Saturday, March 24, 2012

Stocks DD Cites: Bill Ackman's Hong Kong Dollar bet: Nice lesson in macro


Read, understand and consent to the blog's DISCLAIMER here before proceeding to read the article

 This is an interesting event to watch (even if on sidelines). With the option of high leverage in Forex markets, if the bet turns out to be true, Bill Ackman explains one could stand to gain x times the original investment if HKD is revalued by 30%. Hong kong's elections is today Link 
Keep in mind inflation(Link) has slowed down since Ackman made his thesis back in Sept 2011, which is bad for this bet. HKD has moved up from 7.79(09/2011) to 7.76 (03/24/2012). So it is very close to higher end of the band (7.75 - 7.85)

Long thesis-> http://www.scribd.com/doc/86588026/Linked-to-Win-September-14-2011
The 150 page titled "Linked-to-win" thesis that the peg will be maintained for stability but adjusted/revalued to control high inflation. Hong kong cannot administer its monetary policy(change interest rates) because of the dollar peg. 

Ackman seen making his sales pitch on his HKD thesis ->
http://video.cnbc.com/gallery/?video=3000045621
http://video.cnbc.com/gallery/?video=3000044951

Hong kong officials dimissing Ackman's thesis ( keep in mind one of main goals reserve bank officials  is stability. So if they ever revalue the peg, it will be a surprise event. There will be no pre-announcement)->

 http://www.forbes.com/sites/afontevecchia/2012/03/16/hong-kong-official-disses-bill-ackmans-currency-peg-call/
http://articles.businessinsider.com/2011-11-09/markets/30376277_1_chief-executive-donald-tsang-betting-housing-policy
http://online.wsj.com/article/BT-CO-20120309-700126.html 

Recent Bloomberg article on inflation and growing discontent ->Link
Another article on growing discontent & wealth gap b/w poor and rich(HK has the biggest wealth gap in Asia) -> Link 2 
Inflation slowed recently to a 10-month low ->  Link 3

Not in favor of Long thesis
http://www.zerohedge.com/news/bill-ackmans-hkd-revaluation-trade-predicted-deutsche-bank-2010-and-why-db-thinks-it-wrong

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12/769,885 - prosecution update


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12-17-2011 - Non-final rejection   http://www.scribd.com/doc/86577695/12769885-1
03-22-2012 - Applicant's arguments  http://www.scribd.com/doc/86577579/12769885
03-22-2012 - Claims  http://www.scribd.com/doc/86577736/12769885-2

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Wednesday, March 21, 2012

Taro pharma's value paradox


Read, understand and consent to the blog's DISCLAIMER here before proceeding to read the article

While I will not argue on valuation of TARO in this post or the market multiple this strong business(unlike traditional generic business) should trade at, or identify it's most comparable peer, look at its impressive 3 year performance.

Taro 3 year performance
Taro's 3 year EBIDTA and Sales growth

Taro was relisted in NYSE on March 23rd. But the open offer from SUN has effectively put a lid on TARO's price. Despite the 12 month performance and strength of TARO's business, market valuation of it's parent SUN, relative valuation of peers like Perrigo,  TARO's special committee continues to "diligently" evaluate $24.5 offer for >3 months now (see link)!  Taro shares have traded >$35 for >2 months now and last traded $39.4 on 03/23...yet the evaluation of $24.5 offer continues. However, please note we are to believe this statement from the above PR: "The Special Committee recognizes its primary objective is to maximize value for the minority shareholders of Taro and will take all steps necessary to ensure this objective is achieved."

Update(04/04)-Note that TARO is trading at ~$41 (04/04), despite the overhang of majority shareholder buy-out. It is very easy to see that TARO's market price would never reflect it's true market value under current circumstances , with the overhang of majority shareholder buyout. A 12-month moratorium on any minority buy-out offer as well as Investor day with full and fair disclosure of it's mid term business and restructuring plan, it's pipeline assets which includes 4 NDA and 24 ANDA (per 10-k), may go a long way in finding the real market price for TARO's shares.



Public letters from Minority Shareholders
ISZO Capital
-> Link
Raging Capital
-> Link
Grandslam Asset Management
-> Link
Permian Investment partners
-> Link

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Anchor Patent# 13/272,520 prosecution


Read, understand and consent to the blog's DISCLAIMER here before proceeding to read the article

PTO Final Rejection 03/14/2012 -> http://www.scribd.com/doc/86197342/13272520
Amarin's Arguments 01/27/2012 (after non-final rejection) -> http://www.scribd.com/doc/81178384/anchor-arguments
Keep in mind, an appeal can be filed after final rejection and it is possible claims could still get allowance. See Lovaza's patent prosecution chronology -> Link
For technical details of what final rejection means in the context of patent prosecution refer to this link

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Friday, March 16, 2012

12/052,598 - 06/2011-Applicant's arguments


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This is the composition of matter patent amarin is pursuing. Check the 1st 9 pages of this below document. They are making the distinction between  EPADEL and amr101. The argument is one has DHA , the other has no DHA.


Link -> http://www.scribd.com/doc/85620902/12052598

Note this is a granted patent for which a terminal disclaimer has already been approved and they are trying to make some amendments.  See Link

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Tuesday, March 6, 2012

Lovaza patent #5502077 prosecution chronology-highlights


Read, understand and consent to the blog's disclaimer here before proceeding to read the article 

I have pulled the highlights(not included applicant's arguments) of >5 year prosecution history of Lovaza's patent# 5502077 (Link) from USPTO's PAIR site. See the 4 Non-Final-Rejections(nfj) and 3 Final Rejections(fj), Appeals and the final allowance.
This patent(expiring in 05/2013) has until now protected the exclusivity of Lovaza. If you read the rejections they are because of obviousness (prior art - sutherland et al, cornieri et al) which is what Amarin is going through for it's IP on AMR101.
There has been some "sensational" headlines and tweeting on Amarin's IP prosecution history and I have posted this below to put things in perspective. I am not saying Amarin's patent claims will finally receive allowance..just trying to put things in perspective.

http://www.scribd.com/doc/84220040/07902500-nfj-03-1990
http://www.scribd.com/doc/84220016/07902500-fj-08-1990
http://www.scribd.com/doc/84220033/07902500-nfj-01-1991
http://www.scribd.com/doc/84220012/07902500-fj-06-1991
http://www.scribd.com/doc/84220052/07902500-nfj-11-1992
http://www.scribd.com/doc/84220043/07902500-nfj-10-1993
http://www.scribd.com/doc/84220067/07902500-amended-claims-08-1994
http://www.scribd.com/doc/84220026/07902500-fj-11-1994
http://www.scribd.com/doc/84231296/07902500-fj-11-1994
http://www.scribd.com/doc/84220003/07902500-05-1995-appeal-filed
http://www.scribd.com/doc/84220007/07902500-allowance-11-1995

Patent# 5502077

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