My bet was that was the way they were headed... a big wrap up div. Or to buy a co with fresher royalty streams (ex. $LGND). But buying the new assets they did suggest a desire to hold on and milk it longer. As such, while shorts likely to get crushed in the near term - at least through year end - longer term I see a slow bleed into obscurity (a la $ENZN). With the red hot biotech capital market, and lot of funny money around, you need to have more than just cash to secure high probability payouts from biopharma royalty asset bolt-on deals. Otherwise, you end up with a portfolio of much buyer's remorse.
It is hard to explain the momentum in this stock, given that the sole remaining Queen patent expires next year and there is a lack of other comparable income producing assets. Even if there were some attractive assets to buy, the company would need to raise capital to fund any acquisition, since they have spent all the cash on the balance sheet.
The company has no cash with which to pay a dividend. They reported about $325 million in cash and equivalents at the end of Q3, but spent $240 million on the acquisition of a royalty asset and another $60 million on a credit facility, both of which are in the subsequent events footnotes in the 10Q. They borrowed $75 million to backstop another credit agreement that they put into place, but this has a one year term and it amortizes, so its duration is only 7-8 months. As a result, the company has little in the way of liquidity either for special dividends or new acquisitions. It also has the convertible notes outstanding, which at present prices are likely to be converted to equity.