Shares of GeoPharma, Inc. (Nasdaq: GORX) were up as much as 155 percent at mid-day today.
Despite a 28 percent decrease in third quarter revenues, CEO Mihir Taneja said that the company is confident that it will “end the 2009 fiscal year on a high note” primarily because of the addition of new manufacturing contracts and the emergence of its pharmaceutical business.
Pharmaceutical revenues for the nine months ended December 31st were $1.1 million, a 2722 percent increase over the same period in 2007.
CFO, Carol Dore-Falcone stated that the company hopes to “achieve break even on a cash basis in the final quarter of 2009 fiscal year ending March 31, 2009, and to see continued improvements in our financial results thereafter.”
Earlier this year, the company announced the sale of its majority ownership in its ovarian cancer business for about $2.5 million in cash, and a minority stake in the business, allowing the company to strengthen its financial position and ease “the burden of funding our ovarian cancer business segment,” Taneja said. GeoPharma will still remain a significant partner in the business, with a 40 percent stake.
GeoPharma has three main market segments:
- Specialty Pharma, which specializes in the formulation of generic drugs for human and veterinary usage and the development of medical devices used by oncologists and other medical professionals.
- Manufacturing, which manufactures generic drugs nutraceuticals, cosmetics and functional food products
- Distribution, which packages and distributes the company’s products
In September 2008, Green Coast Capital issued a 12-month price target of $5.00 on GORX, citing the company’s well-defined growth strategy, and FDA approval of its new Largo, FL Cephalosporin facility for the production of the antibiotic, Cephalexin.
Green Coast’s valuation was based on applying a standard 5x gross profit valuation multiple to the company’s current fiscal year gross profit forecast of $20.6 million, and subtracting the company’s current debt of $26.7 million.
