NorthWest Biotherapeutics Inc (NWBO)

[no2koolaid]

Regarding any consideration of M&A, it is not so simple.

According to most studies, between 70 and 90 percent of acquisitions fail. This number has been consistent for more than a decade, it is not some pandemic related issue. As this shows… https://hbr.org/2020/03/dont-make-this-common-ma-mistake

Then there is a problem with valuing any drugs, most assuredly cancer drugs…

Merck’s Stalled Seagen Deal Shows Valuing Cancer Drugs Is Tough
https://www.bloomberg.com/news/articles/2022-08-31/merck-s-stalled-seagen-deal-shows-valuing-cancer-drugs-is-tough?utm_source=Sailthru&utm_medium=email&utm_campaign=Newsletter%20Weekly%20Roundup:%20BioPharma%20Dive:%20Daily%20Dive%2009-03-2022&utm_term=BioPharma%20Dive%20Weekender

Also, there is a problem with projecting the time to peak revenues – typically it is projected at 3-5 years. As I stated in a previous post…

Using Keytruda as a baseline example...

Merck had zero revenues with it in 2014; $1.4B in year three (2017); and $11.1B in year five (2019). In year seven (2021) they had $17.2B in revenues.

Regarding this point about a buyout…

Frankly I believe we're premature in speaking of partnerships or buyouts until our share price is roughly ten times or more than what it is today for a partnership, or nearly twenty times what it is today for a buyout. I simply don't think that LP would consider an offer that wasn't nearly double the share price and it will take that sort of share prices to meet her demands.

In consideration of an acquisition, a large, sophisticated acquirer does not use share price as any part of its calculation (e.g., imagine a calculation including the share price for GME & AMC). Typically, they do a number of analyses – DCF is one such analysis. However, based on what I can find (academic speak for personal research), the best solution is to evaluate a biotechnology firm by calculating the rNPV.

Not having the time or interest to follow this line of analysis more fully, if for no other reason than this is getting too long, just know that the secret sauce for valuing a potential acquisition target has nothing to do with the share price. Why do I say that? I once was part of the due diligence process for acquisitions for my company, one noted for growth through acquisitions. No, it was not bio or pharma firm. But business is business. On this board, I pay attention to those who speak to the science (and at times it raises my IQ level). I am merely speaking from a single business perspective. As to that, no CEO on the cusp of a major approval would entertain an offer. And big pharma knows that...for now...