I'm as annoyed as any other investor in watching this stock, but this is easily worth $4+. On yesterday's call, they said they will exit 2012 with at least $30M in cash.
Cash = $30M Remaining Treximet royalties: 4.5 years = $75M+ Remaining Vimovo royalties: product sales will do $40M+ next year and grow. If POZN could sell that royalty stream today, I'm sure they'd get over $20M for it. So, $30 + 75 + 20+ = 125M+, over $4/share, and they'll have submitted PA32540 to FDA.
And don't discount the PA32540. I think it has significant potential. The stock should be trading at $4 + potential PA32540.
Selling future revenues at a discount is never a good deal for the seller. Perhaps the cash position ignites interest in a buyout, but that would AZ based on what they project for Vimovo. I have spoken to Internists who are increasingly prescribing the drug, but samples and free scripts are behind much of the interest. I can't figure the reasoning past a buyout. If that doesn't happen quickly, then products in Phase 3 won't help the new cash-burn rate. Let's see what develops and who knows what. The whole of next week will reveal the unknown.
Perhaps there are two reasons. The first is definitely buyout which I think is increasingly likely. AZ needs programs and PA isn't partnered. Vimovo doing $100M in 2012 is big potential news. AZ has a weak later stage pipeline now that Targacept ran into trouble. They're going to need to lock up as much guaranteed revenue as possible. It could be that AZ has been unwilling to provide a realistic offer in deal discussions. Turning the Treximet royalty stream into cash gives a baseline figure of about $4 even before you mention Vimovo or PA. AZ tried to market their own aspirin/PPI combo at one time so it's not a stretch that they would have serious interest in PA. They know this market well.
The second reason is that Pozen thinks they were being held down because groups thought they might need to raise cash. If that's their goal then the concern is removed. Also, Pozen hasn't raised money since their IPO...they don't take dilution. This could be viewed as a non-dilutive funding event. However, they didn't really need the cash so I am again led to acquisition. The value in an acquisition goes up once positive PA results are released next year so Pozen has time on their side. The value certainly goes up next year with increasing Vimovo sales and good PA data. Then $10-12/share is starting to look like a reasonable purchase price.