Innovation Pharmaceuticals Inc (IPIX)

[slcimmuno]

To BioHedge's point about Big Companies not the best at doing Due Diligence (Merck/Cubist... patent ruling impact)

Credit Suisse analyst Vamil Divanand team explain:

"Not only does this bring into question the financial value of the deal, but also raise questions on Merck’s own due diligence process and choice of timing to do this deal, given that a decision by the court was imminent to begin with."

Another excerpt
Additionally, acknowledging we are not M&A lawyers, our review of the merger agreement suggests that the deal can likely not be terminated solely on the basis of this ruling. Assuming that the deal closes as announced (which seems to be Cubist expectations per their press release), we do not see this deal being accretive in the near- to mid-term. Our back of the envelope calculations further suggest that the
incremental two years lost Cubicin sales (Jun ’16 to Jun ’18) were worth ~$1.5Bn+ to Merck on an after tax basis, likely making it difficult to generate positive long-term value from the deal.

Shares of Merck have dropped 5% to $58.80, while Cubist Pharmaceuticals has fallen 4.3% to $96.26, Eli Lilly has declined 1.3% to $71.91 amd Hospira has dipped 0.2% to $59.98.

FULL

http://blogs.barrons.com/stockstowatchtoday/2014/12/09/merck-cubist-well-it-seemed-like-a-good-idea-at-the-time/