Will Lar, Most on this board will find your buyout value of $35-40 too low.
Of course, the only way we will know for sure is if AMRN were to accept an
offer. Here is why I think you are too low:
$40 X 412 million fully diluted shares = $16.48 billion. Divide that by
a normal 4.5 multiple would give an expected peak revenue expectation of
$3.662 billion which would equate to around 2.44 million patients worldwide. (A number I believe is way to low.)
The whole point of being acquired by BP is that they have far greater
resources to market and distribute a drug way beyond what the target
company could ever do by itself or even with partners. Why would any
BP do a partnership deal with AMRN, let's say for Europe, that would
have them give up a big chunk of their revenues as a royalty, when
they could simply acquire the company and keep it all for their self.
That would not make any sense. This is why I believe it is unlikely
that AMRN will do a distribution deal for Europe "if" the intent by
management is to maximize the takeout price for the company.
Europe by itself is a much larger potential patient population for
Vascepa than the US by itself. Europe will have 11 years free from
generic competition starting at the date of approval. So those factors
will make Europe a monster opportunity for a BP with substantial
operations in Europe. Even at a discounted Vascepa price of 2/3 the
US price of $1800...say $1200 per year...Just 4 million patients
would produce $4.8 billion in revenues per year. Just 3 million
patients in the US would produce (at $1800 per patient) $5.4 billion.
Combined that would be $10.2 billion in annual revenues. Takeover
value at 4.5 X $10.2 billion = $45.9 billion or $111.41 today.
So what number might John Thero have in mind for a takeout?
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