You raise an interesting point; that is, if 1-2 NDAs are filed with an expedited review, big pharma has a blueprint for success. Would they wait until formal approval before making a move to acquire Elite? Perhaps, but it would not be fiscally prudent. The better time to make an offer would be prior to approval, as it would allow them to acquire Elite at a lower price. Nasrat understands this and what we will not see is the behind the scenes jockeying that would position Elite to be acquired for the best possible price. Part of that will be the opportunity to manage multiple bidders. All we can do is speculate. So, since that is what we can do, let's do it...
As I have said before, the valuation would be the basis for the start of negotiations. Also, as with buying and selling homes, businesses to be acquired are evaluated based on comparable/similar businesses. In my opinion, one key comparable firm that was acquired was King Pharma; which was acquired by Pfizer for EpiPen AND EMBEDA. The price was $3.5 Billion. It is not unreasonable to believe Elite would garner a higher price. There are a couple of different calculations that might offer us some idea what that might be; but let's leave it at $3.5 Billion and let's use a couple of conservative estimates. Our first estimate would be that all 995 million authorized shares become shares outstanding. A little simple math gives us an acquisition price per share of $3.52. What is also conservative about that calculation is that, it is only about a 30% premium above the midpoint of the valuation share price. I believe this is conservative and that Elite will fetch a higher price. But, that is only my opinion. Why do I think that? Because the basis for making an offer for Elite will be based less on comparables and more on the potential market share it could win with its novel tech. To avoid confusion, I will offer that calculation in another post.
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