Avid Bioservices Inc (CDMO)

[sulaco]

PPHM buyout potential


Let's say AZN/GILD/JNJ or RHBBY buys PPHM for:

(with 333 million shares outstanding)

$10B = $30 pps
$15B = $45 pps
$20B = $60 pps

In my view, this sort of buyout would occur only AFTER the NCCN trials, when Bavi is shown to triple the responder footprint for anti-PD1 Mabs. This ability would be extremely valuable to Big Pharma, and would likely set off a war for PS blockade and its tumor microenvironment conditioning effects.

These effects include a 40% reduction in MDSCs, repolarization of immunosuppressive M2 macrophages back to M1 macrophages, electromagnetic charge restoration to the phospholipid bilayer, thereby enabling docking of multiple cytokines and immunostimulatory proteins back onto the cell membrane (impossible with unmasked PS extroversion.)

This synergy reconditions the tumor microenvironment back to a Th1 orientation, prompting massive increases in interferon-gamma, CD8, and natural killer cells. In short, an assassin's immune system. Throw in Sunrise-derived biomarkers to cherry-pick the patient population destined to respond, and Big Pharma will go berserk over the results.

Obviously, with an RS, the pps would have to be much higher to give the similar multiples, given the 3-7 fold reduction in outstanding shares.

e.g.

(with 50 million shares outstanding)

$10B = $200
$15B = $300
$20B = $400

This is clearly ICPT territory. You get the right drug that Big Pharma wants, and all bets are off. The drug can go from $30 to $500 in ten days.


Best to all, especially 9/24/2012 (Black Monday) longs,

Joe Six Pack