Elayne, I'm not sure where I learnt about it first. Perhaps New Scientist. I do remember mentioning to a friend who works in Pharmacology who said that a friend of hers had just taken a job there becuase he was very impressed with the company. I've heard Chiroscience presnt at H&Q a couple of times.
The first time I heard them, I sold my holdings and bought Sepracor with the proceeds. I had originally bought Chiroscience on the Chiral story, when I heard they had bought Darwin and were trying to expand into a fully fledged Pharma I thought they had delusions of grandeur. Sepracor seemd to be doing very well, sticking to its knitting.
The next time I heard Chiroscience I was really impressed. They were selling impressive drug-discovery technology to Big Pharma while pushing ahead on their own in drug development. I bought back in (without selling Sepracor).
News is a problem. i use two brokers, neither of which seems to follow Chiroscience with any zeal. One thinks a colleague has a note on the merger. If so, I'll pass on the gist of what is said.
I'm not convinced about the critical mass argument for the merger, and the diversification is not necessary for investors. If I had wanted diversification, I could have sold some Chiroscience and bought Celltech with the proceeds. One could argue that diversification within a company gives stability to the company and security to employees, but those who crave that can work for Big Pharma. Along with increased stability goes reduced influence and chances of making a killing on options for employees.
It is said that the two pipelines do fit well. Chiroscience has Chirocaine imminent and some promising leads, but little in the middle-future. Firstly, I would have expected a jump with announcement of the new deal with Chirocaine, that's now confused with the merger. Secondly, from what I remember, there are substantial hopes that Chirocaine's use will be expanded.
Nevertheless, I doubt that I'll sell. The story's too good, even with the dilution. They have money and, with their size, can raise more. The trouble is (and I apologise for my free-associating), what CEO with an ambition to build a new Big Parma from scratch, leaves the company as part of the deal that makes it possible? |
