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  • jonasmoses11111 jonasmoses11111 Jun 14, 2012 12:43 AM Flag

    AVNR Value to Big Pharma

    Let's just try this again. . . . AVNR's current approximate $400 Million Market Cap is completely ridicuous. The 24 Million Short Shares truly are stuck.

    Institutional Holdings have gone up to approximately 100 Million shares with Fidelity and Magellan adding several additional million shares. Fewer and fewer shares are in Retail hands. That is why the BASHERS are here.

    IMHO, any AVNR Buyout today will necessarily end up being minimum $12 PPS ($1.5 Billion Market Cap or higher or it will not be acceptable to the TUTES!

    AVNR will be sold when TROWE, FMR and INGALLS want it to be sold. JUST like HGSI. Of course, they may prefer the QCOR route!

    AVNR already has a run rate of $45 Million in approximate annual U.S. only DQ revenues today. EU approval is on the way basically when AVNR wants it from a timing standpoint.

    BIIB trades at 25 TIMES Earnings. Big Pharma's OPEX will increase immaterially upon any acquisition of AVNR as they already have all infrastructure in place to go ROW.

    BIIB's 25 PE x AVNR's existing approx. $45 million in Revenues = A $1.12 MILLION immediate increase to MRK's MARKET CAP TODAY. This is based SOLELY on what AVNR already is generating internally from Nuedexta sales for PBA in the U.S. only WITHOUT taking into account any additional value for:

    1. Continuing week over week future U.S. growth to $300 to $500 Million or more based on PRISM Only 1% of market penetrated - 37 to 39% of multiple diseases;
    2. 100% of European Union growth;
    3. 100% Rest of World Growth:
    4. MS, ALS, Diabetic Pain Trials and MULTI-BILLION Worldwide Neuropathic PAIN and ALS AGITATION Opportunity;
    5. D Dex Opportunity to strengthen dosages for pain without increasing Q and/or even decreasing Q with new and continuing rolling exclusivity and patent periods;
    6. Potential Anthrax royalty revenues;
    7. $90 PLUS MILLION in CASH on HAND; or
    7. Ongoing ABREVA royalties etc.

    If BIIB believes that its own Worldwide existing Sales force already in place can generate $300 to $500 Million in 3 to 4 years, then AVNR is worth MULTIPLE and MULTIPLE BILLIONS..

    Why do you think they have not made offers. IMHO, they have and will continue to and that is why the PPS is where it is. YOU would and WILL NOT KNOW until a definitive written agreement is accepted and approved by AVNR's Board.


    LOOK AT HGSI. SAME TOP TWO TUTES (FMR and TROWE) REJECTED A HOSTILE. They will do so here TOO.

    WHY???? IT IS way way way TOO CHEAP. They want QCOR over the last 5 YEARS. IT is all about EARNINGS GROWTH RATE TO BIG PHARMA.

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    • Jona, spot on! Give it time!

    • Depomed values Xanodyne's drug at 1.36 times trailing revenues (paid 25.9 million plus possible milestones for a drug that did about $19 million in sales in sales in the trailing twelve month period.
      So Depomed is not multiplying the drug's revenues by Depomed's PE ratio.
      Depomed hardly multiplied at all
      (only by 1.36).
      This supports my thought that Avanir is worth about 2 times likely net Nuedexta revenues to an acquiring company (after the uncertainty of the patent litigation is gone). This assumes the uncertainty of quinidine doesn't dissuade a potential acquirer.
      Notice also the article mentions only net sales of the drug, not gross sales. This is as it should be in analysis, I think because the amount of drug given away for free does not have much market value.

      "Depomed announces acquisition Of Zipsor (diclofenac potassium) from Xanodyne Pharmaceuticals (DEPO) 5.14 +0.05 : Co announced that it has acquired all rights to Zipsor (diclofenac potassium) Liquid Filled Capsules from Xanodyne Pharmaceuticals, Inc. Zipsor is a non-steroidal anti-inflammatory drug (NSAID) indicated for relief of mild to moderate acute pain in adults. The product uses proprietary ProSorb delivery technology to deliver a finely dispersed, rapidly absorbed formulation of diclofenac. Zipsor, which was introduced by Xanodyne in 2009, achieved ~$19 million of net sales in the 12 months ended May 31, 2012. Depomed acquired the product in return for $25.9 million of cash and potential milestone payments based on sales of Zipsor and assumption of certain liabilities."

    • "AVNR's current approximate $400 Million Market Cap is completely ridicuous."
      Obviously the stock market does not agree with you and they have not agreed with you for a long time.
      Should cause you to reexamine your wild assertions.

    • The Truth Shall Set You Free:

      Avanir has "no" earnings they are losing money every quarter.

      The outstanding share count has grown from 87 Million Outstanding Shares to 140 Million Outstanding shares since September 2010 knocking almost $2 off the share price.
      $400,000,000/87,000,000=$4.60
      $400,000,000/140,000,000=$2.86

      The analysts that had $12 to $15 price targets after approval within 12 months they all lowered their priced targets to $3 to $6.

      Recent Quarter Financial Results:
      Jan-Mar 2012 $26.5 Million in Expenses, $17 Million in LOSSES

      Oct-Dec 2011 $22.8 Million in Expenses, $15.9 Million in LOSSES

      Jul-Sep 2011 $22.5 Million in Expenses, $17.9 Million in LOSSES

      Apr-Jun 2011 $18.4 Million in Expenses, $16 Million in LOSSES

      Weekly Scripts (Declining)
      May 18th: 2060
      May 25th: 2056
      June 1st: 1984

    • Yes the current valuation is truly ridiculous. The shorts are stuck. Moses thank you for the summation.

    • Thanks for your summation. Enjoyed the read.

      • 1 Reply to burgoo
      • The list of companies that have a newly approved drug that has not been partnerd or bought out, the last few years, you can count on one hand. I believe strongly that big pharma is talking to them and that they are delaying what will be inevitable in time. The longer they wait, the bigger the price tag, business developement knows this. Remember it is hard to do a hostile take over in a biotech and the difference between hostile and friendly is a matter of price. There is too much meat on this bone so I am exspecting something will shake this year, and I believe the likely hood is almost certain. Yes some longs are hedged short, but we are not seeing any evidence of large crosses that lead me to believe it's as big as some here assume. A lot of risk has left this trade, so it's hard to see why they would be that hedged at this time, look at the volume today, a 100,000 share buyer will push this to 2.95. It will be a difficult cover for the unhedged if we get a binary event such as a partner, right now the short side is playing a game of chicken both hedged and short.

    • The shorts are not "stuck"...why is this absurdity repeated so often?

      What do you think the largest un-hedged short position is?

      Shorts will only be "stuck" if there is a simultaneous rush to the door...in the mean time any one position can exit any time they like with minimal pps effect.

      • 1 Reply to onlyfactsplease
      • Everyone wants to blame the shorts because things are not going well. Let's get this straight they are not stuck, nervous or going to cover anytime soon. There is a reason we at the same share price as a year ago which is below pre approval levels. Sales are not stellar as some claim on this board. The money will come from the pain indication if the studies pass FDA. The current sideways trading will continue for the forseeable future.

    • Interesting post on valuation. Must be at least 3 large pharmas circling Avanir. IMO Peace and enjoy the ride.

 
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