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You can see by today's insipid market reaction to the 2024 Final Results that the Board of Puretech are wasting their time trying to convince the market of the share price undervaluation and after throwing away $150m in buybacks and the Tender Offer, they now must be so frustrated and quite rightly have seen the light ie sell the company to the highest bidder as the market is not going to adjust the SP for a very long time with so few catalysts this year.

Any offer above £2 would stand a chance , sadly a long way from what I thought the value of Puretech was a year ago.

JSB

In both the Chairman's and Chief Executive's Statements they recognise the total disconnect between the share price and the underlying business fundamentals and say they are actively looking at ways to address this anomaly including taking Puretech private as in the case of the aborted recent offer from private equity.

I suspect the recent approach has sparked the Puretech Board into action and the company is now open to acceptable offers.

Accordingly the need to fund LYT-100 and maintain cash resources strongly suggests that a buyout is imminent and as such I am going to hang around for a while .

ATB

Investhome

If Puretech spin off LYT-100 and Gallop Oncology then the big question is , what is the point of holding c$300m on the Balance Sheet with Cobenfy royalties coming on stream in the next few years.

This is the key question investors are asking

Management appear satisfied with a big cash pile to pay huge salaries and conduct R&D without fulfilling its primary duty in enhancing shareholders value.

It is much too cozy for my liking and the results next week had better come up with some strategies to move the SP forward or else the big Institutional investors may push for major changes.

JSB

The average costs of Phase 2/3 trials range between $25m and $40m.

Puretech have just two programmes LYT-100 and Gallop LYT-200 at trial stages so maximum costs should not exceed $80m to $100m .

So Puretech has cash of c$300m so it is time for the excess funds to be used wisely either via another c$100m buyback or acquisitions.

Management need to be proactive and concentrate on increasing shareholder value or let another player / Pharma take over the responsibility

So far Management has proved inept at increasing the share price .

The annual results next week are pivotal imho.

The clock is ticking.

JSB

Also remember Puretech is a US centric Pharma with all of its drug therapies development activities in the US and will not be affected by the Orange Moron's pharmaceutical tariffs which by the way will drive US consumer drugs prices through the roof as most of the major drugs are manufactured in India, China and Europe.

Cobenfy can be produced in the US initially but if International markets introduce reciprocal tariffs BMS may have to use its international manufacturing facilities to produce the drug for these markets.

Puretech shares down 13% on Nasdaq

HarChris

Not the point I was making.

The Nasdaq Puretech SP closed down yesterday despite the big rally and is down again by 10% today.

The UK price is also slightly down today despite the FTSE rally.

So everyday the selling continues regardless of the market which I find astonishing

Cheers

PS

The share price being hammered on the Nasdaq down 10%.

Astonishing

JSB

Agree it looks like game over for this management team and indeed the Hub and Spoke model.

The Institutional investors account for over 65% of the shares in issue and having given Chowrira over a year or more and seeing the results of his ineptitude, I feel they are ready to exit particularly Invesco who hold c17% of the shares and have been in since the beginning.

Sell now before any more cash is expended and hopefully at a fair price.

ATB

Kats

I did say "reputed "and " possibly" in relation to the Nordic bid.

It seems a reasonable figure given the SP was around 130p at the time and the cash levels of c120p.

Theta

The fact is that Puretech has not used its cash wisely with c$150m in share buybacks failing to stimulate the share price over the past 2 years.

However if the management rejected the Nordic offer as too low , it must demonstrate to the market that it has a short term strategy to drive the SP beyond the reputed offer ( possibly £2) .

Puretech's cash holdings and expected Cobenfy royalties are too high not to be adventurous and bold in management's short-term planning.

Given the only expenditures are in developing LYT-100 and Gallop Oncology ( LYT-200) then there is sufficient scope to release c$100m in further buybacks or bolt on acquisitions .

If the management believe ,as we all do , that the company is seriously undervalued then buy back the shares and reduce the shares in issue to c180 million through a $100 m buyback or make an acquisition of a revenue generating BioTech company for even $200m

There are plenty of good companies out there whose values are bombed out and ripe for takeover ( like Puretech).

They must be brave and remember any shares bought back are put into Treasury shares which can be reissued in a fund raise at a higher price without the need for a placing/ rights issue documentation or formal EGM approval.

Time for this highly paid cozy management team to front up and do its job.

Golfnut

No major reaction in New York with the Nasdaq price flat so far.

Interesting

Golfnut

They better get out of their shorts ASAP tomorrow.

Short closing could accelerate the SP repricing to realistic levels tomorrow imho

Clowns

The yellow moron has blinked in the face of the markets collapse and the US Treasuries under the greatest pressure in decades which had the potential to drive US Interest rates to over 8%.

The Bond Market always wins particularly in a hugely indebted nation like the US.

Great news

Theta

Good post and analysis.

However one of the key factors facing the Pharma sector is the Trump tariffs because much of its drugs are manufactured in India , China and Europe including Ireland.

Puretech in this regard is in an enviable position as a total US centric Pharma and drugs development company with almost all of its activities based in Boston.

The only issue maybe is where BMS manufactures Cobenfy which if it is in the US then a further threat

to Puretech's status is secure in this environment.

This could make the company even more attractive to predators both US and International imho.

The fall in the SP today defies logic but so does many things in these crazy markets.

Many of the MAGA voters rely heavily on the lower drug prices instigated by Biden under the Medicare programmes but Trump has little or no empathy for the poorer members of the cult.

And don't forget Gallop Oncology( LYT-200 solid tumours programme) currently given FDA Orphan Drug Status and now conducting Phase 1B clinical trials.

In addition the company has intimated that some further exciting drug therapies are in the offing and may announced at the time of the 2024 Final results due in 2/3 weeks .

ATB

Golfnut

Apologies

Two RNS today are disclosure of interests over 1% per Takeover Code.

I have just read them as earlier I thought these RNS were shorts disclosure...stupid me.

Both shorts disclosures today were taken out by latest yesterday BEFORE takeover announcement.

I think that both shorts are now very vulnerable and may try to close ASAP after Nordic approach imho.

Price action today is beyond baffling.

So what's new !!

Standard takeover strategy

Bid rejected by management but Nortic can come back with an improved offer that is acceptable to management.

Nordic withdrew it's bid as it knows it will not succeed without management/ Directors agreement.

However it does not prevent Nordic from buying shares in the open market

I suspect Nordic will not walk away after a first refusal and other players will now enter the bidding process.

Puretech are so undervalued it was inevitable a bid(s)

would appear.

Keep the faith

Read in full

Nordic reserves the right to make a further offer over the next 6 months and Nordic is being advised by Morgan Stanley International.

Opening salvoes and Puretech is now firmly in play.

Games being played and I suspect BMS is not of the picture.

Game on