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Biotech / Medical : Duramed (DRMD) Synthetic Estrogen Product
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To: muddphudd who wrote (1822)7/9/2001 10:11:11 PM
From: darbyred  Read Replies (2) of 1837
 
There is little hard news on the merger. The initial reports stated it would close during the end of Barr's first quarter for fiscal year 2002 or early second quarter for fiscal year 2002. This statement caused me to believe the merger was much further advanced since Barr's fiscal year ended June 30, the day after the announcement. If September-October is the time table, the generic Prozac sales should have little, if any impact on stock prices.

There are several concerns for DRMD's shareholders:

1) Should there be an adjustment in the exchange of shares if CENESTIN sales sky rocket? This may be the reason for the rush to close the merger quickly.

2) The significant "cost" to market generic Prozac. Marketing costs adversely affected the profit margins of DRMD when it pushed CENESTIN and ultimately brought in Solvay. Barr is looking to DRMD for marketing strength.

3) The recent debate over Tamoxifen's effectiveness for breast cancer patients. Tamoxifen's sales could weaken rapidly.

4) Whether the run-up in Barr's price already takes into account near term expectation of profit from generic Prozac. Barr's stock has already had a good run. Considering its present numbers and this market, how high should its price be?

My earlier posts were(IMO) that DRMD shareholders will not get a fair price/exchange for their stock by this merger, and the stock (DRMD) would go down or sideways. I have seen no news to cause an adjustment to this opinion. Holding a good number of shares (DRMD)in my portfolio, I hope that I am wrong; however, IMHO there is a better chance during the next 60 days DRMD will see $15 before it sees $18/share. Let's hope for a white knight! Good Luck!
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