Value Investing Brian Feroldi: Using Checklists To Find Compounders

Brian Feroldi: Using Checklists To Find Compounders
Quick Take on Xeris Pharma (XERS)
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Brian Feroldi: Using Checklists To Find Compounders

Posted: 14 Aug 2020 03:33 AM PDT

submitted by /u/themarketplunger
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Posted: 13 Aug 2020 06:28 PM PDT

Disclaimer: I am LONG equity. Please do due diligence. This is based off of 60 minutes of quick analysis.

Company Overview

Xeris is a spec pharma company founded in 2005. Their primary scope of work involves developed injectable and infusible drugs.

2019-Present: Product Launch

Their first product was approved in September 2019, called Gvoke. It is a PFS and auto-injector that has glucagon, to treat severe hypoglycemia. This is market as two different products: Gvoke PFS (Nov 2019) and Gvoke HypoPen (July 2020).

Gvoke Hypopen

Competition

Primary competition comes from tradition glucagon kits and Eli Lilly's BAQSIMI.

BAQSIMI is delivered via the Nasal passage. Legacy kits are traditional syringe injections. Xeris has the advantage with both a PFS and auto-injector, which traditionally are well received with patients.

BAQSIMI

Legacy Kit

Financials

The most popular product will most likely be the two-pack hypopen (auto-injector). This carries an AWP of $673.92. For adults, the prescription is 1mg/0.2mL. (BAQSIMI cost is similar with 3 mg dosage, and legacy kits from LLY cost ~$280/kit)

Gvoke Micromedex

One overhang with Xeris' financials is their long-term debt, which has increased from $58.3M YE19 to $109.5M 2Q20. However, principal payments do not start until 2022, and interest expenses should be below $10M for the year. Xeris should be generating enough FCF over the next two years to service their debt.

Valuation Takeaways

· Peak sales of ~$250M

· WACC @ 11%

· Positive EBITDA by 2026

DCF

Price Target

submitted by /u/discounted_cash_flow
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Online Lending: The Good, the Bad and the Ugly

Posted: 13 Aug 2020 09:24 PM PDT

submitted by /u/ilikepancakez
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JCapital Research - Short Thesis on Starr Surgical

Posted: 14 Aug 2020 01:22 AM PDT