It seems that most here agree that a BO will happen and the discussion is primarily about “when” and “how much”. Below are some thoughts about how the TWO parties may look at it from different points of view:
Ariad
Looking at Denner running a hedge fund and negotiating from a position of strength this is what he may be thinking:
$18-$22 This isn’t even the pps of Ariad pre-crash and since then so many good things have happened with: Pona…re-approved, improved dosing, growing sales….Brig…in trials and excellent outlook, 788…shows ability to create, innovate and more. New and improved management, decent cash position and better operating results to boot. If I were running the show this level is a non-starter just from a psychological standpoint and would do nothing to advance reputation in the industry for future deals for one.
$22-26 This is in the area of pre-crash and Denner could say that at least they got back to where they were in 2013. Given that a lot of things have happened with Pona, Brig, the BOD and Management changes, they might take the high end of this range and say “we are good” in that the institutions (assuming they are all in from $4-$8ish average) could get a 3-6 multiple return. Right now this is where I think we would be in 4-8 months.
$26 + This is above my pay grade to predict and I absolutely don’t know enough about Denner, what he is thinking, or the approach that he might take in waiting for this level and above.
Big Pharma Buyer
I think they would look at Ariad as an entity with science in all phases that they want to add to their repertoire and would want to buy earlier vs. later. Given their willingness, expertise and ability to take some risk, I would think that they would not want to wait for all of the formal approvals on Brig and therefore pay a lot more.
$18-$22 For them this would be a “ super deal” and Denner knows that and therefore will wait out a reasonable amount of time (months) for more.
$22-26 This is still very doable and internally by rationalizing that Ariad was selling at this pre crash and NOW things are a lot better thus still a “good deal” with some risk yet not to the point of looking like they were overpaying.
$26+ Again, the stars would have to line up, the bidders making offers, trying to fend off competitors, wanting the science that no one else has the approved drugs, etc,etc, etc.
Overall, none of these are out of the realm of possibility and I think trying to look at it from both sides might be helpful in attempting to predict the future with a myriad of variables being taken into consideration by both sides. I think it is difficult for many to look down the road YET when trying to project using all of the factors that many here know and watched, it might be easier than we think.
The players involved are smart, sophisticated, projecting forward and also wanting to protect both what they have and maximize future possibilities. Perhaps my main point here is that “things” can be in many phases of development in order to create “value” and therefore the BO quite likely will happen sooner than later and it’s all about Win-Win and give and take by both sides
Many more here can expand on these ideas and I would love to hear how the sages on this board might look at it. IMHO
