Portfolio holding King Pharmaceuticals (KG) reported second quarter results earlier this week. Earnings equaled $371
million compared to $445 million in the second quarter of 2009. The
Company reported net income of $18.0 million and diluted earnings per
share of $0.07 during the second quarter of 2010, compared to a net
income of $37.9 million and diluted earnings per share of $0.15 in
the same period of the prior year.
Most of the drop-off was because of a greater-than-expected decrease in sales of Skelaxin -- sales off 95%.
Going forward, I'm looking for positive results generated by new abuse-deterrent pain drugs such as Embeda, Remoxy and Acurox. KG stock plunged earlier this year when the government gave a thumbs-down to one of its abuse-deterrent drugs. The company will be going back to the FDA later this year, early next year, and I'm cautiously optimistic for now.
Most of the drop-off was because of a greater-than-expected decrease in sales of Skelaxin -- sales off 95%.
Going forward, I'm looking for positive results generated by new abuse-deterrent pain drugs such as Embeda, Remoxy and Acurox. KG stock plunged earlier this year when the government gave a thumbs-down to one of its abuse-deterrent drugs. The company will be going back to the FDA later this year, early next year, and I'm cautiously optimistic for now.
While I'm waiting I'm comforted by KG's solid balance sheet with cash and equivalents of $573 million and access to a $500 million credit line.
I probably should have reduced my KG position back to a 5% holding last year when the stock enjoyed a big run up. That would have partially locked in a nice gain.
Now the stock is below my original purchase price. And it will take a few quarters for everything to shake out to my satisfaction.
Patience is the word.
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