July 11, 2012

I Love It When A Plan Comes Together

(I liked the movie remake, despite being a fan of the original series.)

I've enjoyed immensely interacting and sharing information with other large shareholders over the course of my share ownership of Provectus. The blurb below, from the Medical Technology Stock Letter, was e-mailed to me by one of these folks (underlined emphasis below is this person's):
Amylin is being bought for $31 per share by Bristol-Myers who upped their bid from $22 last weekend to close the deal. And then in a stunning and unusually creative move for Big Pharma, Bristol went out and teamed up with Astra-Zeneca who bought half of AMLN for $3.4 billion. The fact that another biotech has been bought for a substantial premium by Big Pharma is positive as it signals that M&A in biotech remains hot. Bristol is really stepping up their M&A pace as this is the second big deal for them in 2012, they paid $2.5 billion to acquire the hepatitis C company, Inhibix. The company is trying to replace their top selling drug Plavix which went generic last year and represented $7.1 billion in sales. Big Pharma is in big trouble as last year they lost patent protection on drugs valued at $34 billion in annual sales, an amount that is estimated to grow to $147 billion by 2015 according to data compiled by Bloomberg. The Bristol deal is the fifth sealed in 2012 for more than $1 billion, almost doubling the rate of the previous two years. We are clearly on the cusp of a long-term trend as there are not enough new drugs in Big Pharma’s pipelines to drive top-line growth. 
Another important positive from the deal is Big Pharma’s willingness (at least Bristol-Myers & Astra-Zeneca) to work together and be creative as they slice and dice up the best of biotech’s developed drugs. Bristol and Astra also helped themselves by avoiding a bidding war as they could have easily driven the price for AMLN higher if either party had been too stubborn to ink a 50/50 partnership.
In my view, the essence of the blurb rather aptly summarizes the company's current situation.

To answer a blog reader question: I do not know when Provectus will announce receipt of the SPA. I still speculate mid-July [for an official announcement] (recall I previously speculated as early as late-June), but management's guidance was base case Q3. Q3, rather obviously, comprises the months of July, August and September. If no more details are to be hammered out, what only should remain is official notification. There is, however, a difference between agreeing with the FDA on the SPA, and announcing its official receipt.

I close with another much appreciated blurb from the same shareholder [who provided me the one above]. It's from a SeekingAlpha article on Gleevac in which the author's comments crystalize the opportunity with Provectus (in the view of the shareholder):

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