RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Why paying off EMD Sorono ? They want to be the largest Pharma in Canada. That does not occur by being acquired.
I agree that we should give them time to roll out their strategy. Eventually, Taimed might come calling but that does not appear to be in the cards yet.
bfw
Wino115 wrote: Interesting opinions here, all valid since we are all just trying to guess the future. If I may add to the cautious side of the "takeover" speculation -- I think it's just way to early to contemplate that and TH doesn't really have the characteristics that most buyers would be seeking. Of course, a one-drug profit machine is an interesting characteristic, but really only to someone looking to plug a short term cash hole. But the problem is that it's hard to really get a large bargain on something like that since the trends and numbers can easily lead to a simple NPV valuation exercise which the Board would have to consider. Those kind of buyers would want to really only buy "on the cheap" and that likely would be hard.
Also, it's an orphan drug for a reason - it's a specialty product in a narrow market that isn't really growing much. In fact, you can look at the various models out there and see that earnings (even including Europe) peak in 5 years or so and then flatline and eventually shrink a tad. That's not particularly an attractive product profile. So given what it represents right now, I just don't see any quality buyer, just the "snatch it cheap" type which likely would not fly.
The game-changer could be the new formulation that is first-line -- so a much, much bigger market and one that would grow beyond just a 4-5 year peak earnings profile. I would change my opinion then. But they don't have the rights yet (if at all) and TaiMed states its at least 5 years away, and that's just a guess.
Anything TH licenses in or buys over the next 5 years from a non-TaiMed souce they would probably have to pay=up for too or it would, once again, just be so early in the testing/commercialization stage that it won't be that large a revenue stream. If they want to leverage the existing sales force, it would also be in the HIV treatment area. So, once again, not one of the large markets for pharmas. Yes, the specialty guys could be intereseted (Giliead, ViV,e tc..), but they'd also be in the running for some of those exact opportunities TH is interested in and I would guess they would have already looked at it as they bring far more to the table than TH at this point.
So I guess my conclusion is I just don't see who the quatlity buyer would be that woudl pay up to the easily calculated NPV. It would be a low quality buy-on-the-cheap type and shareholders wouldn't go for it.
Please poke holes in my thoughts, but it's still just addressing a tiny market in a small market area. We're not talking the hot pharma areas here for the big boys -- in fact, they've all been exiting this area for years and downsizing it.