again - want to caution the difference between what stock price might do next 3-6 months and reality of what is happening on payer front and with actual sales…they should be correlated but life is never that simple.
On Jeffries conf call yesterday, a short 20-25 min, mostly recapping the expanded label news, and how their Japan partner Otsuka also received positive trial news, but the biggest takeaway was that 9 payers have adjusted their UM or Utilization Mgmt criteria. This means coverage has been adjusted, and in this case always in a good way. The Nexletol and Nexlizet drugs have been moved up to Tier1/2 status, depending on how those payers grade things…both are ideal. Then they also have been removing the need for PA or prior authorization, which is like needing a cardiologist approval in addition to your general physician, to get a prescription.
So the barriers to entry, and corresponding cost, of the drugs is going down.
Major players like Aetna appear to be part of the 9 payers that have made these adjustments, and on the call they stated that (7) of those happened just this week. (start of June)
Ok.
So we know Q1 sales were decently up y/y, but that was before any real impact from the label change, which happened near end of March.
During Q2, apparently scripts have been up y/y in 6 out of the 7 weeks thus far, and the way scripts are measured they don’t include this discount program thru ASPN (sounds sort of like a GoodRX type of thing). And on the conf call they mentioned good growth via ASPN and that it was “not an insignificant amount of scripts”.
So we are seeing script growth in April + May.
Now in June, the payers are joining the party.
We can make the assumption, or at least I will, that June should be the start of an inflection point. Remains to be seen how much Q2 numbers will be up y/y and Q/Q, but odds seem to be getting higher every day.
Again - the stock price seems gun shy…this company underperformed since 2020 when it tried to hype an early but very LIMITED label it received. Sort of like open a pizza place but only having the ingredients for the crust.
The stock price chart looks horrid over past 5 years, but realize that company had to dilute to stay financially above water, and they have 10x the number of shares. So $2 today is about $20 three years ago.
At near $2.50 share now, they are roughly $500m mkt cap.
When you start thinking about buyouts, you have to come up with your own exit price and napkin math. Do you think they would be bought for $1b, $2b, $3b, etc… If no further dilution, and they are flush with cash at moment, but do have some capital issues to work thru over next 6-9 months, then $15 stock price = $3b mkt cap buyout.
Split the difference and you are at $7.50 for $1.5b buyout, or a 3x from here.
Stock is about to hit/start hyper-growth.
I am just a guy on the internet, so do your own DD…but I think the Aug ER should show the modest uptick (mainly thanks to what should be a robust June) and then Nov ER should be first full Q with a good payer backdrop and the hockey stick should start materializing in scripts/rev.
Or you could hope NVIDIA doubles again from $3T to $6T market cap, I suppose.
Dreamer
