Talk to me CV Therapeutics Board! I’m the Owner
$1B wasn’t enough to get the CVTX board thinking about selling, but I sure find it tempting.
By now you’ve read the news. Astellas offered $1B to the CVTX Board back on Nov 14 and the board didn’t bother mentioning it to us owners. I look forward to the Boards response and take this as a flag to once again take a hard look at the Board and management team.
“41% premium to the closing share price of CV Therapeutics on January 26, 2009, and a 69% premium to CV Therapeutics’ 60-day average closing price. The proposal is not subject to any financing condition and represents a total equity value of $1.0 billion on a fully diluted basis….”
“We are surprised that the CV Therapeutics Board has refused to engage us in meaningful discussions about our proposal; however, we remain committed to working cooperatively with CV Therapeutics to reach a mutually agreeable transaction should the Board reconsider our proposal and decide to engage us in discussions promptly.” Astellas Press Release
My initial reaction is I can find better value than CVTX at $16.
Here are some thoughts I’ve posted at TMF-RB. They’re about recent events, not value.
Today
I hope whoever put this large spread trade (see below) on has a good legal team. The trader definitely knew something about the bid. [Ed: Since posting that the same idea has been floated at Reuters.]
Days don’t get much better than this. CVTX has been one of my top ten picks for a long time. Today it is my largest position.
The issue remains they are a biotech and as such:
- Danger of being run by scientists rather than good capital allocators.
- As per their last conference call, costs are increasing in 2009 beyond what I think a focus on profitability would allow.
- They are still not profitable. I have been targeting Q4 09 for that to happen and I think Charly or Karl suggested 2010 in a write-up. That is a long time for a profitless biotech to sit at around what I consider near fair value.
From 22 Jan
from SA
“CV Therapeutics Inc. (CVTX) – A biopharmaceutical company specializing in the discovery, development, and commercialization of small molecule drugs used in the treatment of cardiovascular diseases, popped up on our market scanners this afternoon, in what appeared to be a repeat play of a 5,000 contract call spread seen one week prior. Last week one investor positioned a call spread at a net of 1.55, and since then shares of CVTX have accelerated to $11.61 from $10.83. Today this investor appears to have purchased 5,000 contracts for 2.30 at the April 10 strike and sold 5,000 contracts for 35 cents at the April 15 strike. This call spread cost 1.95 to initiate, and therefore the investor stands to make a maximum profit of 2.05 if shares of the biopharm can reach $15 by the time April showers begin to fall. The jump in the share price since last week has boosted the cost of the call spread by around 40 cents.”
From 16 Jan at TMF-RB
[Commenting on the large price and volume moves] I too thought newsletter, but it was huge volume. It will be interesting to keep a close eye on.
Double volume on Friday as well.http://finance.yahoo.com/q/bc?s=CVTX&t=5d&l=on&z…..
Notice how CVTX was strong all last week, moving up as the market moved higher. Something is a foot and as there was only around 300,000 shares in play over options I don’t think that was the cause.
Buyout? Pharma are keeping their hands in their pockets right now. I know of one deal canceled at the last minute just as the final agreement was meant to be signed. Plus the huge volume is unlikely to be from insider information. [Wrong on one and maybe both counts.]
CV Board Doesn’t Have The Heart To Sell – Forbes.com. Interesting link to March 2007 article saying Ranexa was too late and stents had snatched the market.
Earnings Preannouncement From Jan 16
CV Therapeutics, Inc. (“CV Therapeutics” or the “Company”) retired over $100 million in outstanding convertible debt in the fiscal year ended December 31, 2008, through debt repurchases and exchanges. CV Therapeutics currently expects to record over $100 million of net product revenues for 2008 from sales of Ranexa(R) (ranolazine extended-release tablets). CV Therapeutics currently expects to record over $200 million of total revenues for 2009, including but not limited to net product revenues from sales of Ranexa(R) (ranolazine extended-release tablets). CV Therapeutics currently expects total costs and expenses, not including cost of sales, to be approximately $220 million for 2008, which is consistent with the Company’s previously disclosed guidance. CV Therapeutics currently expects total costs and expenses, not including cost of sales, to be approximately $35 million to $45 million higher for 2009, compared to the prior fiscal year, which is consistent with the Company’s previously disclosed guidance. Product and collaboration revenues, which are not reflected in this operating expense figure, will offset a portion of operating expenses. Net of product and collaboration revenues, CV Therapeutics currently expects to achieve a net loss of less than $75 million for 2009, not including the financial statement impact of further debt retirements, if any.
EDGAR ONLINE – CV THERAPEUTICS INC (CVTX) – 8-K – 1/16/2009.
Past CVTX analysis and commentary.
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