oh, and of course ABBV, which I forgot since they were just discussed recently - but yes, they are right up there with GILD, J&J, and Roche! They need 3422, and a shorter treatment duration, let alone fewer pills!
...con't (The landscape)
From where I sit, it seems that of these players, BMY would be the most motivated if they are willing to more than double down on their bet. If the bet fails though, more than one head will roll over there. Gilead has a $30+ billion franchise to protect (they've already brought in nearly half of that and have recouped their acquisition costs), so spending 10-15% of their franchise value as added insurance seems like a reasonable and inexpensive thing to do. An ACHN acquisition gives them future firepower and takes a potential advantage away from everyone else. Merck is realizing that they now don't have a shot at 4 or 6 week cures (after recent trials), and their 8 week cure so far is too weak (with the NS5A and the PI), so they could be motivated, but again, after spending nearly 4 billion, are they willing to double down? Finally, J&J might be able to shave a year off development time on Alios' preclinical nucs by putting 3422 and 3102 into phase 2's right away, and they also needs to protect their $1.2 billion in revenues, which is as good as gone IMHO. Shjaving a ye3ar off could be worth $1-2 billion in revenues.
So based on all this, I don't think BMY and MRK will be buyers. BMY needs it the most, but I don't think their M&A guys can risk that much egg on their faces after losing $2.5 billion. GILD and JNJ are the two more likely players for reasons I've cited, but an equally motivated player with deep pockets will be Roche. I would not at all be surprised if they emerge as the buyer. The good news is that there are at least two, if not three, viable players for ACHN. Question is when?
In 2011, Gilead acquired Pharmacett for $11 billion and got their infamous nuc, sofosbuvir. In 2012, Bristol Meyers bought Inhibitex for $2.5 billion, but their nuc blew up. In August of 2014, Merck bought Idenix for $3.85 billion and picked up an NS5A, an NS5B and a PI. In September 2014, J&J bought Alios Biopharma for $1.75 billion, and bought two preclinical nucs (but the purported reason for the acquisition was for RSV drugs). J&J already has an NS3/NS4 protease inhibitor on the market: Olysio. Ledispavir just rendered Olysio useless, since most of the revenue generated thus far was in combination with sofosbuvir, pre-Harvoni.
So where does that leave us? Gilead really needs 3102 if the 8 week treatment option holds up in phase 2, let alone six weeks, but they may not pay $4-5 billion for it - not without knowing that 3422 is also going to hold up. BMY got burned badly - question now is, are they willing to risk another $3-5 billion to try it all again? J&J can start POC's on their two new nucs ASAP to go in combo with Olysio. And Merck has nearly $4 billion in already - do they need another set of drugs from ACHN? con't....
I think if Viekara Pak does not do well it will make ACHN more attractive to ABBV and possibly less attractive to GILD. However, the Express Scripts deal is just the beginning, IMHO.
I just realized that of course shorts would not cover by dec 31 for tax loss purposes. They've suffered so many losses in 2014 they certainly do not need ACHN for that purpose. They will cover for the loss in 2015!
Nice list. And I keep forgetting about Roche. They could emerge as the buyer, As they are acquisitive (they bought ITMN recently, which is also in the HepC space), they have their own HepC drugs in development now (two nucs and a PI I believe), and infectious disease is an important area for them. I'm just waiting for the announcement from Achillion that they have hired Morgan Stanley to "evaluate strategic alternatives."
yes you have and yes it can. I would not at all be surprised that by the time ACGN's drugs are on the market, the price for a cure is $40-50K, which doesn't worry me. ACHN will still be able to carve out a $1-2 billion revenue stream, which still put's the company's value today in the multi-billions. 2? 3? 5? It's all a lot more than 1.
Direction2trade, no, you're not spamming. Spam is BS disguised as substantive content. Your BS has no disguise at all, so no, it is absolutely not spamming! Nonetheless, I'd like to wish my favorite person a happy new year - direction2trade, apokerface, and ralphbucks!
Longs typically look for a 2-4X upside to downside. So on ACHN, I think there is a $-5-$6 downside to a PPS about $6-7 (short term), and an upside of $+10 - $30, or 2-5X upside. So ACHN fits a longs formula. The only way you can get to that kind of formula as a short is if you think this is going to about $2-3. That would value the company at $200-$300 million, or about a fourth to a third of what Enanta currently has as a market cap, with only a PI as part of the ABBV cocktail. They haven't even started on their NS5A yet past POC. So the short thesis completely discounts the NS5A results (3102) to date, which is, in short, foolish. This is in part why I am holding a decent sized position in ACHN, precisely because there is a 27% short position and there is a very good chance of a mother of all short squeezes down the road. I've been in one other stock like this - a non-biotech one a few years back - DECK. Remember DECK (Deckers Outdoor, makers of Ugg boots)? I got in around $60, with about a 30% short position. All the shorts sighed a collective UGG! when the company reported better than expected earnings and the price doubled to around $115 over the next several months. ACHN is obviously more event driven than earnings driven, but given the odds, here, I simply don't understand being short. There's way too much upside relative to downside.
yes, they could report svr8 before 12, but since they only discussed svr12 timeframe, they may have done so, as you pointed out, to give themselves latitude. However, I can't imagine they wouldn't take the PR bump if in fact SVR8 is still at 100%. By saying they will re3port svr12 in first half of 2015, they know they will start the phased 2 combo trials prior to that, which will be a positive PR bump on the stock, even if there is some relapse on 3102.
So about the cobo's, magnam thinks they will test a 500 mg 3422. I do too. I am hoping they test more rather than fewer combinations, like 500, 600, and 700 mgs combined with 3102, and at least one or two arms include sovaprevir (like at 500 mgs).
direction2trade, from your post of someone else's post above, which you claim to be informative: "...I personally think the Hep C market is already crowded as evidenced by the exit of Merck and Novartis ..."So actually, Illiad doesn't even need to be informed (although he is). He's simply pointing out the irrelevance of what you posted!
Ok, bakin, all kidding aside, I think ACHN today, without buyouts or anything else, is worth about $18-20. With multiple buyout bidders, I think this could go for $28-55.
At what price did you take a position, direction? I've been in this since the 6's, so the price gyrations are just noise. If you have no conviction about this stock, sell your 300 I mean 30,000 shares and buy GILD. That's a fairly safe bet!
Bakin,if you have 200k in this stock, you should be telling us what ACHN is worth today! Either that, or I should be managing your money!