The report I quoted suggests that PFE could gain from an acquisition of SHPG even if new tax codes means there are no inversion benefits gained. Government can discourage companies from doing inversions by negating any tax benefits, but the only way to stop mergers if there is no tax benefit involved is through anti-trust provisions. Do you think PFE-SHPG would fail on anti-competition concerns?
Shpg in my opinion is a great example of tax inversion. It is really an American company. Pfe & agn aren't going to buy it because the government will not let them. Imho
Check out "TOP MARKET GAINERS dot com" (plug the address in your browser) it looks like they are about to have another big alert. Their last Nasdaq trade idea went up over 30%.
Analysts have been pointing to a buyout of SHPG by the likes of PFE, AGN, etc for several years. Now that are talking about how a takeover of SHPG makes sense, even if a buyout does not gain the benefit of tax inversion.
@Another stock to bounce this week was Shire, on 13.7 times prospective earnings, below a 10-year median of 16.7 times and as much as 25 in 2014. The stock has fallen more than 20 percent over the last year, as some investors worried over its costly deal to buy U.S. peer Baxalta. DEAL OR NO DEAL Exane BNP Paribas analyst David Finch added Shire to its M&A Target list, noting: "Big Pharma in general has other reasons than tax efficiency to make big acquisitions." He cites Shire's cheap valuation, as well as favourable forex conditions and the unsustainability of share buybacks, as contributing to the case for Pfizer to bid for Shire. And even if Shire resists an approach, the stock's valuation meant that: "Deal or no deal, we think we will make money."
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SHPG's presentation on the merger sums up the debt situation (I tried posting part of it but YHOO blocks it). Anyway, although leverage will go up, it is expected to be between 2-3X in fairly short order. Sure that's high relative to several large pharma companies I took a look at, but it seems quite manageable.. ABBV for example is running at ~1.5X.
With annual FCF forecast to be 6B (versus ~2B in recent years), the 18B debt related to the acquisition could potentially be paid off in as little as three years. The company plans to maintain an investment grade debt rating which will keep a cap on interest costs of debt going forward. So overall, I see no major concerns on the debt front.
Another step forward by SHPG to maintain its dominance in the ADHD market space.
@ Lexington, Mass. - April 4, 2016- Shire plc today announces positive topline results from a four-week Phase 3, randomized, double-blind, multi-center, placebo-controlled, dose-optimization, safety and efficacy study, SHP465-305, in children and adolescents aged 6-17 years with Attention-Deficit/Hyperactivity Disorder (ADHD). SHP465 (triple-bead mixed amphetamine salts - MAS) is an investigational oral stimulant medication being evaluated in the U.S. as a potential treatment for ADHD, a therapeutic area with significant need for additional treatment options. The primary efficacy analysis of study 305 demonstrated that SHP465, administered as a daily morning dose, was superior to placebo on the change from baseline in ADHD-RS-IV (ADHD rating scale) total score, with a Least Squares (LS) mean difference from placebo at Week 4 of -9.9 (95% CI: -13.0 to -6.8, p
@ Overall Robust SHP465 Clinical Development Program to Support Class 2 Resubmission Including study 305 and previous studies, Shire now has a robust database of 15 clinical studies evaluating SHP465 in more than 1,100 subjects. Once the pharmacokinetic study and an additional safety and efficacy Phase 3 trial in adults currently under way are complete later this year, Shire plans to add these study results to its existing SHP465 data set to submit a Class 2 resubmission for FDA approval of the medicine for treatment of ADHD. SHP465 remains on track for potential U.S. launch in the second half of 2017. Protection for Shire's ADHD
@Franchise Extends to 2029 There are patents supporting Shire's overall ADHD franchise in the U.S. that extend to 2029. With a launch planned for the second half of 2017, Shire expects that SHP465, following potential FDA approval, will have three years of Hatch-Waxman exclusivity and at least three patents listed in the FDA Orange Book expiring as late as May 2029.
The pullback in SHPG share price is in-line with the sector. High CEO pay is not limited to SHPG. Even with the huge increase, his compensation is comparable to that of other CEO's. I don't think any CEO deserves such a high payout, but Omskov has positioned the company nicely for growth in upcoming years and I am happy with that.
@Before the increase, his pay had lagged behind peers such as Baxalta’s Ludwig Hantson, who received $18.6 million for 2015. Ornskov’s compensation is now almost double that of Pascal Soriot, who runs British drugmaker AstraZeneca Plc, a company twice Shire’s market value. Some biotech companies of similar size pay much more, such as Vertex Pharmaceuticals Inc., whose CEO earned $36.6 million, and Regeneron Pharmaceuticals Inc., whose CEO compensation was almost $42 million, according to data compiled by Bloomberg. Under Ornskov’s leadership, Shire has roughly doubled in market value to about $33.5 billion.
Remember that Kyle Bass last year succeeded in getting the USPTO Patent Trial and Appeal Board (PTAB) to start IPR proceedings on SHPG's Lialda patent. I wonder if/how this latest court ruling will affect PTAB's review, if at all. They will render their decision by October 2016.
@The Grounds Of Institution The PTAB decision to institute the Lialda patent IPR is based on its finding that the IPR petition established a reasonable likelihood the petitioner would prevail on its assertion that claims 1–4 of the ‘720 patent would have been obvious over European Patent Application 0 375 063 (“Groenendaal”) and U.S. Patent No. 3,965,256 (“Leslie”) (issued in 1976!). By statute, the PTAB has until October 2016 to render its final decision. According to the initial scheduling order, an oral hearing (if requested) will be conducted in June 2016. Impact On Pending ANDA The PTAB decision identifies four pending district court proceedings involving the ‘720 patent, and it appears that a fifth was filed after the IPR petition: ZZZZZ Shire Development LLC v. Watson Pharms., Inc., FLSD-0-12-60862 (S.D. Fla.) (filed May 8, 2012). These all appear to be ANDA cases, filed by Shire after the defendants sought FDA approval of generic versions of Lialda®. While it is not unusual for an IPR to be filed while district court litigation is pending (indeed, most IPRs to date have involved patents in parallel litigation proceedings), what is unusual here is that the real parties-in-interest in the IPR petition are not involved in the pending cases. While the courts may not stay their proceedings in view of this IPR, it is likely that the IPR will be decided before many of these cases go to trial. If the patent is invalidated by the PTAB, Kyle Bass may claim that he achieved his goal of facilitating earlier generic drug market entry, but even the ANDA defendants may not appreciate his interference in the ANDA framework.
Good news for SHPG today. The infringement by AGN, previously knocked down, has been reinstated
@March 28 (Reuters) - A U.S. district court on Monday ruled in favor of Shire Plc, preventing Allergan Plc from selling generic versions of Lialda, the ulcerative colitis drug, in the United States until 2020. Judge Donald Middlebrooks of the Southern Florida district court said that Allergan's Watson unit had infringed on two claims of the Lialda drug patent.Lialda, which was approved in 2007 by the U.S. Food and Drug Administration, brought in $684.4 million in sales for the year ended Dec. 31, contributing 11 percent to Shire's total sales of $6.1 billion. The U.S. Supreme Court last year sent back Shire's Lialda drug patent case to a lower court for further proceedings. The appeals court had in a March 2014 ruling thrown out a lower court decision in Shire's favor over the drug that treats inflammatory bowel conditions. The district court had found that a competing product manufactured by Allergan's Watson unit had infringed on Shire's patent.
SD Florida posted its opinion this morning holding that Watson's generic Lialda infringes Shire's patent portfolio. Bit surprising given narrow claim construction mandated by the Federal Circuit.
That makes perfect sense. In addition to the ongoing buyout of BXLT, SHPG closed out their acquisition of DYAX fairly recently too.