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Affymax, Inc. (AFFY) Message Board

  • shabamoon shabamoon Apr 13, 2013 2:19 PM Flag

    BK not an option or even possible; Tax loss + Milestone + royalties worth few BILLION.

    Remember how we dropped way below $1 on Thursday, after the latest Takeda agreement was announced, only to rebound back above it? Do you think that was a coincidence? Of course not.

    Yes the web site is down but Takeda's is still up and they continue to advertise Omontys as one of their top products on their site.

    Now lets see how much is Affymax worth to a deep pocket like Takeda TODAY: about a billion or so in tax loss that Takeda could use every penny of it of they owned Affymax outright; Takeda has to pay milestone of $180 million to Affymax which would be nulified if they owned Affymax; and Takeda has to pay Affymax BILLIONS over Omontys's lifetime in royalties which would also be nullified if the bought Affymax.

    Now do you think Takeda would allow another deep pocket such as Amgen take Affymax over? Not in a million year if they could help it. Could they be a behind the scene horse trading and betting war between Takeda, Amgen, and possibly others? Very likely.

    But lets just take one of the numbers above and lets say we try to price Affymax just based on the milestone of $180 million; Lets also presume that $30 million is spent on administrative costs to collect that amount (note that Affymax's current cash and goodwill and asset values were not even included in the above).

    Based on just 150 million above the shares are worth north of $4. Now lets include about $800 million or so in tax losses to see what would be the value of Affymax to Takeda solely based on these 2 items (800 + 150 = 950). These 2 alone would value Affymax from Takeda's perspective to around $24.

    You read that right. $24....And that does not include potential billions in royalties, which from where I stand is a cash cow at no cost to Affymax and where Affymax's main value lies, or its current cash, goodwill, etc...

    And why no bk is coming or possible? see the next post.

    Sentiment: Strong Buy

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    • All I here is chatter from TheGayBox what the heck is a factoid and what grown up considers a company name to be far fetched LAFFY to funny. I guess there isn't too much humor in that is it.

    • DoofusMoon,

      "A little knowledge can be a dangerous thing". That applies here. You know a few factoids but you do not have all the information. This leads you to erroneous statements and horrific financial decisions.

      1) The tax laws have been changed so that the tax losses can't be used by a purchasing company. Not sure if this is true in Japan or not.

      2) You state $180 milestone as if it were a given. In fact it is based on the extremely unlikely scenario that O gets back on the market and sells very well.

      3) Amgen would never be allowed to buy LAFFY because of monopoly rules prohibiting such a purchase.

      4) If there were things such as bidding wars, likely royalty payments, valuable losses which other companies would purchase (NOL) then the company would never have gone through all the steps of canning virtually every employee, putting out statements about BK, removing their web site (the biggest RED FLAG in history). This makes them look weak, to say the least, and they would never do that if they were trying to be bought out by another company.

      5) Any buyout from Takeda will not be based on what you think of as 'fair' but on the lowest price Takeda will have to pay. For a company like LAFFY they are literally in no position to bargain, since they are literally facing BK any day as creditors and lawsuits besiege the few remaining people.

      Let me spell it out for you again. Orwin is going to hand off all of LAFFY to Takeda for a song. I have previously predicted $10 million and I stick by that prediction. Why? Because Takeda is going to give Orwin a nice golden parachute (or call it whatever you like) for about $2 million. That is my prediction. Thank you. Good luck to you in handling this situation. TGC.

    • Agree, something good cooking

    • Completely agree.

    • This exactly what I was thinking but had not put them into words. I also think that potential value of AFFY to Takeda runs into billions and no way they will let it go.

      • 1 Reply to jim_ghorbanian
      • The tax loss should be considered at a max rate of 35% it is only 280 MLN value for a buyer in the best case scenario.

        No way a BK is possible,

        The short momo's should know,

        in a BK court, Takeda will be in line to Bid for the assets like anyone else.
        Moreover their existing agreement will all be nullified.

        I presume a sabotage by AMGN it is truly possible, they wanted to retain the monopoly in this business. If Takeda really knew it, then AMGN will be potentially sued for 10's of billions of $. Some mole in of the clinics may shed some light.

        After considering all the possibilities, I really don't think Takeda will buy them out right now since AMGN can step up the Ante. They can counter bid for this and stall any of the Takeda's plan.

        The latest move by AFFY to close its operations is a very wise move, those in the know, knew it all, Takeda folks did most of the leg work, any problem they always has to go to Takeda for a resolution, that is why winding down was / is a necessary thing here. For Takeda it is just another product in their portfolio, they avoided almost 300-400 MLN expenditure at AFFY's place, no point in keeping the door open.

        Buy and hold, whatever is received from Takeda will be distributed directly to AFFY holders by way of dividends. 180 MLN milestone payments, 200-400 MLN possible royalties ($6-$11) per share for the foreseeable future (14 years left), it is indeed huge sum of money.

        GL!

        Sentiment: Hold

 
AFFY
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