Pernix Therapeutics Holdings Inc (NASDAQ:PTX) Dip Could Be A Discount Entry Opportunity

Pernix Therapeutics Holdings Inc (NASDAQ:PTX) has taken a hit this week on the back of management putting out the company's latest financials and holding a conference call to accompany the release. The numbers, which detail full year and final quarter 2016 results, look underwhelming at a glance, and markets are selling off on the company based on the headline data.We've said it many times in the past here at Insider Financial, and we're going to say it again: there's opportunity in misinterpretation, and in no sector is misinterpretation more prevalent than biotech.Here's what just happened, and why we think markets have got it wrong.Those looking to catch up on our previous coverage of this one can do so here, but as a brief overview, Pernix is a biotechnology company that has a portfolio of already approved assets and a pipeline of development assets across a range of indication types, primarily revolving around disorders of the central nervous system (CNS). The leads assets are Treximet, which is designed to treat migraines, and Zohydro ER, which is an extended release opioid targeting pain management.Anyway, we've highlighted this one as a buyout candidate in the past on a couple of occasions. The current man in charge, John Sedor, is well known for taking biotechs from struggling companies to sellable entities, and it looked like (and still looks like) Pernix could be the latest to join the list of companies with which he's done just that.In fact, he mentioned the potential for a buyout in the recent call:

"We continue to evaluate various alternatives that might proactively address our liquidity and capital structure in a constructive manner, including strategic and refinancing alternatives, asset sales and mergers and acquisitions."

He also noted that Pernix has had some global pharma interest in its Silenor program:

"Looking ahead, we believe Silenor is a good candidate for an OTC conversion. We've already received increased from multiple large cap global pharmaceuticals companies interested in discussing this possibility with us…"

Both of these things are positive, and both align with expectations that we have outlined in previous articles.That's not what we're really here to discuss today, however. What we're here to highlight is something that wider markets look to have overlooked – that the numbers on which financial media outlets are basing their headlines in response to the company's earnings release are skewed by the GlaxoSmithKline plc (ADR) (NYSE:GSK) dispute settlement. The company paid out $16 million (actually a little over) throughout 2016, and has adjusted its revenues figures in the recent release to reflect this fact.The company has now negotiated a deal for the remaining balance on the GSK situation, and will only have to pay out $1 million based on this agreement in 2017. This means that the situation is closed, and is barely going to impact Pernix this year – something that will give management the opportunity to focus on the liquidity issues we have highlighted (and that Pernix addressed in the call) as weighing on PPS, and resulting in an imbalance between market capitalization and true value.So what's next?Well, we pointed out that the resolution of the GSK situation made the company a more attractive buyout target, in the sense that it removes a large risk factor that any suitor would have had to take in to consideration in its valuation of Pernix if it was to bid with the legal proceedings ongoing.As such, in an optimistic view, we're looking for any word on an acquisition deal. From a slightly less rose tinted standpoint, any detail on the above mentioned global pharma partnership for the Silenor program could be a massive upside catalyst.Pernix isn’t out of the woods just yet, and there are still some capital structure concerns weighing on sentiment. Step by step, however, it's digging itself out of a hole, and it can only be a matter of time before valuation realigns to reflect this fact.We will be updating our subscribers as soon as we know more. For the latest updates on PTX, sign up below!Disclosure: We have no position in any of the securities mentioned and have not been compensated for this article.