VRX buying SLXP for $14.5 billion is a huge deal. For one, SLXP is a piece of shit, which recently descended into hell after bad data. But like most biotech stocks, once the stock got flushed out, bargain shoppers stepped in, jacked the price higher–leading to a takeover.
In order to properly asses this deal and not get overly excited about the piece of shit micro caps that you own, let’s look at SLXP’s numbers.
1. The deal is being done at present levels, without a premium. This makes sense since SLXP is a piece of shit and is up 53% over the past 3 months.
2. SLPX’s market cap is $10 billion.
3. SLXP does over $1.3bill in revenues, growing in excess of 40% per annum.
4. SLXP is trading 7x sales
5. Up until recently, SLXP was netting between $20-50 million per quarter. Right now, they are bleeding out, likely due to ramping up R&D or marketing.
6. The company specializes in gastro-ailments.
Using the company search tool in The PPT, here are some results.
By industry:
ANIP
VIVO
ARDX
ASMB
ETRM
IRWD
HZNP
TRGT
SNGX
SGYP
By the numbers.
JAZZ (best match)
MDVN
PCYC
BMRN
ILMN
Fly I own shares of SLXP. What are your thoughts on rolling into VRX with the proceeds?
I’d hold in case of higher offer from another pharma.
After a pullback of course, VRX looks quite extended.
Yeah, I agree. Somehow I really doubt that happens, but we’ll see.
ZTS, ABBV or Shire are all possible contenders.
OK thanks. I recently started a position in ABBV. Chart looks really good to me.
Senor Le Fly,
Would you consider VRX a long hold? I grapple with the euphoria of having a locked in win vs. hanging on for the big gains. Picking a stock is one thing I’ve learned from here; knowing when it’s time to click sell is something I have yet to master.
I would sell VRX
I bought in Jan. at the $155 level.
Shillinger !!! Beecher gonna get some lovin tonight !!!
Senor Fly. What do you make of the $SNE comeback? This has been a dog so long. Is it possible that it is $AAPL 10 years ago?
No way. SNE sucks
To be fair, the first time the VRX buyout was rumored SLXP was trading around $135
http://www.bloomberg.com/news/articles/2015-02-03/valeant-said-to-weigh-takeover-of-salix-in-latest-pharma-contest?cmpid=yhoo
shillinger won that shit
Good to see your bottom line 5 all in my eventual basket. Monsters. For now, CELG (bid is fucking ferocious — over $125 we are going to rip a face or three), ABBV ALXN, DRNA (zygote) are my bios. After scanning and charting maybe 100 of my favorite bios, MDVN looks ripe as fuck. ILMN REGN GILD (being a little girl — wait for it — has more cash than the Vatican), and RMD (medical devices << divy, cash machine) are on my watch list for triggers. For those that partake in zygote bio (OVAS JUNO KITE BLUE + a million more on StockTwits) << could be in for some G-force rippage.
Bears are going to a Cro Cop kick to the face tomorrow.
Cheers.
check out MD–great growth and numbers.
What about weed? INSY GWPH?
PPT tomorrow
Mom’s Old House.
Plumbing.
Where is that tornado of my nightmares.
The many; where no one gets hurt.