Replies to post #227074 on Amarin Corp Plc (AMRN)

[Will Lar]

Could - I wouldn't believe anything AF said. My understanding (iBankers can correct me on this) how acquisition premium is assessed is based on

1. Cost synergy
If a BP can plug V into its existing sales channels, then it will cost less for it to sell for the same revenue than another BP who needs to build a completely new channel to do so. Part of or entire of the cost savings can be added to the acquisition premium.

2. Sales synergy
If a BP can sell more of its existing drug with V, then it can add part of or even entire additional revenue to the acquisition premium.

3. Strategic value
If a BP wants to get into a new market and is willing to pay for the entry, then it can put up whatever value it deems appropriate. This more often happens in a brand new, growing market, such as Crispr based gene therapy for genetic diseases market, or Facebook's acquisition of What'sApp or Instagram for social on mobile market in 2013-5.

I can only see AMGN fits into #1, barely. PFE has both 1 and 2 at least.