Having spent most of my working career in Big Pharma I learned one thing: to hate and respect TEVA. Nobody knows the exclusivity business better then they do. THIS IS WHAT TEVA IS ALL ABOUT. Their people look at every single angle and if a patent portfolio can be broken they will most likely know it. No Big Pharma makes their living on breaking patents. ONLY TEVA is the eight hundred pound ape in the room that does breaks patents for a living. If they are willing to pay for the right to market Vescepa they know the patent portfolio is strong and probably through 2030. Being a successful generic house is not easy. Fighting for the right to be the first on the market with a generic for a lousy 6 months exclusivity is nobodys "free Lunch" and as soon as the other generic houses come in the price can be driven down to pennies. If you jump a patent the penalties can be in the billions. Teva must be salivating at the prospect of obtaining a product like Vescepa. I suspect they will push the bid price well past $25.00 dollars with or without NCE. They know better then anybody that Amarin does not need NCE, never did. I frankly believe a deal can be worked out inwhich amarin share holders get a rebate on NCE if it comes through within lets say, 6 months of the buyout. There should be no way this stands in the way of a serious bid. Now if you already own Amarin stay in, you can't loose. For the rest of us what is the best move. Do we wait and hope the price goes lower for a better entry price or do we jump back now. Trying to go it alone is going to be tough. It may require more dillution of the stock with the issue of additional shares. Here is where we have to trust Joe Z. I have to say he has done a masterful job of crafting these patents by bringing in experts in the field. For me I think you buy some shares Monday morning and wait on the announcement. IF NO ANNOUNCEMENT IS MADE BEFORE THANKSGIVING buy as much as you can the last trading day before Thanksgiving. He is probably going to sell sometime after Thanksgiving. If he does announce a GIA wait on the market to react and buy a little more, but in small increments. If he issues new stock you will see it driven down much more. You don't want to be all in if he has to dillute the stock. However, remember what he said. Hiring a sales force will not preclude a sale at anytime. Still, buy in small amounts. My hope now is that an announcement is not made on a buyout before the the market opens Monday morning. You can bet there will be negotiations over the weekend. I will make my first buy back Monday at sometime depending on market reaction.If you wonder why I post of my ideas it simple allows me to think through my ideas and get your ideas. Very frankly, I played it all wrong on Amarin. I was all in too early and had to sell out in hopes of a buy back at at a lower average price. I'll soon see if it works out.
While I believe Teva is very much a potential suitor, the timing of the next few days may not be in the cards. They're an Isreali company, and as we know national security is a bit precarious right now. The next week or two may not be the best time for them to launch a buyout if the country is on edge with hostilities heating.
Without meaning in any way to minimize the gravity of the situation in Israel and Gaza, it seems to me that Israeli corporations have long ago gotten used to functioning in their tinderbox geo-political circumstances much like the British did during World War Two.... Those who aren't fighting are carrying on their daily lives and commerce because to do otherwise is to admit an enemy has prevailed.
TEVA may be an Israeli based company, but they have their pharmaceutical work to do regardless of the fighting. Then too, Amarin is based outside the Middle East and will be able to conduct its business in more secure locations and thus add value to TEVA's stockholders even if all hell should break loose in the Middle East.
My two cents, shillings, shekels
Sentiment: Strong Buy
No BO before next OB update, since 2 full weeks in Dec is only Dec 14 is early in month for OB update, they will wait, they will hire sales force, start full training mid December as mentioned meaning no real sales expense until after next OB. While true TEVA would offer without NCE other BP would be easier to get consensus if they got an answer on NCE. Makes no sense to take TEVA offer now when positive NCE, which is more likely than not can create a bidding war. Even no on CE will be easier to get BP to get a consensus within their companies on a value. As much as another month wait is a depressing thought I see nothing that would make sense for Joe to sell now when launch expenses won't ramp up until after next OB.
I suggest selling the next OTM weekly Puts up to the week of the 14 th and then playing the OB update as you see fit. I'm in the camp that they really need NCE decided to get the BO done. After Dec update they need to ramp up for launch so if they will sell without NCE decision I believe it would be from Mid December to Mid January and not before.
So a buy out can occur at any time.
We all agree that 3 or 5 years makes little to no difference.
FDA response is unknown - though more likely within 30 days
Stock price will go down based on what we believe will be the market reaction to an unknown event, in decision and timing.
Conclusion: You are trying to read the tea leaves and are guessing. Much like Adam, 50 percent right, 50 percent wrong.
Does anybody remember the good ole days prior to 2000? Remember buy and hold, patience, long term investing? Remember trying to time AOL, or MSFT or YHOO in the late 90's? Or how about AAPL in the 2000's? GILD?
Who's to say that the NCE decision isn't already priced in? 50/50, nobody knows.
A 3yr NCE is priced in already! I still think a 5 yr is possible, however, I'm not as confident as say I was 3 mos ago. IMO we will be bought out NLT 11/30/12 @ $20-$25 without a 5yr NCE or $25-$35 with a 5 yr NCE. AZ and TEVA are probably in negotiations RIGHT NOW! They had rather do a BUYOUT right now! If they do a BUYOUT right now it's cheaper and they have the patents and a 3yr NCE which IMO is more valuable than a 5 yr NCE and no patents. AMRN legal department needs to be applauded for what they have accomplished....the patents are where the real value is! GOOD LUCK GUYS and GUYZETTES!
Sentiment: Strong Buy
I like your thinking nm. I was going to pull the trigger on buying more shares today, but the pps only dropped 5%, I was expecting a bigger move to buy shares on the cheap. Let's see what Monday brings.
If they announce GIA over the next week, that may be the best time to make a large position. I would add on Monday regardless.....honestly, anything sub $11 is still very attractive.
yes I agree TEVA is eager to get into the Rx Omega-3 business. Just google "TEVA loses case to sell generic Lovaza" which was back in May this year. I believe the market chatter is right it will be between Astra Zeneca and Teva for Vascepa.
nm10066 you are SPOT on my friend. TEVA knows that $25 is a great BUY...forget NCE! The patents and the product are worth billions in revenue! It would not surprise me to see a BUYOUT monday morning!
Sentiment: Strong Buy
nm10066- nice job of explaining Teva's approach in this pharma market. surprised you didn't jump back in when the mini bear raid occurred today when the delay on the nCE decision was posted but looks like you are primed for a re-entry shortly. Selling puts today could have made you some money and lowered your entry price as well. You could have sold covered (or naked) calls expiring today and made lots of money if you had the kahunas for that sorta thing. It was a very strange day with huge options plays that got devastated if you bought them.
I intend to simply hold my shares and wait it all out and sell covered calls on a weekly basis right now. I do expect to see 24-28 by January (or sooner) if there is a B/O offer.
No ruling on NCE is not all bad. Without a ruling the generic compitition really does not know what their next move is going to be. I do think now the FDA is waitng on certain patent approvals. Mr "Rossman said that NCE was all about the patents. I believe the delays are proof of his logic. Remember the FDA can be sued on an incorrect ruling. The ruling on the patents may be necessary for them to make a successful defence of their decision.