Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev | Next
Author: steveting One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 253  
Subject: Re: New buying op Date: 11/24/2003 10:45 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Hi Phil,

I generally agree with your points and having a diverse line of products for revenue. The problem I see with this is the cost of producing and selling this broad line of products. One can see this directly by looking at the gross margins and SGA. There are pros and cons to having a diversified or specialized product line, the best I see is having a balanced approach or middle ground for KG.

Having said the above, I believe nothing will beat a blockbuster drug and leads on to the issue of R&D.

You're right in that KG is light on the R&D and they make that up by product acquisitions, their underlying business. Competition for this type of business is fierce with companies such as Shire Pharmaceuticals, Watson Pharmaceuticals, Boivail Corp, Forest Labs, and others going after patent protected products. For KG to succeed in the long term and if they're not able to produce products in-house due to the small R&D, a partnership with a biotech company would be a better alternative. One such partnership (Novavax) has been successful in getting Estrasorb approved by FDS recently. Unfortunately Estrasorb address's the area of woman's health via HRT and this not a good market to be right now. If KG can partner with biotechs in the area of cardiovascular/respiratory, then there would be a better opportunities of a blockbuster. This is one strategic area I'd like to see KG management address.

I'll wait to see how the year ends and review the performance of KG. 2004 is going to be an interesting year and I'd like to see KG management announce some initiatives to produce growth of at least 15% in revenue.

Best of luck to all.

Steveting

Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev | Next

Announcements

2013 Feste Award Voting Begins!
Who will win the 2013 Feste Award? Vote now for the Fool that most exemplifies the Fool Community mission of Learning Together!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Tax Strategies

TMFPMarti-Feeling Good
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement