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Avanir Pharmaceuticals, Inc. Message Board

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  • jeanwekillstoxx jeanwekillstoxx May 5, 2012 1:48 PM Flag

    I'm feeling a Buyout....

    You idiot. The reason the price is where it's at is because of dilution.

    Even you are smart enough to realize the difference between having 30 million outstanding shares in 2006 compared to having 137 million outstanding shares in 2012.

    Let me help you out donkey!
    $450,000,000 divided by 30 million shares = $15 per share
    $450,000,000 divided by 140 million shares = $3.21 per share

    Let's say for some reason a company is willing to fork over $1 billion for this company. In 2006 that would have been a beautiful thing.
    $33.33 per share buyout
    2012 not so hot but still a move up from where we sit today.
    $7.14 per share

    The thing is they probably could have had $6 per share in November 2010 but the CEO squandered that opportunity away and in the meantime has shown that the drug doesn't sell and the potential that was shown in the surveys was all a crock of bs.

    Why would big pharma possibly fork over $1 billion for a company with one approved drug that is a combination of generics in the midst of patent litigation?

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    • I agree with Jeanwe's pointing to the market cap.
      In 2010 if there were 30 million shares at a price of $17 (reverse split adjusted) the market cap was $510 million and maybe the stock was a little ahead of itself.
      Now it's been shown the market is much smaller than the company has led the public to believe, Nuedexta has had a very slow launch, off-label pain use has not occurred to any material degree and patent challenges have occurred.
      Now the market cap is almost $400 million which is probably about fair until more positives are shown.
      In addition to the patent launches, I assume
      that large drug companies also know that there is probably a small risk of torsades and other ventricular arrhythmias even from the 10 mg dose of quinidine since it does prolong the QT interval slightly but significantly and quinidine is the poster child for fatal pro-arrhythmic effects. A few cases of that, even if Nuedexta is an inocent bystander, could adversely affect future sales to a large degree.
      So I understand why Big Pharma may want to wait on a buyout until much more use (like a few hundred thousand person-years of use) has occurred and pro-arrhythmic effects have not been reported and until the patent infringement lawsuit gets settled.
      Meanwhile, as the launch continues to go slowly, Big Pharma has larger negotiating power in whatever bid it might want to make, using the small drug sales as justification.

      So Trade, I think you'll have your wish and Avanir will have to prove its worth, remaining independent at least until December, 2013 when the patent infringement case will probably be ruled upon (and probably longer than December , 2013 as more about the drug and its likely sales becomes known).