Replies to post #70989 on Biotech Values

[acgood]

Looks like someone may have bought at $2.00 after hours without reading carefully enough to see that the $2 preferred shares are convertible to 3 ordinary shares at only a modest premium

[DewDiligence]

Re: LJPC

Why wouldn't BMRN buy them out considering their market cap was about 40-50 million before and according to Yahoo about half of it is cash?

Yahoo’s balance-sheet info is crude and often wrong—you get a much better picture by reading SEC filings. At 9/30/08, LJPC had about $16M of current assets net of current liabilities.

Why an option to partner rather than a buyout? I can think of two reasons: i) The minimum commitment is less; and ii) The companies probably couldn’t agree on a buyout price.

[rkrw]

It would be expensive to acquire. So they buy the whole company at some price, then they'd have to eat the expense of the trial, la jolla burning about $17M or so per quarter. I doubt m&a was ever considered. The way its structured Biomarin pays but its on la jolla's books, so its not a P&L hit for bmrn.

Hindsight will be 20-20 but there's no such thing as 50/50 with a lupus trial. Cellcept is a standard of care in lupus, published in the NEJM, even that failed.

<<Personally if lets say there is a 50/50 chance of success I would like BMRN to do 2-3 more of these deals and say we get one solid product out of it wouldn't be too bad in my book>>