Quote: At the moment they have a single drug with a defined lifetime..
This is like saying Secretariat was a horse...EPA which Amarin holds controls an essential process at a fundamental level...And this is something we have never seen before in medicine..As far as the drug having a defined lifetime..I do not agree...There are more ways to hold onto drugs or food stuffs..than patents...CocaCola has been around the entire 20th century and is still doing a landfall business...Money talks and Amarin is going speak many languages...Amarin will be able to fend off competitors or buy them...AMZN has a very simple and some would say obvious strategy...and still there are no competitors...Because money talks...In the real world there are buyers and suppliers and if you have more money and more business you can stop your competitors in ways that do not violate the Sherman Antitrust laws...and you can easily buy off the politicians..
I've analyzed a number of Biotech's and the number I come up with is 30%. Amarin could get to 50% if they do absolutely no R&D and some other things but I like to go off historical data as much as possible and be conservative.
So 2.25 Billion to bottom line and 450 million share outstanding eventually is about $5 per share but I'm completely on-board with the way your analyzing it and the same way I've been doing it.
However BP would get the 75-80% margins and little other costs so.....
Thanks Tasty. I understand the difficulty in using earnings to value any deal as you point out. What I am thinking about is that the acquiring entity would have to get their return on the investment out of earnings (or whatever else they can find to use V for) albeit like you say their earnings would be greater than Amarin’s due to better margins and lower cost.
I believe yours is a very fair estimate for both parties I only hope that there aren’t some inflated egos in management that don’t let this type of deal be presented to shareholders.
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