Insightful comment. There is no other reason for this stock to drop further like it is doing.
I agree also with your opinion on that deal, it would be positive for ARLZ.
It is good for QLTI as well, their cash is $2 per share and their share price is at $1.55, so they will take a huge premium, at least those who bought it lately.
Well, about QLTI:
1. It has cash around $2 per share.
2.It has $140 million tax credits and NOLs.
3.It has an orphan and fast tracked product with potential market of $250 million a year, entering PHASE III in 2016.
The QLT's advisor during the potential Auxilium merger valued the NPV of its retinoid program about $4 per share.
Therefore I believe that if ARLZ can achieve a 1:1 merger, it would be very beneficial for its shareholders, as it will take back $2 per share immiediately from QLTI cash, plus all the other assets.
A few days ago execs of Aralez had a meeting with execs of QLT Inc.
This is not unusual or weird: QLTI has invested in ARLZ a few months ago and QLTI Chairman is a director of ARLZ.
But the rumors say that there is more: The two companies are negotiating a merger. Beyond these rumors, let's see if a deal like this will offer any advantageous synergies to both companies.
First, ARLZ by acquiring QLTI will have access to the $140 million R&D tax credits and NOLs.
Second, ARLZ could give shares to QLTI and have QLTI's cash, which is more than $100 million.
On the other hand, QLTI needs a company with products already in the market as it has only a orphan fast tracked candidate entering Phase 3 and lacks a sales network etc.
Mark that both companies management teams are M&A friendly and QLTI tried to merger with other companies in the recent past (for example with Auxillium).
Also QLTI bought shares of ARLZ, so they will be positive to accept an offer of ARLZ shares.
So, to the next post let's talk about the evaluation of QLTI in a potential merger.
No worries mate. I made a 70% profit in less than a week and I make fun of your comments. Until my next pick here!
Well??? It was a pump??? The ONLY company with a new phase III antibiotic for MRE e.coli is AKAO.
AKAO traded at 3.14 when I posted, TODAY I sold at 5.32 !!!
Pump to who?? There is no more than 5 persons here, except acouple of idiots who shorts MNKD and write with multiple aliases...
I will let you know the aforementioned company on Friday. Then I will post the weekly gains, and if they are less than 40% I will never post in this board again.
Only one company has a new antibiotic to Phase III trials for this type of e.coli....