TAKEDA HAS ALWAYS TAKEN AIM AT AMGEN'S ESA's...$1 billion+ per QUARTER on the table for Return of Omontys
Thousand Oaks, Calif.-based Amgen seems to be holding its own with ESAs. This week, the company reported second-quarter earnings that beat estimates, although Epogen (epoetin alfa) and Aranesp (darbepoetin alfa) sales declined a little, adding up to $502 million and $524 million, respectively. Still, quarter-over-quarter sales of Epogen rose 15 percent, helped by Medicaid rebate adjustments by the February recall of competing ESA Omontys (peginesatide), from Affymax Inc. and Takeda Pharmaceutical Co. Ltd., after reports of serious hypersensitivity reactions. (See BioWorld Today, Feb. 26, 2013.)
Anybody who believes that Takeda is just going to tuck their tail, walk away from their $600 million investment Omontys and having a real shot at busting Amgen's Monopoly hit the thumbs DOWN button. Otherwise hit thumbs UP !!!
BTW (and you can factor this up OR down), IF Omontys was to take half of Amgen's Monopoly in ESA's ($2 billion per year to Takeda)...That equates to about $250 to $300 million in Royalties due back to AFFY...At 40 million shares outstanding that's about $6 to $8 ROYALTIES (EPS equivalent) PER YEAR per share (RPS) on a stock trading at $1.50 right now...Which is why I have always said that a Royalty Trust was a much better outcome for shareholders...
TAKE THIS CALCULATION TO THE OPPOSITE EXTREME where Takeda only picks up 10% market share with Omontys (1/5th of the 50% cited above)...That's $1.20 to $1.60 RPS per year....ON a share price barely over that...In other words, with this worst case scenario you'd be just about getting 100% ROI on your investment EVERY YEAR !!! This is also why I believe that Takeda will almost certainly opt for a straight up buyout of Affymax, not just based on these financials but so they have NO ENCUMBRANCES in what they do with Omontys.
Of course all of this is predicated on the return of Omontys, which I believe to be extremely likely based on everything we know today.
And we know to expect a full assault on this hypothesis, but it's pretty hard to assault the fact that AMGEN HAS GIVEN TAKED ONE GIANT TARGET TO SHOOT AT and THAT MAKES IT (in and of itself) HIGHLY UNLIKELY THAT THEY WON'T TURN OVER EVERY ROCK, EVERY DAY UNTIL Omontys is brought back!!!
if the potential outcomes are so much different with the two approaches (royalty stream vs. buy out), how would the stock owner's interests be properly represented? you mentioned before that potential law suit could keep them at bay, but that's almost a contingency, not a process. Any procedural mechanism in place to protect shareholder's interests?