FindellCap

Disclaimer: Not financial advice. We may hold long or short positions in any securities mentioned, and may buy or sell such securities without prior disclosure.

[FindellCap @fin_capital]

An interesting note on $ESTA. The Mizhou analyst estimates that 12-20mm shares will have to be bought in late June against a 27mm outstanding equity float as a result of the Russell rebalance.

[Siegfried Eggert @SGEggert]

$FIG closed +9.9% yesterday and moved up another +8.8% today on high trading volume.

The only real news I can find is the open letter by @fin_capital . Barron's picked it up yesterday. https://t.co/XooiytDC38

This is a noteworthy move in a short period of time and is probably worth keeping an eye on.

[FindellCap @fin_capital]

We believe @zoink is one of the great tech leaders of our time and he has built something remarkable at $FIG. See our report for our thoughts on the company and our letter for some respectful suggestions for items for the Board and Dylan to consider.

https://t.co/TskBFjPaQE

[FindellCap @fin_capital]

We congratulate $OPRT and their Board on their new CEO hire Doug Bland. We believe that Doug has the right consumer lending experience to drive this company forward. We look forward to what is to come.

https://t.co/iv8wIEo1gX

[FindellCap @fin_capital]

$ROOT posted a strong beat and new partnerships with Toyota and spoke to accelerating PIF growth through partnerships with a continued target of 60-65% loss ratios.

We believe that they are proving out our thesis outlined here - https://t.co/4kyjCrTDiw - they can grow regardless of the ad spend environment in car insurance via their partnership channel. So even if the car insurance environment gets worse here they appear able to still win.

The stock is down substantially since their last report and perhaps no one will care for a while given general industry headwinds, but we believe that they are slowly demonstrating that they have an industry leading product here.

[FindellCap @fin_capital]

Stephens is flagging $ESTA as a Russell 2000 add. We estimate that this would require the purchase of +10mm shares by the direct index and other passive holders against a stock that trades 400k shares a day…

[FindellCap @fin_capital]

We support the Board in taking this important step and wish Raul all the best. An exciting new chapter for $OPRT!

https://t.co/ykMh91r2yi

[FindellCap @fin_capital]

Our newest long idea is $ROOT. Similar to our prior two public pitches in $LQDA and $ESTA, we believe that $ROOT has a best in class product that will win out in the end.

If you can find the best mousetrap, that will usually win in the end.

See link for full write up.

https://t.co/lWESBIDkbY

[FindellCap @fin_capital]

We believe $ESTA is starting to demonstrate the long term structural growth story that we articulated a year ago in our public pitch (see below).

The channel checks from US surgeons on Motiva have been very positive throughout this year. We believe that $ESTA will take the majority of the US market ($450mm augmentation plus $300mm recon) by 2028. Their minimally invasive procedures (MIA, Preserve) could expand the market as well.

What makes $ESTA such a compelling long term story is how hard it is for anyone to enter the US market (almost impossible at this point given the number of years required to get sufficient data).

We believe that once $ESTA captures share, it will never give it up and as the margin expands and earnings follow those earnings will be accorded a high multiple. They are now generating positive EBITDA.

There is an almost 20% short float and management indicated on the call likely Russell inclusion next year, which we believe would require the purchase of 10mm shares by passive indexes.
https://t.co/7KUoEtcUQO

[FindellCap @fin_capital]

$LQDA reported their results yesterday that far exceeded our own expectations.

To appreciate the scope of this launch so far, we believe the case study of $VRNA is illuminating.

Both $VRNA and $LQDA treat pulmonary conditions (COPD/PH), have similar undiluted share counts (85mm/87mm), and CEOs who came from $UTHR (Zaccardelli/Jeffs). VRNA launched in the summer of 2024 while LQDA launched this past summer and at launch both stock were trading in the low teens.

The $VRNA story has already unfolded. They had a terrific launch that exceeded expectations and the company would be acquired for $10 billion (~$107 a share) the following year after 3 full quarters of commercialization.

We are now one full quarter into the commercial story of $LQDA, and they are having a better launch to date than $VRNA.

$VRNA did $36.6mm in its first full quarter while $LQDA did over $52mm. $VRNA did $72.8mm in its second full quarter while $LQDA should substantially exceed that given current Rx numbers.

$VRNA still generated losses until their 3rd full quarter of launch. $LQDA is profitable in its first full quarter of launch ($LQDA has much lower overhead with a smaller sales force).

Where the two stories differ so far at least is in the stock price. $VRNA was north of $40 a share after reporting its first full quarter of commercialization and exceeded $70 stock after reporting its second full quarter of commercialization.

Despite posting higher revenue and better margins, $LQDA with roughly same share count as $VRNA is priced at $25 a share.

Obviously, what gives here is the '327 concern. But with this kind of growth, $LQDA's PAH numbers are exceeding what the street had envisioned they would do in PAH and ILD combined.

The other issue that we believe is equally as important is where we are in the calendar year.

All funds are sensitive to how they perform in the short term, but that sensitivity is heightened as we get to year end. All binary risks that can create a potential negative impact are avoided. Why step in front of a potentially negative mark to market even if the long term picture is positive?

But there in lies the long term opportunity.

We believe that $LQDA is proving that it has the best in class product for this market and has better launch data so far than $VRNA. We saw how that story ended with a $10 billion take out and +$100 take out price.

[FindellCap @fin_capital]

Our take on the $LQDA launch so far and litigation https://t.co/QtuGrvZMN1. We employed a third party firm to survey 30 randomized doctors and we found 372 patients on Yutrepia versus 1,629 on Tyvaso. This would suggest that $LQDA is close to 20% of the market.

As $LQDA shareholders, we would be happy with patient counts less than half this amount and we do not think the expectations going into this quarter should be set this high, but directionally this survey demonstrates how strong this uptake is going.

More important than the survey has been the clinician feedback. There is a significant unmet need in the market as many patients do not tolerate Tyvaso and Yutrepia is now meeting that need.

Lastly, on the contention that some prognosticators have made that this judge is going to pull this product from the market if he finds against $LQDA, we would note that there is no example of a 505(b)(2) approved and marketed drug being withdrawn from patients as a result of a ruling from litigation filed under Hatch-Waxman.

Pulling this drug from the market over a pop-up patent as $UTHR's lawyers want would in effect kill several hundred very sick people and we believe would be a moral outrage.

[Reuters @Reuters]

LIVE: Aerial view over London as votes counted in UK 2024 election https://t.co/cvf7JJxWDN

[FindellCap @fin_capital]

@Crussian17 Now that we are passed that 30 day window, a clearance to launch could occur at any moment.

[FindellCap @fin_capital]

@Malsonian En Banc reviews are really for situations where you have a split decision (this was not a split decision) and there is something precedential (it is not) and even then it is a low probability.

[FindellCap @fin_capital]

@michaelburry_ tripled his position in $REAL.

[FindellCap @fin_capital]

@T_OConnell This does not affect PAH at all and in the end will not affect their commercialization strategy for ILD given how weak this patent is. $LQDA is innovating and not litigating. In the end that will win out over $UTHR's purely litigating approach.

[FindellCap @fin_capital]

@Biohazard3737 Kahn has lost every single case - who cares if the FTC tried to block.

[Idea Brunch @IdeaBrunchEmail]

Check out our latest interview with Brian Finn of @fin_capital

Brian discusses his recent activist letter at $OPRT and shares some other ideas!

https://t.co/sgPhNzCg77