Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
to look forward to. This will take us to about November during which time the US listing will (in my opinion) have been approved. This period also covers half-year results in July and 3rd Q results in October. Given the shocking rise in deaths due to opioids in the USA there is an obvious ongoing & urgent demand for INDV's products & that will be reflected in the figures.
Recent news article (May 2022) excerpt: "US overdose deaths in 2021, a record year for such fatalities with an estimated 107,622, the US Centers for Disease Control and Prevention (CDC) said on Wednesday. It was an increase of 15% from the previous year, which was also a record. The US has now passed 1m overdose deaths since the CDC began collecting data about two decades ago. The surge in deaths in 2021 was fueled primarily by fentanyl, a highly dangerous synthetic opioid that accounted for about 70% of fatalities." Fentanyl, according to the Centers for Disease Control and Prevention, is up to 100 times more potent than morphine and many times that of heroin.
But now a new product is being pushed on US streets using Carfentanil. Carfentanil is a synthetic opioid approximately 10,000 times more potent than morphine and 100 times more potent than fentanyl...
Biden is strongly supporting measures to battle the opioid epidemic and that will mean that INDV's slow release treatment SUBLOCADE will increasingly be in demand to manage the addiction.
Webcast included date when share buyback starts which is 3 May (next Tuesday). At current SP this will equate to approx. 25M shares being purchased although will be much less than this as the SP moves North.
Well worth listening to webcast which is on the INDV website. The management team are very bullish & see significant growth over the coming periods and refer to new product development as well as M&A activity to broaden product range next year (possibly 2023).
I calculated a forecast SP based on the following approximates: Earnings £180M, shares in issue (following imminent buyback) 685M and a multiple of 25 (average sector multiple is high teens, my view is that a higher rating is applicable to INDV due to its position in the market & growth potential) gives a price of £6.57.
Net cash is about £600m which translates into £0.88 / share based on 685M shares.
Given the webcast & if earnings are going to be nearer £200M+ then forecast SP is £7.30. We also have a very possible US listing later this year.
Any potential big PHARMA interest will only add further momentum to the SP.
SP currently £3.29.
Crossley comments that changes to BMAT (SUBLOCADE's market) access in USA are giving much greater opportunities for SUBLOCADE:
"As a result, there is increasing patient access to BMAT. Indivior supports efforts to encourage more eligible healthcare practitioners (HCPs) to provide BMAT, and the Group continues to resource its compliance capabilities for the growing number of BMAT prescribers and patients.
The Group's focus is to continue to expand access to SUBLOCADE amongst OHS and core HCPs to ensure availability of this potentially important treatment option to the estimated 1 million+ patients per month who are prescribed BMAT by HCP."
The opioid epidemic is getting worse in the US and INDV's leading position in the market gives it a tremendous opportunity to continue to make SUBLOCADE the premier weapon to fight opioid addiction.
This will both underpin & expand sales growth & profit for INDV.
The Buyback will motor the SP North over the coming weeks & months & US listing (which I believe will go ahead) will also fuel the rise.
Whilst PFC is so grossly under-valued it will always be at risk to a take-over. It would make perfect sense for Wood to be interested. However, given the number & size of new contracts about to drop I don't think Asfari would be interested. For him to even countenance an approach at this stage of PFC's return to a SP that reflects "true" value it would need to be well North of £5 (& rightly so in my opinion). Meanwhile Asfari will be happy seeing the SP continue to climb in leaps & bounds. As LTH's will know, PFC's SP can move very rapidly at the best of times when news drops. Given its starting from a very low point, this will be even more so.
Crossley's comments in July 2021 when initiating $100m share buy-back programme & commitment to returning capital to shareholders :
"In light of Indivior's business outlook in 2021 and beyond, and supported by our strong balance sheet, we will be initiating a $100m share buyback programme," he confirmed.
"This programme underscores our disciplined approach to capital allocation and appropriately balances returning capital to shareholders with maintaining our ability to execute our patient-focused strategy."
Results due for Q1 on April 25th, US listing and possibility of another $100m share buyback or re-commencing dividend payments would all be reasons why the SP would be gaining traction. I think the results will be very good. But I also think that cannot rule out big pharma interest.
Strong buying on Friday and today is lifting the SP. A long way to go yet before SP starts to reflect "true value" which IMO currently is well North of £2. Maybe the timing of the rise in SP is reflective of imminent news of large contract wins? We shall see but what is not in question is that PFC is grossly under-valued currently & is an absolute bargain.
Thanks for the prompt mythyaar. Still heavily invested and my largest holding. I believe that we are only a short way into the re-rate of INDV. US listing will be a big catalyst to the SP and the opioid epidemic is not going away, in fact the problem is increasing. The first quarter figures due 28th April should be very good & could include either a share buyback (my preferred) or dividend. As previously mentioned, INDV must also be a target for big pharma. Its a market leader in a growth industry and the SP is still lagging way behind where it should be. IMO £6-£7 would be fair now but that could well be eclipsed by the April 28th update.
I've been spending a lot of my BB time recently on PFC which is a carbon copy of INDV given that it was dragged down by legal problems (UK SFO enquiry). PFC got a very good deal with SFO (as INDV did with US DoJ). Its 1 of the market leaders in a growth industry and with a SP that mirrors INDV's SP of 2 years ago i.e. a fraction of where it should be. My view is that PFC should be currently £2+ and when the inevitable large multi-billion£ contracts start to drop (which could be any time) it will be heading back to £6, £7, £8+. PFC also historically pays excellent dividends so when dividends are re-instated (possibly from 2023) there will be an income stream alongside capital growth. PFC is up 5% today but is still at bargain basement price.
The main driver for the SP will be contract wins. These can drop at any time & given the urgency now for energy I don't think we will have to wait too long. PFC are 1 of the market-leading companies in their field but are still being valued as though the SFO have yet to complete their enquiry. The SP is screaming to be re-rated & the trigger will be news of a large, new contract win. Maybe that will be tomorrow or next week or next month...?? But I do think it will be sooner rather than later.
Just further increased the holding in my ISA. The SP will soon turn North and carry on in that direction. PFC promises both significant capital appreciation from current SP & dividends & is a leading company in a growth industry. Ticks all the boxes.
"Petrofac, a leading provider of services to the global energy industry, has been awarded a major decommissioning contract by the Australian Government, heralding the start of an era of decommissioning in the nation's offshore oil and gas sector."
Do not under-estimate the importance of this contract win. This is only Phase 1 and PFC are now in pole position to continue winning many new contracts in Australia. This needs to be added to all the other contract opportunities coming up in NAfrica, Middle East, North Sea etc
PFC's SP will be driven by contract wins (see today's quote from an analyst): "Petrofac can bid on $37bn worth of projects being awarded by the end of 2022, Hoy noted, and with an "impressive" win rate so far, she said there could be a "marked increase" in next year's order book."
These can come at any time & I believe that news of them will come sooner rather than later. Meanwhile the SP is perversely reflective of a company that is still under SFO investigation & is still barred from quoting for new ADNOC contracts. Given that both of these are exactly the opposite of reality there is an amazing opportunity to buy at this bargain-basement SP. When the positive contract news starts flowing in the SP will fly and further down the line the return to dividends will generate additional significant upside.
One of the most basic laws of investing is to buy "cheap" shares. PFC is a very cheap share currently and when it eventually moves North it will be huge. PFC are also superbly positioned to benefit from the energy fall-out following Russia's actions in Ukraine.
Thought it worthwhile reminding investors of PFC potential. This thread was started about 2 months ago and the basic information/advice still holds true. Approx. £1.07 is an absolute steal of a price for PFC.
But on the flip side its a great price to buy currently. The shares from the recent capital raise will still be churning through but results on 15th March and details of any major contract wins will give the SP a serious lift.
These synthetic opioid drugs called Nitazenes are up to 20x stronger than Fentanyl which is itself 50x stronger than heroin. This may form part of the reasoning behind moving to a more social than criminal basis for battling the opioid addiction epidemic given the highly addictive nature of this new variant. Nitazenes are very easy & cheap to make in very large batches by drug gangs and generate very high returns. Supply of synthetic opioids is basically a high growth & very lucrative market for drug gangs.
Read full article at link below:
https://www.healthline.com/health-news/new-opioids-called-nitazenes-may-be-20-times-stronger-than-fentanyl#Danger-of-synthetic-opioids