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Questcor Pharmaceuticals, Inc. (QCOR) Message Board

  • maxdad01 maxdad01 Jul 4, 2013 12:10 PM Flag

    AFFY update 4 those interested...

    Few points on AFFY. We know it all comes down to the return of Omontys (and when to a lesser extent), but here's a little more on two obvious arrangement options between Takeda and Affy:

    1. A complete buyout by Takeda gives them total and unencumbered control, BUT to the extent that there could be residual liabilities from the 3 deaths and perhaps any of the "severe" reactants, these will become Takeda's to deal with. This in turn will come down to liability insurance coverage in place by both AFFY and Takeda at time of deaths. HOWEVER, EVERYTHING I see points to Fresenius' "human error" causality. Believe buyout the most likely scenario.

    2. Establishing a Royalty Trust leaves all residual liabilities (financial and potential "damages" awards) on the AFFY side which will have to come from insurance, milestone payments and royalty streams. No current balance sheet info available post liquidations and contract/employee terminations, but it appears they have sufficient resources for the forseeable future to stay alive under Brenner Group stewardship. BUT how much liability would be carried forward into the Trust is still TBD. Believe Royalty Trust would be preferred outcome as an investor in Affymax, but not likely.

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    • Thanks MaxD--got me hooked on AFFY. Great lottery ticket.

    • All I know is I have a GTC order to sell at $12. Like you said a few weeks ago, better than a lottery ticket so why not throw some spare cash at it and wait it out. Up, down, sideways... who cares. Nothing will be decided til we know if the drug comes back on the market or not. So anything in between is silly to worry about.

      That's my take anyways...

    • The CRITICAL VALUATION POINT to both will come down to what is finally negotiated (unless Takeda walks) with Fresenius. IF Takeda is able to retain Fresenius as client the FUTURE revenue/royalty stream will be SIGNIFICANTLY HIGHER off-set against whatever concessions Takeda has made to KEEP Fresenius. This could be the difference between a HUGE ROI on both options above versus a healthy ROI. My best guess is it could be the difference between a $5-6 buyout (#1 above) and a $15 to $18 buyout (best guesses). Either way AFFY ROI from current price will be great...just a question of HOW GREAT??? And as I have discussed previously, I have to believe that the Fatality Investigation by Takeda is either OVER or all but over by now and that there have been FIERCE NEGOTIATIONS BETWEEN TAKEDA AND FRESENIUS. The good news in that is that it isn't a battle between "nothing" AFFY and Fresenius, but GIANT TAKEDA and Fresenius.

      Regardless of the "tip" I got on AFFY ($12 offer on the table, 4-6 weeks) back in June, I would still guesstimate that this is all approaching a conclusion over the next couple of months and could happen virtually at ANY time going forward. Believe yesterday's bear raid presented another opportunity!!!

 
QCOR
78.31-0.07(-0.09%)Apr 15 4:00 PMEDT

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