Replies to post #85366 on Biotech Values

[mcbio]

CRA - activist shareholder (MRK's odanacatib)

[As noted in #msg-42858798, CRA is also due royalties on PCYC's compounds if they succesfully make it to market.]

http://sanfrancisco.bizjournals.com/sanfrancisco/stories/2010/02/08/daily38.html?ana=yfcpc

Celera shareholder wants royalty spun out
San Francisco Business Times - by Ron Leuty

An activist Celera Corp. shareholder wants the medical diagnostics company to “decouple” its royalty interest in a late-stage Merck & Co. osteoporosis drug.

Biotechnology Value Fund LP, which over the past year has accumulated about 9.8 percent of the stock in Celera (NASDAQ: CRA), said in a Securities and Exchange Commission filing Tuesday that the Alameda company should spin out or somehow segregate and distribute the potential royalty from Merck’s odanacatib.

Odanacatib is in Phase III clinical trials involving 20,000 postmenopausal women.

The royalty could equal a “mid to mid-high single-digit” percentage of Merck’s revenue, Chicago-based BVF said in the SEC filing. That “could generate tremendous free cash flow for (Celera’s) shareholders” and could be worth “a significant multiple” of Celera’s current market value, BVF said.

The change also would clear the royalty asset from the risks of Celera’s diagnostics business, BVF said, and leave the company free to pursue its business “without limiting the extraordinary potential upside of the royalty.”

Celera stock, which opened the week at $6.24 per share, closed Tuesday at $6.58.

Email Ron Leuty at [e-mail] / [phone].