Knight Therapeutics (GUD.TO)

Great company. Well-managed. Very well capitalized. Lots of cash, but not a lot of earnings in the pipeline in the short term. Ultimately to get this stock lifted out of the $6-$8 range it has to have some earnings that are going to kick in. If this company were ever going to become a hostile raider, there is a lot of stuff in the Pharma space that is on sale. He would love to see this company take a run at some of these bombed out stocks. They have the balance sheet to do it, but he doesn’t know that that is their style. Let the company mature a little bit more and revisit it in 12-18 months.

Very well known management and is the only thesis right now because the company is very early in its genesis. The X-team is from Paladin, which was sold for a multibillion dollars a few years ago. Management took a couple of products and went out and raised a bucket load of money. Had more than $400 million in cash. With all that cash, they are making deals to feed the future. They are doing licensing deals and some finance deals, where if you are a small biotech company they are lending you money and getting access to your products because of that. They are going to know your products intimately because of that relationship. Have done quite a few deals and the market cap is in the $700 million range, so they still have $400 million in cash. Insiders own 30% of the company. For those who just can’t stand the gyrations of some of the other biotechs, here is a stock where that cash supports the valuation.

This is his long term play. Very good management. This is one you have to be patient with. A great, long term hold.

Small healthcare company. Started by the same gentleman that ran Paladin Labs. He had a major accident and sold out and is starting again. The stock is starting to trend. Ron Meisels owns it and wants to be there. He thinks it looks good. Major support of the stock around $7. He believes it is an excellent buying opportunity.

Has $500 million in cash in a $600 million market cap company. Johnson Goodman is a very careful acquirer and wants to buy things very inexpensively. Thinks it is going to take him a long, long time to deploy the capital. They have all this cash, but in order for the stock to lift beyond its Book Value, it has to ultimately convert into earnings. He doesn’t see their earnings coming anywhere in the short term.

He is positive on a very long-term progress of them. In the short term, it has been hit by the summer doldrums and the proliferation of many other companies in the Pharma space. You have to view this as long term.

It is getting down to its cash level. You are paying for a good management team that owns a lot of stock and not paying much more for them in a volatile sector. The management team knows exactly what they are doing. They should reward shareholders nicely over the next ten years.

They are a consolidator of businesses. Their management has a good track record even though they have not done a lot of deals in this company. The stock has come off because some of these other companies in the sector have done deals. He would prefer VRX-T.

Had owned this in the past. If you believe in Jonathan Goodman, he has a phenomenal track record at Paladin. He is going to build a lot of value and is a large shareholder himself. In the short term he has a lot of cash, and people get nervous about what he is going to do with it. A bit of a black box at this time. However, some of the deals he has made so far have been phenomenally successful. Thinks the stock will go higher over time. His preference would be Concordia (CXR-T) or Merus (MSL-T), which have better opportunities. This is one he watches and would trade around. If he got a little bit cheaper he would probably buy it.

This is a very long-term positioning for an investor. He would buy it anywhere below $10. Excellent company to buy for the long-term. Good management.

The biotech sector is on fire. You can’t open a newspaper without seeing a new takeover each day. This is the management team from Paladin Labs. They sold that and spun out this company and then went out and raised a lot of money through shareholders. Have now started to acquire products. This company needs a 5 year timeframe. From a management view in healthcare, he would rather bet on this management team that almost anybody else in Canada. Put it to bed for 5 years and you should be alright.

They have a lot of cash. They put their cash into a deal and recycle the money. They get a bunch of warrants or shares and help the company pay the loan back. They sit on what could be an explosive opportunity if some of their big holdings do well. If they convince analysts they have a portfolio of companies that are going to do well, this stock will do well.

Had owned this until it started to get up into nosebleed territory. Have a lot of cash on the balance sheet and it is a company that is hard to value.

This company was founded by the CEO of Paladin Labs. He raised money on 3 different financings. This is a company that is investing in private equity healthcare funds in Canada and the US. They are also acquiring certain drugs from companies. It is hard to value because it still has a lot of cash on the balance sheet that they haven’t deployed. The institutional community is backing him because of his track record. She has a small position.

Base building until fall 2014 and then a breakout. There could be some more downside. He prefers to buy 5 names or the index.