Biotech Values

[north40000]

OCAT: As others may have discerned from other venues, I am very disturbed by that low-ball offering price of Astellas for OCAT shares, even though that price leaves me with an overall profitable investment in OCAT shares beginning in 2006. Others of my peers would not be so fortunate.

I may be wrong, but I foresee a bidding war in the offing. My reasons follow in this short essay:

Astellas' offer is $8.50/share, or $379 million for OCAT.

1) GE Healthcare, Dr. Minger, had nice things to say about OCAT's cell regeneration technology a year or so ago. It is moving, or has moved, its HQ to the same city in Mass. where OCAT is located. There is a vimeo.

2) GILD has acknowledged via CEO that it is looking for a new "cornerstone" molecule---why not an entire cornerstone platform?

3) JNJ is always on the look-out for new companies to place under its corporate umbrella, where those companies operate quite independently. OCAT's CSO, Dr. Lanza, and his team would be comfortable there, IMO.

4) PFE is currently working in U.K. on similar dry AMD eye technology using a film -based system that is said to place cell-regeneration molecules in same place in eye as OCAT. I have been wondering whether PFE might face patent infringement problems from OCAT IP. PFE would have a solution to any such problem by simply submitting a bid for less than the cost of a typical patent infringement suit; it would also acquire a superior technology, IMO.

Any of the above companies could easily outbid the Astellas' offer of $8.50/share. IMO, a bid of 3x that $8.50, or $25-26/ share, would be far more acceptable to OCAT SHs. That would amount to $1-1.2 B.

I have seen bidding wars develop before---remember the JNJ and BSX war for Guidant some years back? Then, too, there was the auction process for Amylin a few years ago. The opening bid was set for $25/share. BMY/AZN combined to bid a TO of $31/share that won the day against 4-5 others.OCAT's technology and IP will prove to be far more valuable than that of Amylin, IMO.

The above reasons for an increased offer price are best amplified here, Dr, Lanza speaking:

http://bit.ly/1GZ7DQg
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