- Stifel comments on on NutriSystem (NASDAQ:NTRI) noting it's a company that has been a phenomenal success story, having just completed a quarter in which it reported $155 million in revenue and added 235,000 new customers. The firm has long questioned the annuity value of NTRI's business and have been dead wrong on the stock but continue to believe they are dead right on the long-term prospects. To be sure, they note that if they are wrong about the annuitized value of the business, they believe 20x forward earnings is not expensive for its growth.
Firm believes the weight loss industry is one based on the psychological manipulation of vulnerable customers and, because of this, they pay close attention to marketing campaigns. NTRI has had phenomenal success growing this business but it is the basis of the industry that makes competition such a significant long- term risk.
There is a $120 billion pharmaceutical company named Sanofi-Aventis which has a product named Rimonabant, a drug which has shown significant promise in trials for the treatment of obesity. The drug also may help manage good/ bad cholesterol, type-2 diabetes, and nicotine addiction. Rimonabant is already being sold in Europe under the name Acomplia and is awaiting FDA approval in the U.S
On Sanofi's scheduled Tuesday morning earnings call, they believe investors should be focused on the success of Acomplia in Britain since its June 28 launch, an update on the launch in six other European countries in mid- October, and an update on FDA approval status in the U.S. The consensus view is that FDA approval will not occur by year-end 2006 as originally projected and could be pushed into early 2007. Given their belief that dieters are quick to try a new magic potion, Stifel believes NTRI investors should pay close attention to news out of Sanofi over the next several months, starting Tuesday.
As an aside, on October 12, the chief pharmacist for Aetna, an insurer of 8.3 million Americans spoke positively about the Sanofi-Aventis diet drug at the 2006 Obesity Congress, raising hopes that the U.S. insurer may include coverage for the drug. Firm believes health coverage for the Sanofi diet drug could make it a compelling alternative to existing uncovered diet programs.
Maintains Hold on NTRI.
Notablecalls: Oh boy! Oh Scott! That's what I call research! I'd be tempted to put out a small short position in NTRI today as the chart seems to be agreeing with Stifel here.
Firm believes the weight loss industry is one based on the psychological manipulation of vulnerable customers and, because of this, they pay close attention to marketing campaigns. NTRI has had phenomenal success growing this business but it is the basis of the industry that makes competition such a significant long- term risk.
There is a $120 billion pharmaceutical company named Sanofi-Aventis which has a product named Rimonabant, a drug which has shown significant promise in trials for the treatment of obesity. The drug also may help manage good/ bad cholesterol, type-2 diabetes, and nicotine addiction. Rimonabant is already being sold in Europe under the name Acomplia and is awaiting FDA approval in the U.S
On Sanofi's scheduled Tuesday morning earnings call, they believe investors should be focused on the success of Acomplia in Britain since its June 28 launch, an update on the launch in six other European countries in mid- October, and an update on FDA approval status in the U.S. The consensus view is that FDA approval will not occur by year-end 2006 as originally projected and could be pushed into early 2007. Given their belief that dieters are quick to try a new magic potion, Stifel believes NTRI investors should pay close attention to news out of Sanofi over the next several months, starting Tuesday.
As an aside, on October 12, the chief pharmacist for Aetna, an insurer of 8.3 million Americans spoke positively about the Sanofi-Aventis diet drug at the 2006 Obesity Congress, raising hopes that the U.S. insurer may include coverage for the drug. Firm believes health coverage for the Sanofi diet drug could make it a compelling alternative to existing uncovered diet programs.
Maintains Hold on NTRI.
Notablecalls: Oh boy! Oh Scott! That's what I call research! I'd be tempted to put out a small short position in NTRI today as the chart seems to be agreeing with Stifel here.
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