Biotech Values

[DewDiligence]

Re: ABT-ALR /SI charity contest

ABT's FDA warning yesterday regarding the STJ plant presumably increased the impetus for ABT to settle with ALR. Although I already thought an ABT-ALR settlement with a reduced buyout price was likely (e.g. #msg-130214843), announcing the deal now helps ABT by diverting attention from the STJ mishap.

If ABT had refused to settle and ended up being ordered by the Delaware Chancery Court to pay ALR the original $56/sh buyout price, it would've been an humiliating 1-2 punch, and ABT's reputation for M&A would've been notably tarnished.

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As far as the SI charity contest is concerned, the ALR buyout may be less helpful than I had thought. With the deal expected to close in late 3Q17, it may come too late for the reallocation of the ALR cash proceeds to add much leverage to the other picks in my contest portfolio.