the headline" Takeda and Affymax announce, Omontys is coming back", before you had a chance to look at the PPS, how would you react?. What price do think you would see for the PPS?. I personally think that in that scenario, I could be looking at a PPS of 8 and skyrocketing like crazy. If it's the royalty route, then to be quite honest, no one can predict in the buying frenzy how high it go. When people see a potential revenue stream for a decade or more, without laying a finger, the PPS could get out of control.
Fog, could it happen? IMO yes.
Something, however, is clearly rotten in Denmark...Let me explain.
Just prior to the voluntary recall, Fresenius contacts AFFY and says, hey, we are experiencing a lot of reactions. Can't explain it.. This, of course, on the heels of AMGN THE GIANT losing coveted ground in this war. Hmmmm. Then, Fresenius has a clump (a cluster might be a better word) of reactions, and deaths. Drug pulled voluntarily, which is the RIGHT thing to do to stop litigiations from hammering you if you continue knowing that something is, well, not right. AMGN takes off !
AFFY immediately makes the statement (Orwin does, on Feb 26-ish) that they are looking into manufacturing as the cause, BUT that clearly this cannot be explained by the manufacturing of one particular lot.. In this deal between AFFY and Takeda, which partner bears the responsibility of manufacturing? Takeda...
AFFY, however, bears the full brunt of the brutal selloff.
Takeda has on its back the 800 lb gorilla, i.e. billions in bringing the drug to market, millions of institutional shares looking out for their interest, and litigations buzzing around the conference room doors looking for an "in" to the future sales. Oh, and AMGN crossing their fingers.
Look, bottom line: Orwin said early on that the problem lies in 1) manufacturing, 2) distribution, 3) supply chain, 4) handling (at Fresenius, etc.. But he never says that Omontys itself, and proved through the trails, is the fault,
AFFY can't just say, "see ya..BK."
Firstly, they don't have that right without the backing of the owners, or they would have the fight of the century on their hands. Secondly, we are talking about such HUGE money, and money speaks. Listen, when I say something is rotten in Denmark, I might mean something is rotten in AMGN... You never know.
I have definitely processed similar scenarios of an Amgen driven event, up to and including a side deal with Fresenius. And I guess it could be possible (but less than 1%) but not likely because that level of corruption would become obvious enough to cause all kinds of federal investigations and, if true, would result in a multi-billion lawsuit and one which would be TOTALLY VISIBLE.
I do have a much different theory of what took place after the recall. I believe the large institutional holders of AFFY getting caught flat footed by the recall (and furious) had serious discussions with Takeda and realized that AFFY as an operating company was totally worthless, but that Omontys needed to be back in Takeda's hands with a significant recovery to their investment positions in Affymax. And given Affymax's then tenuous market position they orchestrated (bringing in Brenner) a well constructed deconstruction of Affymax the operating company while maintaining (for the time being) the financial integrity of the instrument (i.e., NO bankruptcy) until Takeda completed the investigation (which I believe they suspected from the get go was not going to be an Omontys issue...stats heavily weighted that way)...and then Takeda, with Brenner, very methodically started putting all the pieces in place (taking time to get it done) for synchronizing the return of Omontys under Takeda's complete control while satisfying the large institutions demands for restoration.
There is additional info that Takeda wants to take out Amgen in the Nephrology Anemia Rx space completely...just do a little research and you'll connect those dots too.
All the various pieces of this complex puzzle are slowly and methodically being reconstructed with Brenner and Takeda being very careful lining things up and putting everything back in place to return Omontys and reconstruct the value to shareholders and work thru necessary arrangements with Fresenius. Have never been more confident.
Do you think, they will give up a successful drug with billions of dollar potential, just because of a few bad events? No, no company will do that. The drug will come back to the market with those problem solved.
Sentiment: Strong Buy
Pay, when we get the good news and I believe it's coming soon, the PPS will explode. Anyone that got out or was on the sidelines, will look at the price and kick themselves for hesitating.. Affy as a company is done but if no buyout and I am inclining against that now, a royalty trust company that gets money every year, year on end, is a very lucrative proposition and something that many will want to be part of. This really could be a chance of a lifetime. Even if you don't want to wait for royalty payments, the PPS could just go crazy. Anyone that holds 10k plus more in shares will have a huge income coming to them every year,GLTA.
Sentiment: Strong Buy