Ariad Pharmaceuticals Inc fka ARIA

[chazzzzz]

Hello there. Responding to your post, I used a ? in reference to "if anyone remembered what happened to Medarex" ? Meaning that this situation is somewhat similar to that but not exact.

To say that only 1 out of every 50 smallcap biotechs will be bought out basically means probably 49 will likely fail or be diluted to under a $1.00. DNDN or HGSI come once in a blue moon but that story isn't finished being told.

The problem with biotechs is they have to raise hundreds of millions just to get 1 product through development so that they can proceed to develop another product.

Now back to the buyout, I am under the assumption that RIDA will go thru the first time which would give ARIA some legroom with their finances from the milestones but the royalties will be slow because it will take time to ramp up. But still, it will take $100 million plus to get 534 thru trials. To go it alone there would have to be a shortfall somewhere along the line unless the royalties come.

Now if Rida does go forward why wouldn't MRK just buy ARIA.

From a press release: "Under the new deal, Ariad won't have to cover any development costs and could get up to $514 million in milestone payments, along with royalties. "

"Ariad will get royalty payments of more than 10 percent on international sales"

Aria's market cap is 380.74M as of now. Of course it will go much higher if Rida proves succesfull.

AS a matter of disclosure I own 7 Jan 2012 calls and 10 Jan 2012 calls and I am currently have a fat paper gain as we speak.