sum - I don't know how long you have been following GSK, so you may or may not know this. When they announced the deals with Novartis last year, GSK announced that they would return 4 billion pounds of the cash they received to investors as a special dividend. After the deal was finalized, they backed off that and said that they would return just 1 billion pounds as a special dividend. Until they declare it, I would not assume that there is a 100% chance of actually paying out on their intent. Decreasing this special dividend again would, I think, be suicide for the CEO. So, I do expect they will pay this dividend in April.
As you pointed out, the actual payouts will depend on exchange rates (this year's $ payouts are roughly 10% below last year's, despite the same payout in pound sterling). But, a $3.00 payout over the next year is about right, if you include the special dividend.
I should add that they have not yet declared the special dividend, so there is still some uncertainty around its actual value, even in pound sterling. I would think (hope?) that they would not forego it completely, after having already decreased it in value from a year ago.
In the July 29 press release for the Q2 results, the stated that they expect to pay an ordinary dividend of 80p for each of 2015, 2016 and 2017. They also stated that they will return approximately 1 billion pounds to via a special dividend to be paid alongside their 4Q2015 ordinary dividend. That dividend will be paid in April, 2016. The special dividend should be roughly the same as another quarterly dividend.
I can't wait to see the spin they put on their first interaction with the Japanese regulatory authority, if/when it ever happens!
So, what would a fair take-out offer be? $60 per share, or approx 145 billion usd??
jay - the cost of their compound is not the only negative sentiment - in fact, it is not the real negative sentiment. I would be negative on AXON, even if they had paid 100 musd for the compound. I've been following the small-biotech area for a while and two biggest problems I see with AXON are valuation and the lack of pipeline (maybe it is one issue - valuation based on lack of pipeline). I have seen many biotechs with valuations of just a few hundred million, who had multiple compounds entering, or in, clinical development. Bringing a drug to market is a very risky process, and the odds are against any given compound. For a company with one compound, even in a potentially very lucrative area like AD, to be valued where AXON is, seems crazy to me. Other factors (cost of the compound, GSK stopping development, the post-hoc analyses), to me, just add to the risks for this compound, specifically. I would be interested in AXON is they would use some of their IPO proceeds to pursue other potential clinical candidates and build a pipeline.
Jay, I am one of those shorts. I am long a number of small biotech stocks, and have never before shorted a stock (unless you count selling covered calls). But, I shorted AXON because the valuation is way too high for a company with just one compound, especially one that big pharma (GSK) has already tested and decided not to pursue.
While it is always nice to see statistically significant Phase 2 data for a compound, investors should be aware that the 'completers analysis' presented in today's PR was not the primary analysis planned in the protocol. The primary analysis was to be at Week 24, for the ITT population, and included only one of the two variables they presented today (as well as a second one that they did not present). This may seem like a minor distinction, but making decisions based on post hoc analyses is very risky, and is less likely to predict results in future studies, than decision based on primary analyses. Another major risk is based on their discussion with FDA, as to what the FDA will require for approval. The FDA will not simply accept choosing the primary Phase 3 variables, based on what was statistically significant in Phase 2. If I were long, I would want to know what the FDA guidance was/is.
I hope they address, or are asked, about regulatory interactions. They previously had stated that they intended to discuss with FDA, what would be required for approval. It would be very helpful to know what the FDA guidance is.
The studies were done by GSK, not AXON. AXON only bought the compound from GSK in December, 2014, with plans to discuss their own study with FDA in the first half of 2015. I have done my own research. AXON HAS NOT DONE A STUDY. GSK conducted 4 Phase 2 studies, including the add-on therapy study with 684 patients. GSK completed that study in 2011. Hows that for a deep dive?