As a long term holder of VRTX I have come to the conclusion of the honorable thing for VRTX board to do for shareholders is to officially put VRTX on the auction block for the best offer which would hopefully be better than present pps. I believe VRTX mamagement and the board with all their good intentions have not been able to manage this company properly. One of the reasons VRTX has lost so much of its pps is due to the fact that, the board, the management, the scientific officer, and the medical officer became complacent and too sure of themselves about the HCV franchise. They were so cocky about bringing INCIVEK to market that they thought they were the only geniuses on this earth to bring about such a what they thought was a wonder drug to the market. That is why they lost the site of looking for better drugs like the competition Pharmasett, ABT and others did. They failed miserably when did not see the value of Nucs. It is preposterous that with all the bloated number of scientists they had all over the globe they did not initiate a Nuc program to at least keep pace with all the others who were doing so like pharmasett. ABT, IDIX, etc, etc. As I have said before out of desparation they had to partner with Alios for 2200. The problem is that was too late in the game. I firmly believe the pps plung is due to the fact that investors believe VRTX is behing with its HCV development and GILD and others will become the majors players and leave VRTX behind.
Meanwhile with dwindling revenues the VRTX incompetant management and board continues to burn cash on thousands of employees that are not needed. Why in the world do you need all of these people when for all realistic purposes you do not have funds to develop whatever miracle drugs they discover in a test tube?
I think you will be happy if data from 661 makes the stock pop 20 dollars, which hopefully it does in q1. That being said, do you know if there is a poison pill? As well, whats the best SVR24 data with the all oral GILD regimen. Being a physician, there is no way that the HepC market is really that big, maybe if ObamaCare comes to fruition in 2014 more indigent people can get covered for this expensive therapy. The value of VRTX is the CF platform, and trying to ride a diminishing wave of Incivek to fund the research to do so. VRTX won't be bought.
Sentiment: Strong Buy
I'd like a 20 buck pop as long as the stock isn't at 10 when it happens. others on this board have said vrtx has a PP in place for a hostile takeover but I agree that nobody will buy them out now. They need a new drug on top of what they are doing now to even get a chance at someone looking at them. At 13-15B, not many can do this and won't right now. VRTX just has to discover stuff on their own and move fast before their income stream dies off.
Folks, how do we do an Open Letter so ALL shareholders can see? Reason I ask, let's be realistic, current mgmt will never sell company. If you hear I Smith CC, this is the SECOND time in TWO years he praised a competitor. A person like this can never work elsewhere. As long as mgmt is on the gravy train, they will not give up what they have.
I have repeatedly sent a letter to management and investor relations in the last two months - to which i have gotten no reply.
One major question is... with a loss of 58 million for the quarter, is 27 million in stock based compensation expenses appropriate? That's right folks... half the loss last quarter was a pay day for management. Sounds a bit like bankers paying themselves bonuses on bailout money - disgusting.
Sentiment: Strong Sell
I agree with you and I echo your disappointment. I would love that BigPharma purchases the company so we are done with the roller coaster of Vertex and management that doesn't have any accountability. The question is what price BigPharma would pay for Vertex. This are my calculations based on the potential value of the assets
1.- Incivek: $1.8 Billion
2.- Kalydeco: $5 Billion
3.- VX-809: $1.5 Billion
4.- Other correctors: $200 million
5.- Jak-3 inhibitor: $2 Billion
6.- Influenza: $100 million
7.- Other assets: $300 million
8.- Cash: $1.3 Billion
Total: $12.2 Billion
So, if anyone comes along with an offer in the range of $55-$60/share, I much hope they sell off the company right the way ... I will certainly vote for that as a long term shareholder!
Of course, $12.2 Billion is not pocket change, so not many companies can be suitors for Vertex, unfortunately.
I will spare the break out, but I would add my estimate places this between 5 and 6 billion. There is no way Incivek is worth 1.8 billion... maybe 400 million. Kalydeco as it stands is with around a billion, not five. So on and so forth. I get this figure off of a DCF analysis... so the range is based on playing with assumptions.
Conveniently, this places this stock at around $25 per share, which on a technical analysis, it appears that this is where it is going.
When you have a (1) negative trend (2) Analysts saying sell (3) No near term positive catalysts (4) falling revenues (5) Increasing expenses (6) and increasingly lower and lower valuations... well there you go.
Sentiment: Strong Sell
gild bought out pharmasatt for 11B or so it's possible but I forgot they had drugs that work well and not just average. doubt vrtx gets bought. like you said, mgt is milking the cow for free. why pay for it. been down that road already. mgt gets options, pay, bonuses and perks. they float down the river till the river dries up and then they move to greener pastures. the little workers go on UE and suffer.
yeah at what price will someone buy? I don't think that if VRTX hits $15, will anyone buy it at $20. it's probably seen it's better days and I'm going to lose a lot of money on this joke of a company. GILD is eating it's lunch. the market said it's junk going from 60 to 40 and now the next leg is to the 20's. Should have never averaged down in this trash. Last time I do that.
Sentiment: Strong Sell