The takeover of ARNA will be different from other biotech companies. Because of blockbuster potential, the large pharma buyer will want to buyout ARNA after a positive European resonse but before ARNA deploys BELVIQ to the general population in the United States. The large phama company does not want to risk ARNA becoming a blockbuster before they aquire it because the price tag for ARNA would go up substantially. 8.8 billion dollars with be the area of an acceptable bid...However back and forth offers will occur between ESAI and its competitor with the winning bid going to the copetitor.
You will start seeing in the press next week buyout rumors that will heat up fever pitch until there is a winner - only then will it be official. The big interested pharma "will not" -repeat- "will not" let Belviq be deployed and will do everything within their power not to let this happen until they own it. Good luck longs and I look forware to a great next two weeks!
I hope that at my age which is close to JACK L that this company can return to shareholders D's! High fives to Jack for getting partner agreements,would love to the growth potential with some money every QTR,unlike APPLE,get the money in the people's hands!
Sentiment: Strong Buy
Not a chance this gets bought out before they prove they can sell the drug. Everyone is jumping in the streets because vvus is doing poorly. We should be routing for them to sell their drug because we want ours to sell as well. There is room in the market for both drugs and big pharma is going to want to wait to see how this goes after vvus slow start before they think about a buyout.
that is 1 line of thinking, the other line of thinking is that vvus sells a drug with undesireable side effects, they have no partner, no expertise in marketing. without those disadvantages, and with the fact that belviq + phen makes qsymia obsolete there are good reasons vvus is not doing well and arna will do very well.
I have reaped huge profits in ARNA's run from 3 to above 10, so I am a believer in Belviq. But I am also realistic. Nine analysts (9) have looked at 2013 revenue potential and placed it between $34M and $173M. The $34M estimator is brain dead, but given that nobody sees more than $173M in sales, Big Pharma is not going to pay four times the market cap (your figure of $8.8B) until there is much greater evidence of blockbuster sales potential. If Big Pharma bought ARNA with a hostile bid before sales rolled out, as you speculate, the price would not be higher than $4B, or around $20 per share. And if European approval puts ARNA at $12, a 75 percent premium with a $20 bid would not be easily rejected. JMHO.
I think you are dead on, and why wouldn't Jack do what you suggest? He can get more money by incorporateing partnerships for different areas over time than he could with a one-time buyout offer.
Sentiment: Strong Buy