8K Logal getting a raise and a bonus

I doubt OPKO is taken out for $20 any time soon. I picked it because it was to high, and obviously theoretical. It does raise an interesting question though, "What is OPKO worth in a take out today?" Thoughts?

I understand it is unlikely that Frost will agree to a sale and most buyers would not be interested in the company as a whole. As you stated, "A sale of the parts, as I suggested recently, would be the only way to even approach double digits. Do the math." What is that math?  BRL $5? Rayaldee $2? Somatrogon $3, and the rest $1?

It was a bit of a rhetorical statement. Perhaps one set of reference data would be the treatise put out by Sian. I really have only generic guesses.

BRLI: Right now, with COVID tailwinds, the lab is maybe making $100mm net profit per year. MAYBE that's worth $2 billion, which is $3.00. The problem here is what I've been pointing out about operating leverage, or the lack of it. Take LH as an example: Q3 eps (when covid testing really kicked into gear) were 3.25X Q2 eps. That's leverage. Whereas OPK's eps Q3 vs Q2 actually went DOWN a penny (-20%; 4c vs 5c) despite revenues increasing 40%.

Rayaldee: sales actually increased in 2020 vs 2019 by 17%, but the total amount is still only ~$37 million. Is the domestic market worth 20x sales? That's about $1.00/share. Is the bloated share count argument sinking in yet? How it absolutely causes a neutron start-like gravity well around the EPS value?

Rayaldee milestones and royalty stream. Well for insight on the latter, let's go to the videotape:
On Aug 4, 2019 Alex posted these projected sales figures from Vifor (analysts consensus presentation) for Rayaldee:

ANALYST CONSENSUS SALES AND EARNINGS:
H1 2019-0.8 mil
2019-3.5 mil.
2020-17.1 mil
2021-39.2 mil
2022-66.2 mil
2023- 90.9 mil

To which Opkotunist replied: "Is it just me or do the numbers keep getting smaller and pushed further down the road? Like a lot smaller, i thought vifor forecasted Rayaldee sales of 120 MM in 2021, now they’re 1/3 of that."

Now, I just found this, from February 2021: www.viforpharma.com/sites/vifor-corp/files/Vifor%20Pharma%20Analyst%20Consensus%20Presentation_February%202021.pdf
On page 2, Rayaldee's numbers now look like this, with the small print proviso: "Consensus figures were computed using the average of the sales and earnings forecasts provided by Credit Suisse, Goldman Sachs, J.P. Morgan, Kepler, Mirabaud, Octavian, Research Partners, Stifel and UBS"

2020: 1.6 mil
2021: 10 mil
2022: 25.4 mil
2023: 42.5 mil
2024: 57.1 mil

Do you notice a trend in the consensus sales estimates over the years? Between 2019 and 2021? Just a guess, but the analysts are probably looking at the lackluster U.S. sales and extrapolating.

So, even being very generous and saying that Vifor will generate $500 million in revenue for Rayaldee over the next ten years, that's what....MAYBE $75-100 million in royalties for Opko over the next decade? At this rate, the milestones will have a greater net present value than the future royalty stream. Net net....maybe $2/share for Rayaldee? Which would be $1.34 billion. I really hope you are starting to understand how the effect of large numbers of shares severely depress the value per share of the respective assets.

Somatrogon: at a value of $2billion, that's $3/share


So where are we? $8 bucks......and we're running out of assets. If Frost would have a moment like Saul on the road to Damascus, and would separate GeneDx, at least as a pro forma financial entity, maybe we get to $10 or $11.


Which, after a dozen years in business, is pathetic.

And don't forget to be honest with your self and assign a modest 7% annual return to the initial investment to capture some glimmer of lost "opportunity" cost.

And while your at it, throw in for good measure the "pain and suffering" it has caused...

I'd rather the company go bankrupt than do a reverse split. It would be a more merciful death. And I've certainly never ever advocated for such a path to a smaller share count. In the past here, I've expressed the opinion that the company needs to grow into its outsized capital structure. Or, more simply, the company needs to grow. A lot. Indeed that has happened over the past year, but we really have no idea what the trajectory of the base testing business looks like. Cohen was just hitting his stride with partnerships when COVID hit. If those efforts don't turn into significant revenue, and profits, and it merely grows mid/maybe high single digits, then they might have no choice but to sell it. But they would absolutely require a CEO who knows what she/he is doing to deploy the proceeds in the best ways that would address both the cap structure and the remaining businesses.

I read that...but I assumed it had to do with the wage discrimination stuff that was in the news last fall about paying Asian Phlebotomists less than white.

I hope there is no truth to it, as in MOST cases, it has to do with education, training, and experience. But if you are on the losing end of the stick, you are going to use any and all available tools to get what you want.

Maybe this is the real reason Rulfo left...Which, by the way, he still hasn't updated his LinkdIN for his new assignment...