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Insmed Incorporated Message Board

  • fudfighter4 fudfighter4 Nov 21, 2012 8:51 AM Flag

    Selling the goose that lays the golden eggs

    I do understand why many here believe it likely Insmed will be snapped up by a big pharma long before it can reach "leading biotech" status. But my gut feeling is that acquisitions are comparatively rare occurrences, and usually occur only if the company being acquired either wants or needs to be acquired (when the leading shareholders want to sell the company).

    Even a market cap of $15 billion would still be lower than that of the following sixteen companies, assuming their market caps are not currently lower than at the time I collected this data -

    187,633,438,080 - Pfizer, Inc.
    187,396,076,770 - Johnson & Johnson
    152,400,000,000 - Novartis AG
    138,941,731,840 - Merck & Company, Inc.
    108,723,459,520 - Abbott Laboratories
    098,240,400,000 - Novo Nordisk A/S
    059,202,172,149 - Astrazeneca PLC
    058,543,441,250 - Eli Lilly and Company
    055,260,300,000 - Bristol-Myers Squibb Company
    033,832,270,080 - Celgene Corporation
    027,767,307,680 - Allergan, Inc.
    027,507,112,480 - Teva Pharmaceutical Industries Limited
    021,466,230,210 - Alexion Pharmaceuticals, Inc.
    018,272,100,190 - GlaxoSmithKline PLC
    016,936,264,560 - Valeant Pharmaceuticals International, Inc.
    016,287,292,320 - Shire plc

    And while it's true that everything has its price, the insider and institutional shareholders here who would likely have to support such an initiative for it to succeed (via either a special vote authorised by the BOD, or via a vote tabled for the AGM) would have a different viewpoint to that of your average retail shareholder.

    A third party could indeed make us an offer which would be too good to refuse - but how high would that have to be?

    Imo it would come down to this question:

    "If I sell my shares in Insmed to this company, can I find an alternative investment which is likely to grow my capital at a faster rate than can be expected if Insmed remains independent?"

    What if my prediction becomes reality, and Arikace is quickly established as the gold standard antibiotic for people critically ill with pneumonia? Pneumonia kills millions of people every year, and although the funding to treat people in poor countries must be found from global aid programs, China is currently throwing tens of billions of dollars into a healthcare program. A cursory search unearthed the following information -

    "We systematically reviewed the Chinese- and English-language literature for studies with primary data on pneumonia incidence and mortality in mainland China. Between 1985 and 2008, 37 studies met the inclusion criteria. The quality of the studies was highly variable. For children younger than 5 years, incidence ranged from 0.06–0.27 episodes per person-year and mortality ranged from 184–1,223 deaths per 100,000 population. Overall incidence and mortality were stable or decreased over the study period and were higher in rural compared to urban areas."

    The population of China is currently around 1.3 billion. And I'm guessing that the vast majority of the studies referred to above were conducted when the rate of MDR-TB was a lot lower than is currently the case. That said, it would certainly be rather extraordinary if nearly sixteen million Chinese die from pneumonia every year. I did intend to offer some share price calculations based upon the use of Arikace in that particular opportunity alone, but my calculator broke :-)

    Nobody wants to be remembered for selling the goose who lays the golden eggs for the price of its meat.

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    • Lux19insm, re your -

      "I think this company is sold by the time the russel index comes around ... why wouldn't big pharma make a bid for insm? especially after the dog study is out - we all know iplex is worth billions to a big pharma"

      - I'm guessing you missed the argument I offered in the initial post in this thread. Hopefully you'll offer a response.

    • Satltsasw - I believe I have already addressed, in the initial post in this thread, the suggestion that Insmed is likely to be sold before it attains "leading biotech" status.

      If you find fault with my reasoning I'll be happy to discuss your points.

      • 1 Reply to fudfighter4
      • I do find fault. The Transave investors are not in this for the manufacturing for the exact reasons I defined earlier regarding infrastructure and startup. It is not their expertise. Lewis' history is one that sets the course for sale at the opportune time. And that opportune time is well before any sales would propel sp to anything beyond a fraction of potential.

        You continue to treat Insmed as a company that is being run by Allan and Sharoky. It was Allan and Sharoky's vision that Insmed would be a major pharma. There is no indication that the current power holders feel that way. If Whitten had delivered the goods, perhaps. But, he dropped the ball and they dropped him and all the other officers of the company. It is an entirely new company if you have not noticed. The officers currently in place are building a company to sell...all indications point that way.

    • To supply a bit of colour for those new to INSM, it's been suggested that China has a serious HIV problem.

      An estimated 110,000 people don't contract multi-drug-resistant tuberculosis unless there is a serious TB problem, and active TB infection is usually only seen in people with weakened immune systems. Unless there is a serious food shortage the most likely reason is large numbers of people with HIV for whom antiretroviral therapy is not available. The likely chain is -

      HIV infection
      HIV / TB co-infection
      Untreated or drug-resistant active TB
      Death from pneumonia

      And talking of likely chains .....

      In order for Premacure and PCUT to have been assigned Orphan designations in recent months for their respective uses of iPlex they had to identify an adequate source of the drug, by supplying the name and address of a manufacturer.

      In March 2009 Merck acquired the only facility in the World at which iPlex was being manufactured. It's difficult to believe that Merck was unaware of the potential future use of iPlex in the prevention of the complications of premature birth, and has not been monitoring Insmed's progress and that of the Premacure program.

      China in particular is a nation which has both a high incidence of premature birth - an estimated 1,172,300 each year - and the available funding for groundbreaking therapies like iPlex and Arikace. And from Merck's latest results -

      "Chinese sales grew 19 per cent for the first quarter, which includes a 5 per cent benefit from foreign exchange, and continues to be a key driver of growth in the emerging markets."

      • 2 Replies to fudfighter4
      • For those here who are unaware of the significance of the Orphan designations covering the use of iPlex granted on July 23 and September 20 this year, PCUT and Premacure respectively had to identify an adequate source of iPlex by supplying the name and address of a manufacturer.

        From the guide to completing an application for Orphan designation -

        "(b) A sponsor shall submit two copies of a completed, dated, and signed request for designation that contains the following:

        (1) A statement that the sponsor requests orphan drug designation for a rare disease or condition, which shall be identified with specificity.

        (2) The name and address of the sponsor; the name of the sponsor's primary contact person and/or resident agent including title, address, and telephone number; the generic and trade name, if any, of the drug or drug product; and the name and address of the source of the drug if it is not manufactured by the sponsor."

        This doesn't tell us who has made the commitment to manufacturing iPlex - but it does tell us that SOMEBODY has agreed to manufacture a drug some here would like us to believe is "dead".

      • your posts are pure turd

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