Biotech Values

[DewDiligence]

Thanks, Tinker, for your reply. Good to know that we agree on two of the three points. Regarding the equity component of the deal, you said:

I see it as rather the reverse. It was a "without tysabri" premium.

I do not understand what you mean by this. In the equity component of the deal, JNJ’s shares are no different from any other ELN shareholder’s shares—i.e. they include both upside and downside stemming from Tysabri. Moreover, if you consider JNJ’s equity purchase to be at a premium to the market, then this premium ought to be factored into the implicit valuation you ascribe to the 25% stake in Bap that JNJ acquired, which would make the deal look considerably better from ELN’s standpoint. Regards, Dew