You are taking a company that closed Friday at a market capitalization of $1.69 Billion and calling my $3 Billion (based on the $60 per share) as "Low". That is actually a very nice premium.
So lets say I allow for a "Double". Sell it for $3.5 Billion which makes it closer to $70 per share.
I would consider that by any measure. more than generous.
You seem to be looking in the $200 per share range. Gee, I hope you turn out to be smarter than I am…I will be looking at new car catalogs if you turn out to be correct.
Tough to judge sales numbers. Gilead wanted $84,000 per regime of Sovaldi. The prescription drug managers like Express Scripts got them and Abbvie into a pricing situation. That sets off a whole new arena (and opened a can of worms) that is very difficult to undo.
That an Bangladesh has copied the drugs for $10 each. Not that they would have paid Gilead prices…but I am saying there will be people who take a trip (vacation) to India and Bangladesh…buy the "copy cat" drug and safe money.
So going by future sales is difficult. I would make the offer based on current value of the company and a conservative valuation of what you would pay for a company of this size.
I think right now a $60 buyout would be fair.
I would consider that greedy. If you buy a stock (any stock) at say $20 (which I am sure some of you bought CEMP at about $20…and someone gives you $60 for it you would turn down Triple your money ?
I will gladly take $60 a share and move on to the next stock (biotech or not) and be happy that I made a profit. Won't go broke taking a profit.
Biotech stocks are funny…they can swing wildly on "potential". In this case the end product is a bit more understood. This is not a cure for cancer or a cure for ALS or even MS.
Its a more stable biotech which will probably more more responsibly, in a controlled upward fashion unless a buyout offer is actually made.
Now a buyout offer could send the shares through the roof…but my definition of that is say $20-$30 up in one day. I do not foresee someone paying triple digits for this.
In at 94 out at 109.70
Going to see if it pulls back just a little. Not looking for much, but this type of move tends to have to "rest" a couple days.
Long term winner…looking to get back in slightly lower.