BMTI is being offered 1.5 in cash and .25 of a share of Wright common stock per share upfront and then up to 6.5 a share depending on fda approvals and revenue. Currently trading at 7, the upfront payment is valued at around 6.75.
Peregrine, it looks like the total upside value of BMTI, in the short run, would be $11-ish: $6.75 up front payment + $3.50 if their bone graft thingy is approved.
Any idea what the FDA's timing would be on that? Is a decision expected soon?
A few times before, I've tried to do research to give me a hint of what the FDA would say on potential new drugs and I've always completely, completely struck out. Have you had any better luck?
Post from somewhere:
"6:34AM Biomimetic Therapeutics and Wright Medical Group (WMGI) enter into agreement to combine businesses; transaction has a total potential value for BioMimetic shareholders of ~ $380 mln, or $12.97 per share, based on Wright's closing stock price on Nov 16, 2012 (BMTI) 4.15 : Wright Medical Group (WMGI) and BioMimetic Therapeutics announced that they have entered into a definitive agreement for a business combination of Wright and BioMimetic. The transaction will combine BioMimetic's biologics platform and pipeline with Wright's established sales force and product portfolio, to further accelerate growth opportunities in Wright's Extremities business. Under the terms of the agreement, the transaction has a total potential value for BioMimetic shareholders of ~ $380 million, or $12.97 per share, based on Wright's closing stock price on Friday, Nov 16, 2012. Each share of BioMimetic common stock will be converted into the right to receive an upfront payment of $1.50 in cash and 0.2482 shares of Wright common stock. The upfront payment values BioMimetic at ~ $190 million, or $6.47 per share, based on Wright's closing stock price on Nov 16, 2012. Each BioMimetic share will also receive one tradable Contingent Value Right, which entitles its holder to receive additional cash payments of up to $6.50 per share, which are payable upon receipt of FDA approval of Augment Bone Graft and upon achieving certain revenue milestones. Wright anticipates that the transaction will be dilutive to adjusted EBITDA until the second full-year post-FDA approval of Augment Bone Graft and accretive thereafter.
Any contingent milestone payments will be paid in cash. The CVR payments to BioMimetic shareholders are structured as follows:
$3.50 per share upon FDA approval of Augment Bone Graft;
$1.50 per share upon the achievement of $40 million in trailing twelve month sales for all products contributed by BioMimetic;
$1.50 per share upon the achievement of $70 million in trailing twelve month sales for all products contributed by BioMimetic. "