million of its own shares � part of a 12.5 million purchasing program Ivax had resumed in August.
"A company should buy back its own shares when it believes its earnings are in a state of accelerated growth," Frost said, noting that the company had nearly equaled year 2000 earnings in the first two quarters of 2001. That continued a pattern of 14 consecutive positive earnings increases that has seen Ivax triple earnings in 1999, at 42 cents, then more than double those at 86 cents in 2000.
"Our confidence is at an all-time high," Frost said in a conference call to shareholders last week, predicting the company will finish 2001 with income from continuing operations a full $100 million ahead of last year's.
"The bottom line is, you're looking at [an earnings] double," said Jeffrey Kraws, an analyst with Gruntal & Co. in New York, who lowered his annual earnings forecast a few cents to $1.18 a share. "This is just a good, solid company."
`Assuaged a lot of panic'
Bob Wasserman, research director for Sterling Financial Investment Group in Boca Raton, said, "The drop and the bounce back were directly related. I think they were surprised by the intensity of the drop."
Several factors are likely behind the volatility. Investors initially may have had overly high expectations about paclitaxel and then reacted to concern about competition for the drug. Then the letter about deliveries was posted, and the overall market was jittery in the aftermath of the Sept. 11 attacks, he said.
Mentioning the conference call, Wasserman said Ivax has now "assuaged a lot of panic." He has followed the company since 1994 and says a price of $27 a share is possible by the time third quarter earnings are reported.
Ivax, which has most of its more than 8,000 employees concentrated in Europe and South America, employs 590 in Florida. The company is based at 4400 Biscayne Blvd. and has manufacturing facilities in the Doral and Golden Glades areas of Miami-Dade County.
Frost, 64, does not believe the far-flung nature of the company makes it vulnerable to interruptions such as the Sept. 11 attacks.
"If anything, we are better off because of the geographic diversity," he said.
News of the expected delays in shipping products from Europe and Australia in the wake of the attacks were exacerbated by the indefinite halt in commercial air travel. That compounded shareholders' fears of increased competitive pressure on sales of paclitaxel, a generic version of Bristol-Myers' anti-cancer drug Taxol. Last October, Ivax won the exclusive right to sell its own generic brand Onxol for six months. By mid-year, other competitors had joined the fray to compete in the $1 billion Taxol market. Sales of the injectable drug accounted for $77 million of Ivax's $302 million second-quarter revenues, or 25 percent, when they were reported in July.
"As expected, when other generic players came in, the pricing of paclitaxel was lowered," Frost said.
However, Frost noted, long-term agreements to suppliers � such as Ivax's multi-year agreement with Novation, the largest hospital supply chain purchaser in the United States � plus other products and deals in the Ivax pipeline, should soften the landing.
One of those deals, the company's acquisition of the largest drug company in Chile, gives Ivax a bigger stake in Latin America. In late August, Ivax acquired Laborotorio Chile � which had $173 million in sales last year, according to Goldman � for cash. When added to other recent pharmaceutical company acquisitions in Mexico and Venezuela, Ivax has a huge market for its drugs.
For a company known for its generic successes, Ivax's future success may rely on drugs it brings to market.
"As we go forward, a disproportionate amount of the growth will come from our brand-name products," Frost said.
Wasserman said while the markets like exclusivity periods on generic drugs, "the market really likes branded products. Typically, branded drugs get higher margins and higher growth than generics."
Ivax is both a top generic and a top brand name company in Great Britain and has the experience and size to launch branded products in Europe, he said.
Kraws said Ivax has 32 generic drugs awaiting FDA approval, and eight branded drugs in late stage clinical trials. The company will spend $90 million this year on research and development of products, Goldman said.
One new proprietary drug is Talampanel, now in clinical trials. The drug, discovered by Ivax researchers in Hungary, is being tested as a possible treatment for multiple sclerosis, epilepsy and Parkinson's disease.
Frost, a dermatologist who once treated patients at Mount Sinai Medical Center, has watched his company's earnings from respiratory systems, like the patented Easi-Breathe inhaler for asthma sufferers, more than double from $90 million in 1999 to a projected $200 million by the end of this year.
One analyst likens the breathing devices, which can deliver a variety of drugs, to Intel's Pentium computer chips, which can power a variety of computers.
Easi-Breathe does not have FDA approval, but is in Phase III clinical trials with at least two different drugs that it delivers, including albuterol, Goldman said. Sales of asthma drugs using Easi-Breathe are mainly in Europe. It is also registered in Latin America.
The company's success has enabled Frost to climb to 279th on the Forbes 400 list of richest people at $920 million. Forbes pegged his net worth at $490 million six years ago. When Frost first made a list, he seemed to barely notice.
"It's important to have your health," Frost joked, refusing to measure success by personal holdings, or the speed of his company's recovery from a blip on the stock chart.
E-mail free-lance writer Charles Flowers at southflorida@bizjournals.com.
Read more: opkodd.proboards.com/thread/3084/course-billionairehood-never-run-smooth?page=1#ixzz4bzp6RipL
