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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Hello team. I currently have a small position in Antibe Therapeutics and considering adding more. This is a stage 2 drug company. No profit and sales really that tie in to the real story of the drug being created at the moment. Essentially they are trying to create a pain medication that will compete with the likes of Advil/Tylenol without the negative side effects of damaging the stomach lining and creating ulcers. The most interesting component is that amount of activity of old Paladin Labs/ new Knight Therapeutics people moving in and out of the company, setting up acquisitions and financing deals. Considering you guys cover Knight I was wondering if you had any further analysis or information on Antibe or the financing deals that Knight puts together? Or perhaps you could criticize or add to my qualitative analysis for other areas I should be concerned about?

Pros:
From what I can tell it's the only other company that Johnathan Goodman holds a position in besides Knight.
In the 50% region of insider ownership.
The fact they acquired a sales force shows confidence.

Cons:
One patient got something similar to Jondis, this forced the company back to the drawing board. If the product is not considered safer than Advil, it will have a hard time selling.
Further dilution will have to occur to proceed in product testing.
Read Answer Asked by Liam on July 25, 2016
Q: While I realize that no one has a crystal ball, do you have any thoughts regarding the possible timing of a possible sale of the company or, if not, a decision not to sell for that matter? I wondered if it might be around the next quarters(August 12 ) results when there may be a better understanding of the impact of Brexit on the company's finances. Or do you think that this might require another quarter or so to sort itself out? Any thoughts on the probability of a sale actually happening? At this time the market seems to be discounting any potential sale!
Read Answer Asked by John on July 25, 2016
Q: I am wondering what would be a normal p/e for Concordia? Also perhaps you can shed some light on the difference between cash flow and levered free cash flow.I understood the latter represented the cash left over after debt obligations have been paid. With their substantial debt I expected Concordia's levered cash low to be substantially less and yet Yahoo Finance shows cash flow per share of $4.10 and levered at $6.55.
As always your assistance is greatly appreciated.
Mike
Read Answer Asked by michael on July 22, 2016
Q: Hi, in follow up to my previous question, what are your thoughts on these three possible additions to my TFSA. Again, in your view which two have the biggest up side potential for the next year or two? Thanks
Read Answer Asked by Henry on July 19, 2016
Q: CXR has lots of headwinds (brexit, pricing environment, debt levels, questions about their business model, etc). if debt level is one of the biggest headwinds the company faces, and current cash flow will take years to pay down debt, is it possible the company issues shares, even at this really reduced price, to pay down debt?
Read Answer Asked by Richard on July 18, 2016
Q: I am puzzled by this company. Other than their SG&A being too high the company seems, on the surface, to be improving. They had a major fire at their plant in PQ which created a supply issue with regards their customer base but that has been resolved. They had some problems with a few other countries trying to ignore their IP but that has pretty much resolved. There are only two countries that can sell their product (krill oil) into China and Canada is one of them. They just announced their first quarter results as below;
Revenues reached $11.3 million, up 270% versus last year
• Gross margin on sales rose to 30.5%
• Nutraceutical segment generated positive Adjusted EBITDA of $1.1 million compared to a loss of $3.2 million a year ago
• Completed first sale in Chinese market and of MaxSimil® in July
• Cash balance of $5 million
• Revised Revenues guidance from $41 to $43 million
I have my opinion on this company but I would appreciate your perspective.

Thanks
Pat Sherman
Read Answer Asked by Patrick on July 13, 2016
Q: I recently sold a small position in CZO after the run up and their announcement today. I did not like the private placement doubling while simultaneously lower the strike price on warrants to $1.50... I thought the previously sized raise and terms were very strategic but now I think there could easily be some cash over hang and general selling pressure with the raise and warrants priced much lower. Do you share this view? What do you think is a decent re-entry point for a higher risk investor?
Thanks
Read Answer Asked by Scott on July 12, 2016
Q: Wondering your opinion on recent news about MPH -- FDA seems to want more information on their drug application. From what I can gather this seems to be a bump in the road from which MPH can recover. Do you think this development is enough to change fundamentals? Would this trigger a sell for you on a longer term hold?
Read Answer Asked by JONAS on July 11, 2016
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