Cipher Pharmeuticals (CPH-T)

This is a specialty pharma company. They have been focused on dermatology products, the lead being Absorbica. He’s excited by their development pipeline. They bought the Canadian assets of Cardiome and have successfully integrated them. This came with tax losses along with the pipelines. Together, they help make Cipher incredibly cheap at its current price. There was an issue with inventory of their US partner, but that has now been resolved. He expects the recovery to show good earnings momentum for the back half of this year, then the release of new products. The company has dropped from $18--it was caught up in the run-up of prescription prices (Valeant) and then the run-down. While their prices were high, they tried to get into the US in a big way, and that failed. That cost them about $10 million and hurt their share price, but that failure is long past. He likes it a lot at its current price. (Analysts’ price target is $6.06)

(A Top Pick March 26, 2018. Down 16%). This initially popped higher but they preannounced a poor quarter because the market had been stuffed by a promotion. This quarter will be a little weak for the same reason but after that, it will do better. Cipher historically focused on dermatology. With their purchase of Cardiome Pharma Corp’s Canadian assets, they will now also be focused on arrhythmia and other cardiovascular conditions addressed by Cordiome’s drugs. He loves Cipher here. He thinks it is trading at half what specialty pharma companies, like Knight, sell for. He sees this as a good takeover target for Knight and sees it as a potential double.

This company has been beaten down recently due to a current takeover project and he feels there has been one shareholder putting pressure on the stock. He has been buying more and would buy more.

The chart is not looking good. The one thing that can be said is that it has come back to its support level. But right now it is still in a downward trend and underperforming the market. Momentum is negative. He would look elsewhere.

A little bit early. They have built up their sales force pretty significantly over the last 6 months, so costs are higher and margins have come down quite a bit. That will continue over the next 2-3 quarters until the drugs start to gain traction. He would look to Buy once the new drug starts to gain traction.

They are building a big range of products. Thinks this is a good one.

A very lively bunch of managers who are putting on a very impressive range of productive products in the Pharma area with a pipeline of development situations. This should continue to do very well. The more products it gathers in, the more it averts a single catastrophe.

Attended a talk and was very impressed with the rack of products that they have in the pipeline. Thinks it could be very interesting in the future. He likes this.

Has avoided smaller pharmaceutical companies because he wears a hat as a generalist and couldn’t see the advantage he had of looking at a pharmaceutical name. Until a company gets to a specific scale where it is not taking as much drug specific risk, he would be very cautious about these names.