I just accidentally bumped into some old trade data for HZNP, and had to gulp when I saw the current price is $22.45. I sold in July for $9.25 after insurance companies started denying one of their main drugs.
Not complaining at all, happy with my portfolio performance this year, but wow. Maybe there is something to be learned there. I will read into it more over the weekend.
I just accidentally bumped into some old trade data for HZNP, and had to gulp when I saw the current price is $22.45. I sold in July for $9.25 after insurance companies started denying one of their main drugs.
Hi Chris, I’d love to hear what you find out. I sold out in July also. Here are the notes I wrote to myself:
July 2014 - Duexis and Vimovo will be removed from formularies by Express Scripts and CVS Caremark on January 1, 2015.
Additional health care plans will probably follow their example, which casts a major shadow of doubt on Horizon’s future prospects. I sold out.
I haven’t paid attention to it since.
Saul
I just accidentally bumped into some old trade data for HZNP, and had to gulp when I saw the current price is $22.45. I sold in July for $9.25 after insurance companies started denying one of their main drugs.
Chris, by the way, with HZNP (as with ZLTQ that I just commented on) there’s a certain sleaze factor, or discomfort factor. HZNP’s meds are combinations of cheap non-steroidal anti-inflammatories like ibuprofen, combined with cheap over-the-counter stomach protectors like ranitidine and omeprazole, all generics. Then they charge huge amounts for the combination medicine (which people could easily take as two cheap generic over-the-counter meds).
HZNP’s investor stuff is all about how good their marketing is, and how they are convincing doctors to prescribe these overpriced meds, not about how effective they are. With a whole universe of great companies out there, is this really where I want to put my money?
Saul
I can’t believe doctors (and I am one) prescribe this stuff in good faith. I could not hold the stock.
The marketing is basically that if there are even a few people who can’t take their meds correctly and so get an ulcer, that the cost is worth it.
I saw one lady on on of these meds and she was paying 150$/month for it she said. It is Pepcid and Advil, both on counter for probably 25c/day. She didn’t even know. So either she didn’t understand, or wasn’t told. I guess the doc’s argument would be that if one ulcer is prevented by avoiding confusion, that the cost of that is more than the meds.
It’s crazy, and it is not durable.
thank you Saul, “with a whole universe of great companies out there, is this really where i want to put my money.” amen and amen.
I’ve been following for awhile and i appreciate this thread, your thoughts and the thoughts of the rest of the crew.
Gator, what this reminds me of, obliquely is that twice in the last two years I have been “offered” a drug which was on the order of $400 a month, but which came with a little flyer which promised to make the first month free. The fine print meant that anyone on any form of Medicare didn’t qualify for the offer. The first time it was a experiment for a persistent cough, so I “coughed” up the money since it was only supposed to be for a month to see if it worked. It didn’t, so I didn’t have to worry about paying for it if it cured the problem. The second time was cardic related, but after the prior experience I looked for the Medicare exclusion and pointed out to the doctor that this would really be very expensive … $3-400 after what the Medicare Advantage plan covered. He switched to something else much more reasonable.
More than super high charges for things like the Hep-C drugs, this kind of stuff is an area where I question not only the ethics of the drug companies, but of the doctors. There has to be an incentive to the doctors to push this kind of stuff.
Just following up as I said I would with why the share price has increased so much.
Mainly, it's due to making a consistent profit now and increased guidance.
Adj EPS:
Q1 Q2 Q3 Q4
2012 -.85 -.62 -.39 -.34
2013 -.30 -.24 -.03 -.22
2014 .13 .21 .32 .27
Revenue is up about 15X in 2 years.
2012 23m
2013 103m
2014 337m
Duexis famotidine + ibuprofen 25% of company revenues
Vimovo espmeprazole + naproxen 20% of company revenues
Actimmune interferon gamma-1b 40% of company revenues