Replies to post #214789 on Biotech Values

[longx]

OCRX to be acquired by Mallinckrodit for $1.52/share.

With 26.51M outstanding shares, the sale price should be at $1.58/share, right? Also according to the new release the deal includes up to $75M in development and sales milestones and I'm not sure what this means. Anyone kindly explain this? Thanks!

[DewDiligence]

MNK acquires OCRX for $1.52/sh cash + CVR:

https://finance.yahoo.com/news/mallinckrodt-acquire-ocera-therapeutics-ocr-105622493.html

Mallinckrodt will commence a cash tender offer to purchase all of the outstanding shares of Ocera Therapeutics common stock for $1.52 per share (approximately $42 million), plus one Contingent Value Right to receive one or more payments in cash of up to $2.58 per share (up to approximately $75 million) based on the successful completion of certain development and sales milestones.

The buyout price (excluding the CVR) is a 49% premium to OCRX’s closing price yesterday, but a 26% discount to OCRX’s closing price on 1/27/17, before OCRX announced that its phase-2b trial missed the primary endpoint (#msg-128251911).

OCRX is currently trading above the $1.52 cash-buyout price due to the CVR.