Anyone working on a breakup value (they've got to be worth a fair bit more wothout the current management) ?
Starting place Extra Pale's recent notes -
A few notes from 2/23 BioCEO Conference
- currently 4 compounds in phase III
- 8 compounds in phase II, with expectation that two are moving this year to
phase III (LY818 Type II Diabetes,SB497115 (GSK) Thrombocytopenia)
- repeated Avinza market share goal of 15% of $4billion market. What I found interesting was slide #16 that demonstrated steep ramp-up in 2003 thru 1H04, then leveling of monthly scripts. My guess is that crash of lgnd's share price last year (from $24 to today) would fit. Robinson explains sales
growth rate decline as due to restructuring of outside sales force. Claims they are recently showing signs of being back on track.
- corporate partner program does look lucrative. LASOFOXIFENE at 3% royalty
is lowest, with 7 to 10 other compounds reportedly at low double digit
royalty agreements. All are on major market products.
- 2006 revenue projected at $400 to $600million, and profitable from 4th
quarter 2004
It is hard to take Robinson seriously. However if any one or a combination
of partial goals are hit, Lgnd should do well. Perhaps pissing off investors
has created a buying opportunity. (Robinson retiring would likely increase
stock price 50% -g-)
A buyer would have to clear the LT debt - c. $167m from last 10Q
Assume current cash goes to tie up accounting loose ends (just when will we see the 10K ??), and pay severances.
The $32m due from Royalty Pharma (have they got it yet ?) can be offset by the $30m odd due to Lilly for reduction in Ontak royalties (this is likely to be paid, as both co.s have options to enforce this).
So what's left ?
About 65% of Avinza;
About 80% of Ontak;
(Gross margin c.75% from last 10Q, though this likely to rise with sales.)
About 3% of Lasofoxifene (likely sales anything from $650m upwards:
Suntrust Robinson Humphrey analyst Bert Hazlett is bullish about Pfizer's
prospects, expecting Exubera sales to eventually reach between $2.5 billion
and $3 billion while Indiplon sales should reach $1 billion. He is less
enthusiastic about another drug, LASOFOXIFENE for osteoporosis prevention
because it will face stiff competition and estimates sales of $650 million.)
Low double digits of several PII, and preclinical progammes (although Royalty Pharma takes a slice of some of this - anyone got hard figures ?)
(nb Royalty Pharma recently paid $32.5 m for 1.625% of the Pfizer & Wyeth SERM programmes; Glaxo and TAP don't seem to be part of this arrangement)
Various inhouse bits and pieces (SARMs and other indications for Tagretin, Ontak etc.)
All this seems to add up to a lot more than current cap. plus debt.
I've taken a small position this morning, and may get more aggressive if I can firm up any of this. |
