Biotech Values

[DewDiligence]

Re: Musings on ABT’s split-up

Might be a good buying opportunity if the market overreacts and depresses the price of the proprietary pharma successor when it starts trading. Agree that Humira risk (as far as FOBs are concerned) is overblown and the pipeline looks very solid (relative to other big pharma).

I expect the reverse to happen—i.e. that the market will overvalue the proprietary pharma successor because proprietary drugs are sexy, and the market will undervalue the diversified products successor because medical devices, nutritionals, and branded generics are not. Many investors and analysts still don’t comprehend that the future growth of Big Pharma will largely come from The Global Demographic Tailwind (#msg-61960541, http://investorshub.advfn.com/boards/replies.aspx?msg=61960541 ).

If I could decide today, I would probably keep the diversified products successor and dump the proprietary pharma successor. (I say “probably” because there are important details to be determined, such as the balance sheet each successor company starts with.) Alas, I won’t have the option of doing this until shares of the pharma successor company begin trading on a when-issued basis many months from now. Consequently, I’ll probably just hold my position in ABT until then.

Comments?