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Harris & Harris Group, Inc. Message Board

sfvictim 98 posts  |  Last Activity: Jul 31, 2015 10:10 AM Member since: Jun 7, 2013
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  • Reply to

    Offering that Breaches Fiduciary Responsibily

    by who_gnu_1235 Jul 31, 2015 9:21 AM
    sfvictim sfvictim Jul 31, 2015 10:10 AM Flag

    Company can elect to issue non-tradeable warrants. Agree that disclosure is very strange, especially since warrants don't appear in individual filings. Insiders seem to have made open market purchases. This placement may still be in limbo. Perhaps it's undersubscribed or there are some legal impediments. I'm buying.

  • Reply to

    going forward is complicated

    by jaltex Jul 31, 2015 9:08 AM
    sfvictim sfvictim Jul 31, 2015 9:19 AM Flag

    This is old technology, but considering the refractory nature of HCC and the large market opportunity, I would expect to see the Company taken over, possibly before the end of the year. All we need is one willing party, possibly another Company with some cash, a failed clinical trial, looking for another product to keep their jobs.

  • Reply to

    Options

    by biomattica Jul 31, 2015 8:11 AM
    sfvictim sfvictim Jul 31, 2015 8:54 AM Flag

    Have you considered a calendar spread/strangle? (Calls Only). I'll have to check the difference in premiums when the market opens. March calls are too expensive.

  • Reply to

    Options

    by biomattica Jul 31, 2015 8:11 AM
    sfvictim sfvictim Jul 31, 2015 8:26 AM Flag

    My guess is that most of the calls were sold (Sept) because stockholders don't expect a deal to close in the near term. If they're wrong, some may not mind leaving money on the table for the speculators. I'm looking at the December calls because someone may force their hand before the end of the year. Implieds are not that high.

  • Reply to

    Good Bye HZNP

    by secondtothird Jul 30, 2015 9:49 PM
    sfvictim sfvictim Jul 31, 2015 8:23 AM Flag

    DEPO has a great legal team, but I don't think that the battle will be won or lost on the legal front. I expect to see a different strategy. HZNP's bid has actually helped DEPO get a better price with a more solid, inversion based Company. They will use HZNP's bid to their advantage. One would assume that they prefer to be acquired by a Company whose share price has not quadrupled in the past year and who is not using their recently runup stock as currency. They may also pursue a merger of equals with another Company. Control is a key issue.

  • Reply to

    Good Bye HZNP

    by secondtothird Jul 30, 2015 9:49 PM
    sfvictim sfvictim Jul 31, 2015 7:59 AM Flag

    Watch the options activity. I presume nothing will get done by Sept. expiration, but December is another story. DEPO's CEO said he was open to tax inversion and telescoping future profitability, tax strategies will be a compelling issue (especially before Congress rewrites the law). I doubt that Mallinkrodt can step in due to anti-trust issues. Teva has too much to swallow right now. Tim is not ready to give up yet and we will see what his plan is during HZNP's Conference Call. I was surprised that DEPO wasn't interested in buying Pennsaid when it was recently up for sale. The two companies are obviously competitors when it comes to diclfenac franchise, so it will require an about face and a conciliatory link. HZNP needs to show that they can swallow a 2 billion dollar company so they can propel their trajectory and assuage doubters on Wall St. It's now a power play and HZNP has the advantage.

  • and hear the other side of the story. The letter from Jim to Tim was anything but chummy. Tim will be very patient and let the big shareholders pressure Jim. There's no urgency on Tim's part, unless another suitor comes along. I suspect Jim is waiting for a white knight to show up with a better deal structure, possibly big pharma. Tim doesn't mind the delay if there's no one else at the alter. He also needs to see progress on the legal front in the cases vs. Purdue and Endo. Jim said that he found Tim's offer to be disingenuous. So the question remains, will Tim change the deal structure and give DEPO shareholders more than 25% of HZNP shares. If he believes that a true synergy exists between the two companies then he may be prepared to step up to the plate. It doesn't matter whether the offer price is 33, 35 of even 40. What matters is the percentgae of of ownership he's willing to relinquish.

  • There was a flurry of selling towards the end, but so far we avoided the carnage.

  • Reply to

    You decide DEPO

    by junglejim888 Jul 30, 2015 3:43 PM
    sfvictim sfvictim Jul 30, 2015 4:07 PM Flag

    That's the obvious logic. But Jim and Tim are smarter than that. Tim wants this deal to happen and Jim won't give him his pound of flesh without a new deal structure. If there's a will, there's a way and the Street wants the deal to take place. The question now is whether Tim will overcome Jim's biggest objection... don't give us a share price, give us a percentgae of ownership in HZNP shares.

  • Strategically, they need to merge with a Company which has a blockbuster product, but no sales force. It's extremely expensive and time consuming to assemble a sales force. DEPO's sales force is currently in transition with the new Quintiles additions. They still could use a few new products to sell.

  • whether management likes it, or not... and I'm not talking about Horizon.

  • Reply to

    DEPO Board rejects HZNP offer

    by fireball_money Jul 29, 2015 4:15 PM
    sfvictim sfvictim Jul 30, 2015 11:42 AM Flag

    DEPO's share price would have dropped precipitously if investors knew that the deal was off. This is just the second inning and alot will take place before it plays out. Tim is motivated to do the deal, but will have to establish a reset structure i the event that HZNP's share price drops.

  • They come off as rank amateurs with little understanding how Wall St. operates. If they don't know the cash and stock proceeds amount they leave investors in limbo.

  • Predicts that Nucynta will be a billion dollar drug before patents expire (now going out to 2025 on diabetic neuropathic pain). He provided alot of field sales force detail, which I never heard him talk about before. Now the ball is in HZNP's court.

  • sfvictim sfvictim Jul 29, 2015 4:13 PM Flag

    In reading the letter, the main issue here is not the price offered, but the reset of HZNP's share price, in the event that the market drops. They could revise the structure and still save the deal.

  • sfvictim sfvictim Jul 29, 2015 3:53 PM Flag

    Quiet period involves more than stock trades. HZNP's deal terms involves no cash, so in effect, it's a stock deal, based on the reciprocal coefficient of HNZP's share price. Perhaps I'm naiive, but from my experience, alot goes on behind the scenes with the large shareholders that we don't know about. Anyone doing a hostile takeout has to be a card counter and knows where the blocks are held.

  • Reply to

    Tale of two stocks if

    by junglejim888 Jul 29, 2015 3:08 PM
    sfvictim sfvictim Jul 29, 2015 3:49 PM Flag

    Puts are going up in price (short term), but still relatively inexpensive, considering everything that's going on. Jim knows how to stay mum, so it's everyone's guess.

  • sfvictim sfvictim Jul 29, 2015 1:02 PM Flag

    I see that the CC is at 4:30 today. Expect some telling questions by the analysts.

  • Stock for stock deals are complicated and require mutual due diligence. The last thing the DEPO Board wants to see is a runup in HZNP's share price, which would equate to a lower percentage of ownership of HZNP by DEPO shareholders. They still have to act as fiduciaries and set a closing date. Behind the scenes, the large institutional shareholders of each Company is jockeying for position. They are the ones who will determine whether the deal closes and at what price. DEPO's Board is probably being advised to stall to preempt a lawsuit after a deal is announced. DEPO is also in a quiet period now, which may be one reason why they want to get the earnings report behind them today. Does anyone know if there's a conference call today?

  • Reply to

    Wishing no one bad luck -

    by jcbrowns Jul 29, 2015 11:48 AM
    sfvictim sfvictim Jul 29, 2015 12:23 PM Flag

    If the deal goes through, it probably won't happen until DEPO's Board exhausts all delaying tactics. While they delay, NUCYNTA sales will ramp and the value of the franchise will increase. HZNP made a bid prior to the ramp. HZNP may have tried to bid on Nucynta earlier this year and lost out to DEPO. DEPO's CEO used to work for Centacor, a division of Johnson and Johnson and had already established a relationship with them. HZNP would never pay up for the rest of their products.

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