Are you 100% sure PNV won't have a major product recall...

Are you 100% sure PNV won't have a major product recall tomorrow?

I know a lot about product recalls on a regulatory and business impact level. Let me give you some insights and you can decide whether you want to ever invest in a biotech again.

1. Massive cost of recall activity.

2. FDA over scrutiny that will increase your compliance costs and COGS forever.

3. Loss of market share which may never recover

4. Heavy discounting and long term reduced premium pricing

5. Customers may sue.

I've studied what happened to cochlear and resmed when it happened to them. They had relatively minor issues. But the costs of the recall were in the hundreds of millions. Both massively successful large biotechs and probably best in class. Cochlear even had to do a CR. Both SPs were absolutely decimated at the time. They recovered eventually but it took many, many years. For a small cap like PNV with a very high PE it's SP would be decimated to below 50cents, IMO.

I'm sure most biotech investors are fairly naive on the impact of a recall which can happen anytime.


So do you still hold PNV at current prices? Nothing is 100%. Why do you hold at those prices? You are taking risks right now, and I just don't think you realise it. And I bet you would argue MSB has a higher chance of not getting FDA approval than PNV does of doing a product recall.

I will continue to point out your inconsistency until you run out of excuses for not shorting. 'Market stays irrational' excuse is just repeating a silly mantra. That's not how mature investors think or act.