Spencer Osborne and Neonfreon are talking about a billion in tax credits. Does anyone know how the full $1.2 billion in incentives from Eisai would be realized?
Longs need to understand there is over $2 billion in unrealized gains here that effectively doubles ARNAs market cap and needs to be understood
Ref. "Can Anyone Accurately Explain the $1.2 Billion Dollar Incentives from Eisai"
1) If Eisai Annual net sales are between $250M and $750M; then ARNA will get $55,000,000 in additional Milestone Payments PLUS the 31.5% portion of the net sales.
2) If Eisai Annual net sales are over $750M; then ARNA will get $55,000,000 PLUS ARNA's percentage will increase from 31.5% to 36.5%; that is an additional 5%
The way the contract stands today the ADDITIONAL Adjustment Milestone payments is accumulated every year until the total reaches the $1.19 Billion mark. Beyond the $1.19 B and with a STEADY net annual sales over $750M of Belviq my guess is that , Eisai will be willing to Amend the contract to replace the 31.5% with 36.5%
The above breakdown is independent from the carry over of $1.3 B Net Operating Loss (NOL) that are for the SOLE benefit of ARNA's tax deductions on Earned Profits PLUS the 10 year Tax Holiday on the manufacturing plant in Switzerland.
Arena has about $1.3 billion in NOLs. In simple terms, the company can make $1.3 billion in profits and not
have to pay taxes. If you consider a corporate tax rate of 35%, the tax savings attributable to these NOLs is in the neighborhood of $450 million.
$1.3 B NOL net operating loss........... this is money they spent when they weren't making anything and can carry it forward for tax reasons....... when they start seeing real money they can apply those losses against profits to lower tax bill........ more pps as they have a higher net profit in a tax year.... also I don't know how this part would work but if BP were to buyout the company they would also be buying this tax break so the offer would have to count that and an offer would be higher not just based on sales and the value of hard assets
At December 31, 2012, we had Federal NOL carryforwards of $623.5 million that will begin to expire in 2023 unless previously utilized. At the same date, we had California NOL carryforwards of $742.8 million,which will begin to expire in 2014, and foreign NOL carryforwards of $103.3 million, which will begin to expire
in 2013. At December 31, 2012, approximately $5.8 million of the Federal and California NOL carryforwardsrelated to stock option exercises, which will result in an increase to additional paid-in capital and a decrease in income taxes payable at the time when the tax loss carryforwards are utilized. We also had Federal and
California research and development tax credit carryforwards of $28.7 million and $27.7 million, respectively.The Federal research and development credit generated for the year ended December 31, 2012 of $1.7 million is not included in the Federal research and development credit carryforward, as legislation was enacted in January
2013, which retroactively extended the research and development credit back to January 1, 2012. Therefore, the2012 Federal research and development credit will be included in the Federal research and development credit
carryforwards in 2013. Federal research and development credit carryforwards will begin to expire in 2025 unless previously utilized. The California research and development credit carryforwards carry forwardindefinitely.
Sections 382 and 383 of the Internal Revenue Code limit the utilization of tax carryforwards that arise prior to certain cumulative changes in a corporation’s ownership. The Section 382/383 analysis for Federal NOLs with
respect to potential ownership changes was completed in 2010 and, accordingly, the Federal NOLs that are available to be utilized are included in our deferred tax asset schedule. We have reviewed our changes in ownership for Federal NOLs through December 31, 2012, and have not identified any additional changes. We
have yet to complete a Section 382/383 analysi
Sentiment: Strong Buy
$65 MILLION due approxiamtely June 7th, $1.16 BILLION still eligible, based on annual sales. theflyonthewall.c*m/permalinks/entry.php/ARNAid1829069/ARNA-Arena-to-receive-M-in-milestone-payments-from-Eisai-related-to-Belviq
If you are correct (who knows), it is only a tax credit, it is not income. Let Arena prove something first, don't worry about tax credit, that may or may not be there. There is a disbelief that Belviq will generate enough business, hence the stock that has stalled and has went down over the months. Big players want more proof - getting DEA approval just wasn't enough for these people. We can disagree, but that is the reality or this would be 15 already. If there is disbelief by these big players, that could tell you a few things, but if it can prove it can sell this product, the stock should really jump. It is up to Sale's to do there jobs. To me, this is an investment, which should be treated that way.