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Avanir Pharmaceuticals, Inc. Message Board

  • placesontherun37 placesontherun37 Jul 3, 2013 9:45 PM Flag

    AVNR's Cash Situation (2)...

    So, my takeaway here, is that AVNR will:

    - Keep its $67.8M in cash with interest only payments for the first year of the new $50 term loan deal; thereafter amortized payments over the as yet unannounced term (the last $30M loan was for a term of 42 months...this new $50 loan would most likely have been structured with a longer loan term due to the higher amount borrowed, & to keep the individual monthly payments low after the interest only payment time frame ends) of this loan; with a back end payment like the other one..while.

    - Also getting its hands on a nice future revenue stream from the ON deal that was not available to it previously, while giving its sales force another great product to sell with very strong synergies to N; this same sales force will not move to the 150 person level until drug launch for AVP-825...1/1/2015, and, by then N revenues should be double where they are now...better allowing AVNR to absorb the roughly $4.5M per quarter it will cost to pay these new people;

    - Adding value in any takeout negotiations, as to the imputed cash flow to AVNR from this ON deal, it will make any acquiring entity pay at least $2 to $3 per share more than it would with out AVP-825 in the product suite of AVNR...the migraine market is big and this product could very well have some nice legs and sell well once it is selling less than 18 months from now under current projections..

    Knee jerk reactions like today are simplistic when you keep focused on expanding revenue at AVNR...from the ONXX deal, where ONXX is still not making any money, yet, can be worth $140 plus in a take out, revenue growth and patents are where it is at...much more so than the bottom net income line..and anything that adds to future AVNR revenues long term like this well structured/planned ON deal is fine with me..

    Sentiment: Strong Buy

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