Pernix Therapeutics Holdings Inc (NASDAQ: PTX)
Pernix Therapeutics has been seeing some volatility over the past week or so in the market. While the past 3 months have been incredibly strong, it seems as though investors are starting to get cold feet. Nonetheless, when it comes to this stock, the sky really is the limit. Today, we’ll talk about why I believe that there is tremendous upside potential ahead for the stock.
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Company Restructuring Will Likely Lead To Long-Term Growth For PTX
Pernix Therapeutics has several products that are approved by the FDA and currently in the commercialization process. However, poor sales volume on these products has led to bearish reactions in the market, driving the price of the stock down dramatically over the past year. However, the fact that these products haven’t sold well doesn’t necessarily mean that they are bad products. In fact, in my opinion, they are strong products. The problem is how they were being sold.
One of the first things that John Sedor has done as the CEO of the company is restructure this process. Ultimately, Sedor found several redundancies between the neurology and pain management sales forces at PTX. As a result, he saw an opportunity to increase the effectiveness of the campaign while decreasing costs. In order to do so, sales territories were restructured and several employees, including key members of management, have been laid off. Due to the restructuring, we’re starting to see strong sales growth in some of the underperforming products offered by the company.
In the past, we’ve talked about the fact that PTX has a rather large amount of debt. However, the debt is likely to become less and less of a problem as time moves on. In fact, Sedor said that the next move is to start working on restructuring debt to improve the overall financial stability of the company. While no specific details with regard to debt restructuring have been released quite yet, we do know that the company is reaching out to lenders in order to proactively restructure debt in a constructive manner. In a recent statement, John Sedor, CEO at Pernix Therapeutics, had the following to say with regard to sales and debt restructuring:
“We’ve addressed a number of challenges recently, and are making important progress on several fronts… I strongly believe that the restructuring of our sales force and the recent management changes optimally position Pernix for future revenue growth and profitability. Importantly, our commercial team continues to drive increased usage of our three core products, Treximet, Silenor and Zohyrdor ER, with each showing strong prescription growth in the second quarter over the first quarter. In addition, our prescription fulfillment program, Pernix Prescriptions Direct, continues to gain increased traction each week as more patients utlize this program. Going forward, we will continue to focus on improving our financial flexibility and strengthening our balance sheet. Our objectives are to improve operating cash flow generation through the optimization of our product portfolio and cost structure, and engage with lenders to proactively restructure existing debt in a constructive manner that we believe will ultimately benefit all stakeholders.”
What We Can Expect To See Moving Forward
Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from PTX. While I do understand the concerns with regard to sales volume as well as debt, I don’t believe that these will be concerns for much longer. Sedor has done an incredible job of improving sales and restructuring the business to be more cost effective, and we’ve only seen the beginning. At this point, I’m expecting to see a continuation of positive changes and improvements in sales and financial data. All in all, I’m expecting to see growth ahead.
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What Do You Think?
Where do you think PTX is headed moving forward? Join the discussion at TalkTRENDZ!
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