Replies to post #246043 on Avid Bioservices Inc (CDMO)

[eb0783]

Joe, that is exactly how I have been expecting things to go. We shall see what we shall see. :-)

[north40000]

You neglected to mention the $1.72/share annual dividend GILD currently pays.

[JamesGMS]

Joe, now you're starting to get the idea :)

But an outright acquisition - at least at the approximate $86 per share price your example below implies - is not in the cards. It's simply not enough - even with the prospective stock appreciation you describe - as then a huge portion of the true and future value of Bavi and its progeny would ultimately go elsewhere.

MD, if Bavi is the cornerstone molecule GILD is looking for

then $20 billion may indeed be the initial cash offer, but no way Garnick, SK, ES et. al. will settle for that. They want a piece of the action in the future. How does that happen then? GILD offers PPHM cash AND stock.

What if GILD said, "OK, we offer $20 Billion for US rights AND 1 share GILD for 5 shares PPHM to your stockholders."

This is a more plausible way to get to the high numbers bandied about from time to time on the Board.

****EXAMPLE: Joe Six-Pack IHUB Member has been averaging down for the past 2 years and now has 65,000 shares accumulated.

CEO John Martin of GILD gets aggressive and makes the above offer.

How does Joe Six-Pack do? Well, he does quite well with the initial offer, but he'll do even better if he sticks with GILD.

The $20 billion cash gives Joe about $20B/300M shares (shares outstanding will increase in the future, hey, that's Biotech, out of the kitchen if you can't take it), which = $66/share, which gives Joe $4.3M for his Biblical patience. Sounds fine, but ah, we're just beginning.

Joe's 65K shares will entitle him to 65K/5 = 13,000 GILD shares, which X closing price today $102/share gives him another 1.32M

So I would suggest you try remodeling the deal as the purchase of a 50% partnership interest in the worldwide rights - for a price in the 15 to 20 billion dollar range {which would then of course value PPHM at twice the negotiated number} - and placing the stock and cash portions on at least an equal footing - while also granting GILD an option to purchase the rest in say - seven years - at then fair market value.

If something like the above came to fruition - then I believe we'd finally have a deal that the board and all us long suffering old Joe Six-Packs would be quite pleased to accept.

Of course the punditry out there would TOTALLY FREAK OUT when the deal was announced - and say John Martin and the GILD board have totally lost their minds. But hopefully a few would remember the deal GILD struck in 2011 - paying 12 billion for a phase II drug - and for just one indication - and in a crowded field at that.

WELL, we all know how that turned out.

Have a nice evening.

James

[Protector]

sulaco, I fully agree because corner stone molecules is not something that grows on trees and is available in abundance.

If Bavituximab is a cornerstone molecule candidate for some BP then we are talking about a complete different dimension.

You know, a buyer always likes to evaluate your cost and then offer you something that he thinks is a good price plus good profit and some potential.

But you understand that they NEVER will from themselves include the fact that your, say, 15 years research results in something UNIQUE.

One can do 15 Years of research and end up with something of value but nothing like bavituximab. So the WHAT must be taken in account. And that is where BP doesn't like to go because they know potential is something THEY want to put in their pocket. They just want to cover your past cost, give you a risk bonus and a potential bonus ones they now your stuff works. That is CHEAP for them because they only buy the winners.

It is NOT going to work with PPHM. The complete company structure is set-up for this not to happen, starting with King being Co-patent holders, the poison pill, a closed BoD guarding the poison pill (guarding=making sure the PP is activated when the conditions allowing to do so are met) and currently we have no more external financial pressure that could force us into accepting certain deals (such as bankers and venture capitalist that only see leverage over time and couldn't care less about the passed effort), potential etc because that brings them nothing and if they want that they simply reinvest in the acquiring party.

[CuresForHumanity]

Joe six pack sounds like me, except for the gender difference and I don't drink beer :-) I have been putting my monthly pay into this stock and if this comes even close to what you're envisioning or 101T - I will be the HAPPIEST chick in the universe ... besides the other females investing in this :-) :-) :-) please somebody with big positive green candlestick money vibes be right!!

[itsabouttime]

Sulaco Hope your scenario plays out exactly that way. I own GILD shares so works very well for me personally. I am also interested in seeing how AZN fits in since I own shares in this to. Should be interesting. I sold more of my PFE shares to buy more PPHM.