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Questcor Pharmaceuticals, Inc. (QCOR) Message Board

  • choccorrico choccorrico Feb 14, 2013 11:45 AM Flag

    Buying Biovectra will allow

    QCOR to add to the bottom line,,very smart move for the company future and its PPS.

    Sentiment: Strong Buy

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    • Zero dillution since they paid cash for Biovectra plus QCOR has been repurchasing their stock anyway. All great for EPS.

      Sentiment: Strong Buy

    • Smart move..............................QCOR

      Sentiment: Strong Buy

    • //////////////////////////////////////////QCOR

      Sentiment: Strong Buy

    • I estimate (loosely) that Biovectra is worth somewhere between an extra nickel and a dime EPS in 2013. Margins in this business are MUCH lower (average 15-20%) than on Questcor's side (92%).

      There may also be another 2-3 cents in reducing (or not increasing) Questcor's costs.

      So I would put this accretion at 10 cents PLUS whatever growth can be achieved as the management of Biovectra works toward achieving the $50 million additional earn out (NOT chump change by any means). This is a multi-year arrangement (number of years???) but the simple calculation is to assume that they get 1/2 of any overage (would be very generous)...So the $50 million payout would be predicated on $100 million additional earnings...With Questcor getting the remaining $50 million (though already somewhat calculated in the above estimates). But using the $50 million (because I doubt the earn out = .50) divided by 50 million shares = $1.00 EPS over however many years the earn out is in force. Probably 5-7 but using 5 that's 20 cents a year EPS total (already includes above 10-13 cents per share).

      Sentiment: Strong Buy

    • Another piece of good news that''s going to help the PPS is that the company was charged with NO wrongdoing, shorts must be #$%$.LOL.

      Sentiment: Buy

    • They did state that this transaction would be accretive to earnings didn't they.

      • 2 Replies to reason204
      • Yes,they surely did, I bet it wiil be mentioned againg at the CC after earnings

        Sentiment: Strong Buy

      • if you research Biovectra, you find that they were in a growth pause trying to figure out how to continue their strong growth. original investors had about 45 million invested, and new contracts required 16 million for additional facilities.

        It's times like these that you;
        a) look for new investors
        b) go public (IPO)
        c) get bought

        C is always the easiest and fastest.

        Note that expected business is why the agreement includes 50 million more, based on annual sales. Questcor effectively bought out the original investors and gave them 5 million profit, then told them to put 16 million into your new facilities and if you are successful, you get another 50 million.

        I'm over simplifying, but you get the idea. There is an expectation they will continue to grow, and it's on their heads to do so.

        They were also getting close to renegotiating the Acthar contract, so ya gotta wonder how much this really costs considering manufacturing price was going to go up.

        Protecting an API process is definitely a bonus though. Won't discount that at all.

        Just saying it looks like a win-win situation (pareto optimality).

 
QCOR
93.600.00(0.00%)Aug 14 4:00 PMEDT

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