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Message: 4-8b guess

Just wanting to add another layer to my last post.  A hypothetical conversation, call it a dream.

Pfizer:  Don, we want to acquire Resverlogix.

Don:  Resverlogix isn't for sale, but I'll be happy to sell you Apabetalone...make me an offer.

Pfizer:  Oh, we do want Apabetalone....and everything else.

Don:  What do you think Apabetalone could be worth, what do you think its potential top earnings would be?

Pfizer:  We've crunched the numbers, and our best guess...being conservative, is that Apabetalone could mean $40 to $50 billion p/yr at its peak.

Don:  Okay....give me $4 billion USD and its your's.  

Pfizer:  No, we don't just want Apabetalone....we want your epigentic database, follow on compounds and all the rest of your intellectual property.  What's your price?

Don:  I hadn't thought of selling the whole thing, we believe our follow on compounds could be worth hundreds of billions, maybe even over a trillion.

Pfizer: Well, we're not going to be paying that much obviously....okay, we'll start with an offer of $10 billion USD.  How does that sound?

Perhaps it sounds fantastic....but then check out this article in Forbes, which asks whether BPs like Pfizer are in the drug making biz, or the money making biz.


Here's what I consider the most relevant part:

The same holds true for big companies' mergers. Initially, AbbVie ABBV +0%’s overtures to Shire were rejected by the latter’s Board of Directors. However, AbbVie kept raising its offer and eventually reached a price that Shire’s Board agreed to accept. My guess is that Shire’s Board would have preferred to have its company remain independent. However, AbbVie’s offer was such that the major shareholders of Shire stock felt it was a deal that was too rich to turn down. In other words, the major shareholders (namely, large funds, banks, etc., each of which typically own 4 – 5% of the company) felt that their return on their investment was much higher than what they expected Shire would be able to return in the next few years as an independent company. 

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