Pharma

[biaggio]

http://www.sec.gov/Archives/edgar/data/38074/000095012311058734/y91669defa14a.htm

 

"Today we issued a press release announcing that the Company has received notice from investor Carl Icahn (and his affiliates) that he owns options and stock representing approximately 6.5% of our outstanding shares, and that he intends to nominate four individuals for election to our Board at this year’s Annual Meeting. The press release is attached.

Our company has always welcomed constructive input from shareholders, and our board will evaluate these nominees in due course. Prior to our annual meeting, the board will make a recommendation regarding who it believes are the directors most qualified to serve on the board. In the interim, we expect to meet with Mr. Icahn and his colleagues — as we would with any investor — to discuss this matter and hear his thoughts about how best to continue building value at the Company..."

 

Any ideas what Mr Icahn is up to?

 

My guess is that he would like them to allocate the ~$12 per share net cash they have on the balance sheet.

 

 

[eclecticvalue]

re FRX

 

http://www.sec.gov/Archives/edgar/data/38074/000003807411000024/forest8kjune7.htm

 

"Pursuant to the ASR Contract, Forest paid $500 million to Morgan Stanley on June 3, 2011, and 9,839,752 shares were delivered to Forest on the same day"

 

It appears that FRX buying back almost 10 million shares for almost $51 per share (~ 35% premium). The shares are currently selling for $37.95.

 

Has this ever happened to anyone? i.e it appears that company is buying shares at a substantial premium.

 

I would consider selling for $50 (but I wont have a chance anytime soon)

 

Is this a way of FRX buying a large block of shares?

 

Why not just buy at the market?

 

Do folks think this is a wise capital allocation?

 

The market seems to like it, as it is hitting new highs.

 

Hey, you missed the fact there are more shares to be delivered and depending on the share price it will be in between 96% to 110% of the current share price.

[biaggio]

Thanks.

 

Is your understanding that further shares will be delivered so that the average price is between 96 and 110 % of the average price during a set period of time ie further shares will be delivered but no further cash will need to be given by FRX??

 

I am not sure what my brain was processing when I first read it.

[eclecticvalue]

NP, Right they will not have to pay any more cash to acquire shares. Depending on the price they will try to get it delivered at an average discount between 96% to 110% before March 31st 2012.

[Spekulatius]

Maybe time to visit this thread about Pharma in the middle of the epidemic? I am looking specifically at MRK right now. It’s a pretty understated drug company and what caught my eye is that they are very strong in vaccines. MRNA with their fancy tech and a couple of Phase 1 drugs is worth ~$28B and MRK with a bunch of vaccine (including one for Ebola) is worth $220B EV. Doesn’t seem right. Plus you get the whole drug company and pipeline with a monster like Keytruda with it. MRK also has a COVID-19 vaccine in the pipeline, but they don’t talk much about it. MRK generally only issues news about Phase 2 or higher drugs/vaccines.

 

Trades at 15x reset Y2020 earnings which seems about fair. Bought a few for my wife’s coffee can portfolio today and thinking about going more in. So far I like what I see, it wouldn’t call myself an expert in drug pipeline matters.