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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: RCMac who wrote (5320)	1/4/2002 9:11:45 AM
From: Biomaven	Read Replies (2) \| Respond to of 52153

RCM, I've been thinking more about why Roche hasn't settled, and I wonder if it may have to do with the terms of their Boehringer Ingelheim acquisition. It has been reported that Roche kept back a billion dollars in their acquisition to pay for potential lawsuits. I could imagine that the terms of that agreement allow for either BI to approve any settlement or for the holdback to be retained by Roche only if Roche actually loses a judicial decision. If a potential settlement is over a billion, BI would have no incentive to approve, and so Roche is forced to go to court and wait for a judicial decision setting damages. What do you think of this speculation? Peter

To: RCMac who wrote (5320)	1/4/2002 9:48:51 AM
From: Biomaven	Respond to of 52153

That's the worst possible tax treatment. But from Roche's viewpoint it's the best possible tax treatment. Under present US law at least, they get a deduction for the full amount. There have been many proposals to disallow the deductibility of punitive damages, but so far they haven't gone anywhere. I think more to the point is that it is much less embarrassing for Roche to buy Igen at a substantial premium than it is to shell out large sums in a verdict. The Meso deal (grumble) was clearly structured with the thought in mind that someone unfriendly could munch Igen, but I don't know how Sam would feel about consigning his employees to work for Roche. Peter