Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Nolupus
I think a deal on the Rest of World rights on Lupuzor of possibly £10m upfront plus and royalties etc given that Alora has invested $25m to fund the Phase 3 plus chucked in c£1m at 11p for the US Lupus rights representing 60% of the world wide Lupus market.
I think a deal on CIDP for global rights could be done at c£10m /15 m plus royalties.
Immupharma is trying to become a royalties income company with a R&D operation in France.
So two upfront payment deals on the late stage drugs could yield c£20/25m in commercial deals which is peanuts in the Global pharma industry imho.
Nolupus you that many a slip between cup and lip.
H2Nick
I expect the arbitrage opportunity to narrow tomorrow and we will probably see the SP move to c £2.40 ish tomorrow to deter punters.
The main reason for the structure of the options is to give the holders TIME ie 3 years to get the share price up to a level where they could finance the exercise of the 25m costing £500,000 which I don't think they would have the resources to do if say the SP just moved to even 10p in an AIM share.
However if the SP is 20/25p or even higher in 3 years time then no problem in financing as they would sell enough shares on exercise to repay any lender.
I don't begrudge the options to management as the stakes are so high and the salaries alone are not a sufficient incentive for them to work their butts off to make a success of Immupharma.
This is McCarthy's last rodeo and if Immupharma and Incanthera are a success he is set for a nice retirement
I wish him and the team well as we all benefit from a successful Immupharma.
Wonderful debate today on the options clauses which in a headmaster way , I will try to clarify.
The LATTER in used in the context of the mention of things, people, situations, options ,choices et al as the 2nd of the TWO mentioned with the FORMER the 1st
Accordingly if a commercial deal is done before the 3 years , the 3 years time frame becomes the LATTER and the commercial deal becomes the FORMER.
Conversely if the 3 years passes by and a commercial deal is done afterwards then the commercial deal becomes the LATTER and the 3 years is the FORMER.
God forbid there was a typo and the LATTER should have read "LATER".
I need a drink
H2Nick
Given that the Tender documents are not approved and filed as yet it is almost certain that qualifying shareholders will be those that are on the Share Register on the date the Tender Offer becomes final so there is an arbitrage opportunity here at £2.20 for a 10% twist assuming all goes to plan.
H2Nick
Be careful on that strategy as the Tender Offer may only apply to holders who were on the share register prior to todays announcement .
Dyphne Zohars's response to Lesley that the offer may clear out some sellers from the 20% free float mainly is risible at I cannot see the Institutional investors with 70% and management with 10% selling very much.
At £3 a share and at extra $20m cost, loose holders may have been tempted.
Puretech have got the Tender price all wrong by suggesting the Board feel that the value of the company's shares is just £2.50 so why should investors pay more.
Big misstep imho but can be rectified by increasing the offer to £3.
I have said this to Kana for what it is worth.
Cheers
SoundMan
I have emailed my views on this derisory offer which I suggested will fail miserably and leave us with a near $80/90m special dividend of 10% plus and we hold on on our shares for future shareholder returns to made by the company as per RNS.
I said to Kana that I bet none of the management shareholders will sell a single share at £2.50.
I await her response
ATB
The Pecker
CGT not a major factor as 70% of shares in Puretech are held by Funds with another c10% held by management who will not be selling one share.
As I have said Puretech's Board and shareholders would crack up with derision and laughter if a full bid for the company was made at £2.50 .
If the tender price was at £3 it may tempt a few and only cost the company an extra 20% or $20m which is nothing.
In my view there will be few takers at £2.50 in the tender as most investors are under water here at £2.5
leaving the prospect of a large special dividend of maybe 8% plus and we can still keep our shares.
Best option unless tender offer price is raised to £2.75/£3
I will be emailing the company with my views.
ATB
Lesley
You can keep your shares which I intend to do as the £2.50 , is on mature reflection on my part , derisory in a company with potentially c$1 billion in cash by the end of the year ( before today's Tender Offer).
On all valuation models the company is worth £4 a share minimum and clearly market reaction is decidedly muted today at this low ball offer.
Ask yourself the key question "If a formal bid for Puretech was made by a large Pharma today for £2.50 a share would shareholders accept it....no blooming way imho.
Not impressed.
Great minds think alike.
I thought it should have been $200m at buyback price of £2.75 but not bad nonetheless.
Let's see what the market says today.
To finish the point should Treasury shares be reissued in the future at say £4/5 it is a benefit to existing shareholders who hold at say £2 as the proceeds are available for distribution eg a dividend of say 5% is more valuable to the £2 shareholders if you see what I mean.
Remember shares held in Treasury are a hidden asset to shareholders insofar as these shares can be reissued by the company in new shares for funding without prospectuses, offer documents etc and the resultant funds form part of the distributable reserves of the company for dividends.
Oldernowiser
I disagree with your suggestion of a 15p dividend.
If the company feels its shares are undervalued then it should make an open offer to existing shareholders to buy back their shares at a premium ie each shareholder would be offered say £2.75 up to a maximum of 20% of their holdings costing the company approx $200m with these shares then held in Treasury.
Puretech would still have existing cash of c$300m plus balance of Karuna proceeds of $100m plus royalties due from Royalty Pharma of $400m and additional royalties, milestone and sub licensing payments from Karuna over the next few years.
Alternatively or in tandem with the offer ,Puretech should look at a major acquisition to add to its portfolio .
There are so many possibilities available to them now and Puretech management need to be innovative to drive the SP higher after 10 years of underperformance.
I can't believe the SP is still languishing at £2 after todays RNS.
A further interesting fact on the BMS takeover of Karuna is that BMS completed the deal in the knowledge that there are potential royalties payable to Puretech and Royalty Pharma of over $1billion..yes Royalty Pharma where our Non Executive Director, Laurence O'Toole is a Senior Vice President..
Cauldstream
Bristol Meyers bought Karuna Therapeutics for its Schizophrenia drug KarXT , for $14billion which got through Phase 3 trials and is awaiting final FDA approval in September this year.
The addressable market for Schizophrenia World-wide is c$6billion.
Should the FDA seek further tests in September then BMS is facing a problem of huge magnitude as the the deal is not contingent on final FDA sign-off.
This the world of international pharma who desperately need new drugs as , I have said, old drugs move out of patent protection and bog Pharma taking large risks to keep the party going.
Imho Dyor
The question investors should focus on in respect of compareImmupharma is valuation .
Is Immupharma good value at a current market cap of c£7/8m given its late stage drug portfolio in addressable markets for Lupus and CIDP of over $6b combined compared to , say, Amolyt at a €1billion with 1 late stage drug yet to be approved by the regulators.
That to me is the investment thesis.
Each to his or her views but surely nobody thinks we are worthless as was suggested a few weeks back by certain punters
Time will tell
Flash
So what if it takes 3 years
Phase 3 drugs in multi billion $ markets are rare and sought after.
For example Amolyt Pharma is being bought for up to €1billion even though its only Phase 3 drug currently for Hyperparatyroid started trials in 2023 and topline results not expected until sometime in 2025 which is just over 2 years in trials.
Does any investor in Immupharma think the company will still be independent at the end of the trials for Lupuzor and CIDP.
Not a chance imho