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Biotech / Medical : CEPH - CEPHALON
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To: Icebrg who wrote (26)5/27/2003 3:33:23 PM
From: Icebrg  Read Replies (2) of 109
 
Ark and ye shall receive

[Since I am back among the owners, I suppose I should start posting here again. It appears as if Cephalon might have run into somewhat of a problem over in Australia.

Erik]

WE have an unlikely greenmailer, ladies and gentlemen: the Cancer Research Institute. Last night, the CRI's 14.5 per cent proxy for Sirtex was nowhere to be seen.

We take it the CRI, which received its stock in consideration for intellectual property, won't be tendering its scrip. If that's the case, then everyone gets their shares back and misses out of Cephalon's $4.85 in cash. The instos will be screaming blue murder.

Cephalon hasn't played the smartest game. Its boss told a trade mag after announcing the deal that the US market for metastic liver cancer – whatever that is – was alone worth $500 million.

The instos arked up and said the bid's not high enough but it looked like getting over the line when Hunter Hall capitulated. No one suspected that the CRI might hold to its word that it would not sell, and its shares.

Boutique biotech house Emerging Growth Capital forecasts Sirtex sales of $138 million in 2005 and earnings of $37 million, which, if it's on the money, puts Sirtex on a PE of 7.1 for 2005 – very good for a biotech.

Those figures are based on an 11 per cent penetration of the global market of $US1.25 billion ($1.9 billion).

If Cephalon can't get its 90 per cent – which without CRI's 14.5 per cent it won't – then it has to hand back acceptances and wait for another six months before it can bid again. The stock then would probably drop to $4 - $4.30 for a while.

theaustralian.news.com.au
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