Pernix Therapeutics Holdings Inc (NASDAQ: PTX)
Pernix Therapeutics Holdings is having a rough day in the market, giving up all of the recent gains we’ve seen and then some. However, regardless of the declines, there are still plenty of bulls out there waiting to pick this thing up at a discount. Today, we’ll talk about why PTX has struggled in the past, what’s changed, and why bulls are buying the dips and happy to do so.
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PTX Has Struggled – There’s No Question!
There’s no question about it, the bears are bears for a good reason. The truth is that Pernix Therapeutics has done an incredible job when it comes to medical innovation. The company has come up with great products, and brought those products to the market. However, sales isn’t the company’s strong suit.
At the end of the day, a company with great products is nothing if it can’t seem to sell its products. That’s exactly what happened with PTX. The company had a great product lineup, a great pipeline, but the sales process was full of redundancies, leading to poor results. Nonetheless, this is changing in a big way.
What Has Changed?
The biggest change that turned many bullish on the stock had to do with the CEO. It was clear that the previous CEO at PTX simply wasn’t doing his job. Whether he blew off the work or simply was incapable of making the business work, something was missing. So naturally, investors pushed for a resignation and got what they wanted.
This left a void. Now we had a great company with no permanent CEO. However, that problem has been solved as well. Early this year, Pernix Therapeutics announced that it had brought John Sedor on board as the new CEO of the company.
Sedor Turned Things Inside Out And Fixed Them
When Sedor came on board at PTX, there was a bunch of work to do, and he knew it. However, instead of hoping that the problems would fix themselves, he rolled up his sleeves and got to work. Shortly after he was appointed as the CEO, we started to see some big changes.
Sedor saw the redundancies in the sales process. Not only did he realize that this was causing them to leave money on the table in sales, he realized that the redundancies were costing the company money. So, Sedor decided to lay off nearly 30% of the team at PTX. This wasn’t only in sales either; many in upper management left the company.
In the restructuring process, Sedor combined the neurology and pain management divisions of the company. This meant that reps could cross sell, taking away half of the cost. Not to mention, routes have been re-routed in order to make the sales team more effective.
Why The Bulls Are Sticking Around
Ultimately, in my eyes (and I am a bull), there are two good reasons why the bulls are sticking around:
- Restructuring Will Lead To Sales – First and foremost, Pernix Therapeutics has a great line up of products and a decent pipeline. Now that the sales process has been restructured, the bulls are expecting better results to come down the line soon.
- Possible Acquisition – Another big factor, here, is the idea that the company may be sold. Sedor has a history as an acquisition artist and seems to be positioning PTX perfectly as acquisition bait. So, it’s not unthinkable that an acquisition would be coming down the line.
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[Image Courtesy of Wikipedia]