Intellipharmaceutics International Inc. (IPCI)

[no2koolaid]

Nothing like traveling outside the US to provide a different perspective. And, in so doing, I ran into a Financial Times article that mentioned something that brought IPCI to mind. Here is what I read...

"Low interest rates are fueling the surge in the demand for company issued bonds to fund ever more M&A. In fact, companies have sold more “jumbo” bonds since January than in the previous 5 years combined."

Even in the absence of specific targets, the FT says that companies are racing to lock in low funding costs before the US interest rates are raised. Until 2013, the FT said that "$5 Billion bonds were considered jumbo for the capital markets, but now we are seeing $10 & $15 Billion bond issues by the companies that view M&A as a better vehicle to growth than share buybacks. And, the trend is not abating."

This is in light of the fact that pharma M&A is on track to exceed an all-time high and big pharma is struggling to stem revenue erosion. Since a leveraged acquisition of a company with drugs that fit into a firm's therapeutic area or can extend its market reach, the shopping spree should continue and prospective winners are being identified by the various business development departments of big firms, where their own valuation analysis is being completed to determine what to pursue and how to price it. With that, here is compound question...

While I admittedly do not know the many nuances associated with the firm, what do you believe are the buyout prospects of IPCI and why? Because, if they have value as noted in umiak's post, and are small with a limited following, as noted by the stock being thinly traded, why would a BPF not pursue them if their pipeline is valuable and they can be had at a fairly low price? (I am decent with math and can easily see what might be an offered price that would likely please shareholders. But, that is for another post.)