Pernix Therapeutics Holdings Inc (NASDAQ:PTX) has had an interesting time in the market as of late. With news of possible a possible acquisition, the value of the stock skyrocketed. However, since then, it has fallen back down in a big way. Now the big question is, “Is there hope?” Today, we'll talk about why I believe that there's not only hope, but PTX stock is likely to climb from here.
Understanding The Struggles PTX Has Been Through
Pernix Therapeutics hasn't had the best time in the market. While the company has had multiple products approved to date, where they seem to fall apart is in sales. Unfortunately, the company couldn't seem to get the masses involved in their products. As a result, the company has been through quite a bit. With revenue declining and a continuation of operating losses quarter after quarter, many investors have decided to abandon ship.
In fact, things got so bad at PTX that investors started to push for the resignation of the then CEO, Doug Drysdale. Eventually, investors got what they wanted and Drysdale stepped down. In his place, John Sedor stepped in to bring the company up to where it should be.
John Sedor Is The #1 Reason I'm Bullish
The number #1 reason that I have a bullish opinion with regard to PTX has to do with John Sedor, the new CEO of the company. The reality is that we know that the company has incredible products, we know that the company has a strong pipeline, we also know that management was failing. However, John Sedor sees value here. In fact, he sees enough value in the company to risk his well-deserved reputation on it. Taking the CEO position of a struggling company is something that the greats only do when they believe that they can really turn things around, and Sedor is one of those greats.
Sedor Has Already Made Massive Changes
At this point, John Sedor hasn't been at the helm at Pernix for very long. However, in the few months that he's been there, we've seen some big changes. In fact, if you remember back, he recently completely restructured the sales process at the company. When he came on board, Sedor saw that there were several redundancies involved in the sales process. One of the big problems is that some sales reps would see an overlap of duties because they were in different departments.
To solve the issue, Sedor decided to restructure the entire process, combining departments and getting rid of the redundancies across them. As a result of doing so, PTX was able to reduce expenses in a big way by creating a more productive team of less members. However, that's not where the changes ended.
Since Sedor took control, he has made big changes with regard to management. In fact, key members of management have left the company, and the new CEO has appointed his own trusted members to the management team. At this point, because of the changes that he has made, the company may have the same products, but on a procedural basis, PTX is an entirely different company.
What I'm Expecting To See Moving Forward
Moving forward, I have a relatively bullish opinion of what we can expect to see from Pernix Therapeutics. While there are risks involved, and Sedor does have his work cut out for him, I believe that the rewards far outweigh the risks here. At the end of the day, PTX has created several great products. Now, they have a new management team in charge that not only has a strong focus on growth, but the ability to make the change. All in all, I'm expecting to see long run gains.