It seems obvious to me that O won't be coming back to the market this year, but 2014 and beyond is another story. The FDA will want all sorts of reassurances and will probably schedule an Advisory Panel as they did with Elan's Tysabri before relicensing the drug for commercial sale. Speaking of Elan, has anyone been following the tug of war between Elan and Royalty Pharma? Currently, Elan is nothing more than a shell, trying to fend off a hostile bid while they attempt to buy pieces of royalty streams from other companies. This suggests that there is some intrinsic value in buying royalties. Other shells include PDLI and LGND (well, you could call it a hybrid shell). This does not mean that O will definitely make it back to the market, but one can be assured that if it does get relicensed, there will be plenty of suitors.
Judging from the open interest on the 2 strike calls, the shorts are well hedged going into October. After that, they're trapped (unless their fundamental analysis is spot on). I'm not worried about lawsuits from the deaths or even the shareholder lawsuits. That's what insurance is for..... unless there was fraud. So basically, I suspect that there wasn't any fraud or hiding of data. Thagt would mean more than $; it would mean long prison sentences for officers (Orwin is now Chairman) and even possibly directors.
Brilliant but, if I'm Takeda, I would buy Affy BEFORE O is reinstated. Why? Several reasons - 1) protect my substantial financial investment, 2) protect intellectual property and 3) I'd buy it at a better price - Shorts say that the market for O will be limited after reinstatement because O will be tainted. Well even a limited market will be worth millions.
I never believed in a buyout thesis and only initiated a long position after I read about the royalties AFFY would receive from Takeda if and when O returns to the market. The royalty deal is a very good one if it ever happens. There's no reason for Takeda to take over Affy due to successor liability concerns. The way Takeda's lawyers structured the deal insulates them from AFFY's shareholder lawsuits (they have deep pockets) while giving them full control over Affy's only asset, namely O. Affy's NOL could be considered an imputed asset, but only if O returns to the market. I think all of this takeover chatter from Takeda, Amgen or others is a non-starter.