"The Fed also warned of increased signs of risk-taking in some stocks. The central bank's monetary policy report submitted to Congress Tuesday noted that valuations for stocks in smaller companies, as well as social media and biotech firms, appear to be stretched." - USA Today - David Carrig Article
So we have a small cap bio-tech and the price got hammered.
EBITA @ 12/31/2013 approx $2,100M
Tobacco Farmer payments repealed 150M ( I may rember this number incorrectly)
Projected synergies 500M
Total Enterprise EBITDA $2,750M
Avg industry EBITA Multiple (approx) x 11
Total Enterprise Value based on EBITA 30,250
Less O/S Debt 12/31/2013
Net Enterprise Value 26,600
divided by Outstanding Shs 362.5
This computes PPS at approx $73 / share.
Reading between the lines it looks like a stock swap, otherwise, why would BAT need to buy additional shares to maintain 42% ownership in RAI? Am I missing something...its been a long week....
A thumbs down for asking for someone to substantiate a statment that there is a buypout offer "on the table"? Wow.....pathetic.
Fatty - that actually sounds better. He is acknowledging that getting new patients is difficult, however they have been able to execute so far.
thanks...i think we have a winner in NPS but i am expecting some short term volatility. hopefully a good Q2 will put us on a good tragetory into ADCOM on NATPARA....good luck to you as well.
lbl4321 - thanks for the great summary, I did not have the opportunity to dial in - the one troubling thing you indicated Nader said is "converting the prescription to having the patient take Gattex to staying on the program is challenging" . Are we do read this as discontinuance rate will be higher than projected? Did he say anyting specific about that?
$5B in financing + $2.2B in cash on balance sheet + Goldman Sachs advising = a substantial offer. We may see $60 / share at the end of negotiations.
$180M of Cash and investments and $150M of ST and LT debt @ 12/31 and the insurance companies are paying (for now). Not so sure these are the reasons. Biotech as a whole is getting hammered due to the large run up in valuations over the last year or so. If we meet the targets NPS will be fine.
Sentiment: Strong Buy
Tell that to the folks who held Enron, Lucent, Bear Sterns, Merrill Lynch, GM, FNMA, Chrysler....just to name a few. I am a fan of GALE, but I am cautiously optomistic and buying on the dips.
I have not reviewed Griffins analysis, but note there is convertible preferred stock and stock options that total another 26M shares if all of these are converted / exercised. The fully diluted shares are closer to 37M factoring this in. I am not sure if this is considered the PPS analysis. I do believe there is still tremendous upside. Attached is a link to the Sept 30 10Q...see footnote 1, page 9.
Sentiment: Strong Buy
Spelling Police are issuing a citation, Orphen should be Orphan. Have a nice day and spell carefully. btw...I agree with your analysis. I have been holding since $8.00"ish". Frank (I Americanized him) has navigated the company carefully over the last two years and has earned my trust.
Share price is not the issue, it is all about market cap and how the potential revenue stream is related to the market cap. Would someone pay $2.8B, current market cap, for the revenue generated by these approved and development stage products? That is the question to ask regarding "too expensive for a buyout".