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Here's What We Want To Know From The Elite Pharmaceuticals Inc (OTCMKTS:ELTP) Conference Call

Here's What We Want To Know From The Elite Pharmaceuticals Inc (OTCMKTS:ELTP) Conference Call
Written by
Chris Sandburg
Published on
June 15, 2017
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Elite Pharmaceuticals Inc (OTCMKTS:ELTP) just put out financials for the fiscal year ended March 31, 2017. The company is up a couple of percentage points on the release, but it looks as though markets are waiting for a conference call to take place before taking a position on the numbers.The conference call is set to take place mid-afternoon EDT on Thursday, so there’s plenty of time for shares to trade hands ahead of the call. We’re going to be listening in, so here’s what we’re focusing on and what we want to see from Hakim and his team come call time.For those new to Elite, the company is a biotechnology company that we have come back to him quite a few occasions year to date. It's primarily a generics drug manufacturer and seller but also has a development pipeline that, while rocky to date, provides real potential for long-term upside reevaluation if the company can get on top of the issues it has faced.There are three things we really want management to address on the upcoming call.The first is to reaffirm the release date for the bioequivalence study of Elite’s SequestOx asset, which is an abuse-deterrent opioid candidate. This is a drug that has suffered numerous setbacks along its development pathway but has one or two last hurdles to clear before finally hitting shelves. Management previously stated that the bioequivalence study (which should go a long way towards resolving the FDA's concerns) should read out in July. We anticipate some loading ahead of this readout (the company will run if it is positive news) and would like to get confirmation that the July release is still on the cards.Next, we'd like to see the company highlight the recorded decline in revenues as being (partly) due to a one-time nonrecurring item (a milestone payment related to the above discussed SequestOx) of $2.5 million back in 2016. As the numbers show currently, revenue declined from around $12.5 million to $9.6 million. As a headline, that looks pretty disappointing. Remove the nonrecurring item, however, and things even up a little. This is mentioned briefly in the release we've already got, but we feel it needs reiterating to avoid any market misinterpretation.Finally, we want to know what is happening with a couple of already filed ANDAs that – as yet – the company is yet to receive a response on. Specifically, these are a generic Percocet and a generic Norco. These are blockbuster ANDAs and were submitted in August and December respectively last year. We’d like to get some idea of when these are expected to resolve.Cash on hand right now is reportedly enough to carry through to the end of March next year, while also being sufficient for a commercial launch of SequestOx if and when it’s approved. With that said, there’s a financing agreement in place that could see the company issue to raise up to $40 million from Lincoln Park over the next 35 or so months (36 months from June 5). As an added extra, then, we’d like Elite to reiterate its expected capital expenditures during the coming twelve months (and ideally, put an outer expected limit on the resources that will be allocated to a SequestOx launch) so as we can form expectations surrounding potential dilution near term.As per the latest release, R&D spend is down, which for us, is a good thing. It’s now all about these assets funneling through from dev stage to commercialization and contributing to topline.Keep in mind that there’s a good chance this one will dip straight into the call. Regardless of the underlying activity, management is reporting a decline in revenues and a deepening net loss. If we do see the dip, however, it may be an opportunity to pick up some discounted shares ahead of an explanation driven (and heading into July, a data driven) recovery.We recommend readers catch up on our previous coverage ahead of the call. You can do so here.We will be updating our subscribers as soon as we know more. For the latest updates on ELTP, sign up below!Disclosure: We have NO position in ELTP and have NOT been compensated for this article.

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