investora2z
11 years ago
The benefits of the acquisition may take time to translate into revenue and profits, but the spurt in price of OPKO over the last few months has made it a better deal for PROLOR shareholders. A recent article on SA has recommended to buy OPKO due to its innovation pipeline, backing of Dr. Phillip Frost, and a huge short interest which may lead to a surge in demand for the stock. The acquisition is expected to broaden OPKO's portfolio, and strengthen the pipeline of therapeutic and unique diagnostic products. PROLOR's technology platforms and R&D infrastructure are expected support OPKO's growth strategy. However, it is important to remember that the stock is now trading at high valuations, mostly based on future expectations. It is true that the revenues have grown exponentially over the years, but the bottom-line has remained negative. The debt is also a bit high. On the positive side, OPKO's 4KScore diagnostic test could generate significant annual revenues (estimated at $1.8 billion) in due course, which could easily take care of the negatives in the balance sheet. Dr. Frost's active presence on the board and as an investor is a major reason to remain confident about the company's prospects. Frost looks for synergies between his various companies. For example, OPKO has an agreement with Biozone (BZNE), another company where he has a stake, to use / explore the possibilities related to Biozone's proprietary drug delivery technology (QuSomes). The delivery technology can help in reducing cost of manufacture of formulations. QuSomes are likely to be in great demand from pharmaceuticals companies who are looking for more cost effective methods of manufacture of formulations / injectables. So OPKO has a lot of potential, but the huge run up in price is surely a reason to remain a bit cautious.
someconcerns
11 years ago
Hi John,
Yeah, I guess we are not the only "Frost groupies." I have PBTH, OPK, PGLC, ROX and CDXC among his investments. Somehow I never did SafeStitch or MusclePharm. Lets hope these are all winners, with a focus on PBTH and OPK for now.
Steve
someconcerns
11 years ago
It is virtually certain that the merger/acquisition will take place. All the legal investigations are basically "ambulance-chasing" attorneys (with apologies to one cousin who was an ambulance chaser) looking to score lead position in a class-action suit which they hope will turn up some misdeed, like the BOD not performing their fiduciary duty to shareholders. Usually, absent a smoking gun or clear self-dealing, it is hard to win such cases. Often, cases are filed simply in hopes of scoring a nuisance settlement from the company being sued, with the attorneys taking at least one-third of that. They are easy to file and these guys have the templates all ready.
If you do a google search on the names of the law firms soliciting PBTH shareholders as clients, you will see they have filed many, many similar suits on virtually every merger/acquisition.
While I personally felt that PBTH had a ladder of success ahead of it as an independent entity, I also own some OPK shares and am mollified by the higher price.
All of the foregoing is just IMHO, and does not constitute investment advice.