Core Insights - The analysis emphasizes a conservative investment strategy, allocating 90% to stable investments and 10% to growth opportunities for balanced returns [1] - A detailed valuation framework is presented, projecting free cash flows over a 9-year period with a focus on consistent annual growth rates and discounting cash flows using CAPM [1] - The pharmaceutical revenue model outlines market adoption starting at 12.5% and reaching 100% by peak sales, with a significant decline in penetration post-exclusivity [1] Valuation Framework - The base valuation framework projects free cash flows over a 9-year period, starting from a baseline year, applying consistent annual growth rates [1] - Cash flows are discounted using a rate calculated through CAPM, considering both time value and risk factors [1] - Terminal value is calculated by projecting Year 9 cash flows and applying a sustainable long-term growth rate, assuming steady growth patterns [1] Pharmaceutical Revenue Model - The model assumes market adoption begins at 12.5% penetration at launch, growing linearly to 100% by peak sales year [1] - Post-exclusivity, penetration drops sharply by 80% in the first year and declines by 5% annually thereafter [1] - Revenue is calculated by multiplying the number of patients by the annual treatment cost, with costs scaling proportionally with revenue [1]

Global Partners LP Common Units (NYSE:GLP) Q4 2024 Earnings Conference Call February 28, 2025 10:00 AM ET Company Participants Sean Geary - CLO & Secretary Eric Slifka - President & CEO Gregory Hanson - CFO Mark Romaine - COO Conference Call Participants Selman Akyol - Stifel Operator Good day, everyone, and welcome to the Global Partners Fourth Quarter and Full Year 2024 Financial Results Conference Call. Today's call is being recorded. With us from Global Partners are President and Chief Executive Officer ...

Industry Overview - The GLP-1 weight loss market is projected to reach approximately $200 billion by 2031, driven by significant weight loss results and social media sharing [1] - The competitive landscape for GLP-1 drugs is intensifying, with multiple healthcare companies aiming to capture market share [2] Company Analysis: Amgen - Amgen's GLP-1 drug, MariTide, requires only monthly administration, contrasting with the weekly injections of other leading treatments, potentially enhancing patient adherence [4] - In a recent phase 2 trial, MariTide demonstrated the ability to help patients lose up to 20% of their body weight after one year, with indications that greater weight loss may be achievable over a longer duration [5] - Amgen's stock is currently trading at 41 times its trailing earnings and 15 times its expected future earnings, suggesting it is undervalued compared to the average healthcare stock, which trades at just under 18 times future profits [7][8] - The company reported a year-over-year revenue growth of over 30% for several drugs in its diversified portfolio and generated $10.4 billion in free cash flow, sufficient to cover its $4.8 billion dividend payments [9] - Despite a temporary stock decline following trial results that fell short of expectations, Amgen's valuation does not fully reflect the potential of MariTide, which could significantly increase in value if approved [10][11]

Financial Performance - Net income for Q4 2024 was $23.9 million, down 56.7% from $55.3 million in Q4 2023, resulting in $0.52 per diluted common limited partner unit compared to $1.41 in the same period last year[5] - EBITDA for Q4 2024 was $94.6 million, a decrease of 14.6% from $110.9 million in Q4 2023, while full-year EBITDA increased to $389.4 million from $356.4 million[6] - Distributable cash flow (DCF) for Q4 2024 was $45.7 million, down 23.1% from $59.4 million in Q4 2023, but full-year DCF slightly increased to $205.8 million from $202.7 million[7] - Gross profit for Q4 2024 was $268.8 million, a decrease of 4.5% from $280.4 million in Q4 2023, while full-year gross profit rose to $1.1 billion from $973.6 million[8] - Combined product margin for Q4 2024 was $302.0 million, down 1.2% from $305.7 million in Q4 2023, with full-year combined product margin increasing to $1.2 billion from $1.1 billion[9] - Net income attributable to common limited partners for Q4 2024 was $17,789, a decline of 63.0% compared to $48,130 in Q4 2023, with full-year net income at $82,774, down 35.4% from $128,039[29] - Adjusted EBITDA for Q4 2024 was $97,815, a decrease of 12.5% from $112,135 in Q4 2023, while full-year adjusted EBITDA was $388,893, up 9.2% from $356,264[31] Sales and Volume - Total sales for Q4 2024 were $4.2 billion, a decrease of 4.5% from $4.4 billion in Q4 2023, primarily due to lower prices despite increased volume sold[14] - Total volume sold in Q4 2024 was 1.8 billion gallons, an increase of 13.3% from 1.6 billion gallons in Q4 2023[15] - Sales for Q4 2024 were $4,186,238, a decrease of 5.1% from $4,409,112 in Q4 2023[29] Segment Performance - Gasoline Distribution and Station Operations segment product margin decreased to $213.6 million in Q4 2024 from $245.4 million in Q4 2023, reflecting lower fuel margins[11] - Wholesale segment product margin increased to $79.8 million in Q4 2024 from $51.9 million in Q4 2023, driven by favorable market conditions and terminal acquisitions[12] Assets and Liabilities - Total current assets increased to $1,207,380 in Q4 2024, up 10.0% from $1,097,828 in Q4 2023[30] - Total assets reached $3,788,198 in Q4 2024, an increase of 9.9% from $3,446,011 in Q4 2023[30] - Total liabilities rose to $3,071,585 in Q4 2024, up 16.1% from $2,645,351 in Q4 2023[30] Cash Flow and Capital Expenditures - Adjusted distributable cash flow after distributions to preferred unitholders was $44,365 for the latest quarter, down from $54,880 in the previous quarter[32] - Distributable cash flow for the latest quarter was $45,732, compared to $59,352 in the previous quarter, reflecting a decrease of approximately 23%[32] - Net cash provided by operating activities was $67,247 for the latest quarter, significantly lower than $169,416 in the previous quarter[32] - Maintenance capital expenditures increased to $14,985 in the latest quarter from $25,388 in the previous quarter, indicating a reduction in capital spending[32] - Distributions to preferred unitholders totaled $1,781 in the latest quarter, down from $3,921 in the previous quarter[32] Inventory and Equity Investments - The company experienced a significant increase in inventories, which rose to $594,072 in Q4 2024, compared to $397,314 in Q4 2023, reflecting a 49.5% increase[30] - The partnership's proportionate share of income from equity method investments was a loss of $358 for the latest quarter, compared to a loss of $119 in the previous quarter[34] - Distributable cash flow from equity method investments was $772 for the latest quarter, a recovery from a loss of $432 in the previous quarter[34] Preferred Units and Future Distributions - The partnership's Series A preferred units were fully redeemed on April 15, 2024, and are no longer outstanding, impacting future distributions[35] Operating Assets and Liabilities - The net changes in operating assets and liabilities resulted in a negative impact of $7,209 for the latest quarter, compared to a negative impact of $85,000 in the previous quarter[32] - The total distributable cash flow for the twelve months ended December 31, 2024, was $202,709, slightly up from $187,156 for the same period in 2023[32]

Core Insights - The GLP-1 industry is dominated by Novo Nordisk and Eli Lilly, with compounded versions of their drugs losing market share as they are no longer on the FDA drug shortage list [1] - Viking Therapeutics' VK2735 has shown promising results in clinical trials, with a 14.7% weight loss after 13 weeks, making it a strong competitor to existing treatments [2] - Speculation around a potential acquisition of Viking Therapeutics has led to a significant increase in its stock price [4][5] Industry Overview - The GLP-1 market is currently an oligopoly, primarily controlled by two major pharmaceutical companies [1] - The market for GLP-1 treatments is valued at approximately $100 billion, attracting interest from larger pharmaceutical companies seeking to expand their portfolios [8] Company Developments - Viking Therapeutics is advancing its VK2735 product, with plans for Phase 3 trials for its subcutaneous injection expected in Q2 2025 and ongoing development of an oral version [3] - The stock price of Viking Therapeutics surged by 121% following positive Phase 2 trial results, with analysts setting price targets as high as $138 [2][6] - There is a precedent for acquisitions occurring before FDA approval, as seen with Roche's buyout of Carmot Therapeutics for $2.7 billion [7][6] Stock Performance - Viking Therapeutics' stock has shown volatility, with a recent surge attributed to acquisition rumors and strong clinical trial results [4][10] - The average analyst price target for Viking Therapeutics is $97.29, indicating a potential upside of 243.52% from current levels [6][11] - The stock is currently experiencing a breakout attempt from a descending triangle pattern, which is typically considered bearish [9][10]

Core Viewpoint - Hims & Hers Health, Inc. (NYSE: HIMS) reported strong quarterly results but experienced a stock sell-off due to confusion surrounding its GLP-1 business, leading to the stock being perceived as undervalued [1]. Company Summary - Hims & Hers Health, Inc. is characterized as an online health and wellness platform that has shown significant performance in its latest quarter [1]. - Despite the positive financial results, the stock has been affected by market confusion, particularly regarding its GLP-1 business segment [1]. Investment Opportunity - The current market perception has resulted in Hims & Hers being considered an exceptionally cheap stock, presenting potential investment opportunities for those looking to capitalize on mispriced stocks [1].

Core Viewpoint - The individual investor adopts a contrarian investment style, focusing on deep value opportunities, particularly in stocks that have recently experienced sell-offs due to non-recurrent events, while also considering insider buying as a positive signal [1] Investment Strategy - The investment portfolio is split approximately 50%-50% between shares and call options, indicating a balanced approach to risk and return [1] - The investor's timeframe for holding positions typically ranges from 3 to 24 months, suggesting a medium-term investment horizon [1] - Fundamental analysis is employed to assess the health of companies, including their leverage and financial ratios compared to sector and industry averages [1] - Technical analysis is utilized to optimize entry and exit points, with a focus on support and resistance levels on weekly charts [1] Stock Selection Criteria - Preference is given to stocks that have undergone a recent sell-off, particularly when there is insider buying at the new lower price, indicating potential recovery [1] - The investor conducts professional background checks on insiders who purchase shares post-sell-off, adding a layer of due diligence [1] Market Focus - The primary focus is on stocks in the US market, although there is openness to owning shares in less stable economies, referred to as "banana republics" [1] - The investor screens through thousands of stocks to identify potential opportunities, highlighting a systematic approach to stock selection [1]

Core Insights - Hims & Hers Health shares fell 18% in after-hours trading despite reporting better-than-expected revenue and earnings, primarily due to disappointing gross margins [1][2] - The company's revenue increased by 95% year-over-year in Q4, reaching $246.6 million [1] - Gross margin was reported at 77%, below the expected 78.4% [2] Financial Performance - For the full year, excluding GLP-1 offerings, revenue rose 43% to $1.2 billion, surpassing the previous 2025 revenue target a year early [5] - Net income increased to $26.01 million, or 11 cents per share, compared to $1.25 million, or 1 cent per share, a year earlier [6] - Adjusted earnings were reported at $54.1 million, meeting analyst estimates [6] Future Outlook - For Q1, Hims & Hers anticipates revenue between $520 million to $540 million, exceeding analyst expectations of $497 million [6] - Adjusted earnings for the same period are projected to be between $55 million to $65 million [6] Market Context - The company experienced a significant stock drop of 26% following the FDA's announcement regarding the resolution of semaglutide injection product shortages [2] - Hims & Hers has been a standout in the digital health sector, particularly due to its weight loss offerings, with stock climbing approximately 200% for the year [3]

Core Insights - Lexaria Bioscience Corp. has received lead clinical site human research ethics committee (HREC) approval for the 5th study arm of its Phase 1b, 12-week chronic study GLP-1-H24-4 in Australia, allowing dosing to commence [1][2] - The study aims to investigate two GLP-1 drugs, semaglutide and tirzepatide, which together represent over 90% of the global GLP-1 market, showcasing a significant achievement for the company [3] - Lexaria's patented DehydraTECH delivery technology is expected to enhance the performance characteristics of these drugs through oral dosing, as opposed to injections [3][4] Study Details - The study consists of five arms: 1. DehydraTECH-CBD capsules 2. DehydraTECH-semaglutide capsules 3. DehydraTECH-semaglutide combined with DehydraTECH-CBD capsules 4. Rybelsus® tablets (positive control) 5. DehydraTECH-tirzepatide capsules (with newly received HREC approval) [5] - Patient recruitment and dosing are progressing, with the milestone of First Patient First Dose achieved in December 2024 [3] Company Overview - Lexaria operates a licensed in-house research laboratory and holds a robust intellectual property portfolio with 48 patents granted and additional patents pending worldwide [4] - DehydraTECH technology has demonstrated the ability to increase bio-absorption and deliver some drugs more effectively across the blood-brain barrier [4]

Core Insights - The article emphasizes a conservative investment strategy, allocating 90% to stable investments and 10% to growth opportunities for balanced returns [1] Valuation Framework - The base valuation framework projects free cash flows over a 9-year period, starting from a baseline year, applying consistent annual growth rates [1] - Cash flows are discounted using a rate calculated through CAPM, considering both time value and risk factors [1] - Terminal value is calculated by projecting Year 9 cash flows and applying a sustainable long-term growth rate, assuming steady growth patterns and discount rates [1] Pharmaceutical Revenue Model - The revenue model indicates a linear market adoption from 10% initial uptake to full penetration, followed by an 8% annual decline while maintaining at least 40% of peak levels [1] - Revenue calculations are based on patient numbers, market penetration, and annual treatment costs, with operating and production costs scaling proportionally with sales volume [1] - The final valuation incorporates success probability factors and time-adjusted cash flows using standard discount rates [1]