Seeking Alpha

Jennifer Lynn's  Instablog

Jennifer Lynn
Send Message
Jennifer Lynn is a proficient investor, executive and manager working with analytics data to drive smart business decisions. Technology, eCommerce, Management, Healthcare, Consulting, Strategy. Passionate for Finance, IT & Emerging Markets. Email: consultbydigital @
My company:
Jennifer Lynn
My blog:
Jennifer Lynn's Blog
  • Is Disney Too Influential?

    Disney (NYSE:DIS) has proved itself as an influential company over recent years. Disney is even significant enough that it holds great consumer clout in relation to the global economy. There has been speculation Disney's strong results from it second quarter earnings report on Tuesday, August 5th were from the success of Marvel.

    "Our strategy of building strong brands and franchises continues to create great value across our company," said Robert A. Iger, chairman and CEO of The Walt Disney Company. " "We're extremely pleased with these results and we are also thrilled with the spectacular performance of Guardians of the Galaxy, which holds great promise as a new franchise for our company and once again reinforces the tremendous value of Marvel."

    Read more here...

    Tags: DIS
    Aug 20 12:05 PM | Link | Comment!
  • Merck's Idenix Deal Could Deliver Bad News For Gilead Sciences

    Merck & Co. (NYSE:MRK) took upon a risky acquisition to boost its hepatitis C drugs portfolio, by recently entering a definitive agreement to acquire Idenix Pharmaceuticals (NASDAQ:IDIX).

    A consolidation of Merck's lawsuits with Idenix's would impose possible settlement for Gilead (NASDAQ:GILD). The nearly $4 billion transaction has analysts predicting that Idenix's value is ascribed to its intellectual property.

    Merck's market valuation is estimated at $170 billion, at $58 per share. The pharma giant's shares initially dropped by a percent following the deal announcement, but quickly recovered end of day with modest gains.

    The acquisition could strengthen Merck's case if a consolidated suit is filed against Gilead for IP rights of Sovaldi. Anything that encourages settlement is going to benefit the company that can enter the marketplace, because settlement provides certainty that patent litigation just does not have, said experienced biotechnology patent lawyer, Kevin E. Noonan a partner with McDonnell Boehnen Hulbert & Berghoff LLP.

    Pharmaceutical patents are tricky. Merck and Idenix have both separately claimed IP rights of Sovaldi.

    "Big firms use patents to negotiate with other big firms, and most of the thousands of patents granted to these companies are either relatively narrow, never litigated or not significant to the companies business," said Noonan.

    Patents compel pressure to innovate. The government permits firms to create discoveries by granting multi-year monopolies via the patent system and in return, firms receive monopoly fees based on what the market perceives for a given amount of time to further the process.

    When looked at from a larger scale, pharma R&D risk could pose negative correlation with market uncertainty. Any change of standard deviation of a firm's stock price over the prior 3 years of one, would result in fallen market value per sales dollar.

    Competitors are actively partaking in patents within areas such as internal R&D cost reduction or to benefit IP cross-licensing. Open innovation today requires IP management being offered through a variety of strategies.

    A recently published interim report by IP Wales highlighted several companies traded on the London Stock Exchange's Alternative Investment Market (NYSEMKT:AIM). The report suggested that patent owners can elicit a positive response from investors by emphasising collaborative aspects of their IP strategies.

    Investors have been known to view IP as a double-edged sword. Intellectual property law in relation to consideration-based regulation and open innovation in patent law is still fairly new.

    "The problem with "consideration-based regulation" is that it is uncertain - Congress could always change the 12-year data exclusivity provisions of the BPCIA to 7 years, for example - and that sort of uncertainty inhibits investment" said Noonan. "The same is true regarding "open" innovation - if there is no possibility of exclusivity, than the only entities who can get investment to innovate are those with enough economic power to out compete smaller entities (which raises antitrust problems)," he said.

    IP-based stock investing remains reserved for high risk investors with specialized knowledge. The existing challenge appears to lie with paucity of relevant information that can assist investors to make properly informed decisions.

    Merck's interest in Idenix's "nucs"hepatitis C drug will nonetheless complement its own advanced efforts to cure patients. Merck aims to combine IDX21437 with its existing high-profile experimental oral treatments, a protease inhibitor called MK-5172 and a NS5A inhibitor called MK-8742.

    Gilead is also set to launch its three-drug combination hepatitis C pill this fall. The highly priced $1,000 Solvaldi pill reported a record $2.27 billion in first-quarter sales.

    Merck's plans are for the future.

    Investors of Merck's all-cash Idenix deal is a big win payoff but for the long term. A triple-combination therapy will take time to bring to market. Merck's single pill drug would rapidly deliver between 4 to 6 weeks, substantially faster than current treatments and those in clinical development.

    Prospects for Merck are promising. Pharmaceutical and biopharmaceutical sector shares have risen on 15% interest this year. Merck can take lead of the market because Gilead's Sovaldi cannot be treated by a given number of patients who may have many illnesses or can't be taken by a hepatitis C subtype.

    Merck's moving in. How long can Gilead remain the market leader?

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: MRK, IDIX, GILD
    Jun 13 3:02 PM | Link | Comment!
  • The UK's New Takeover Code Is The Best Thing To Happen In Years

    During the course of Pfizer's (PFE) massive $122.6b play for AstraZeneca (AZN), the new updated UK Takeover Code announced last Thursday, caused nothing but bewilderment.

    The stricter rules aimed to create transparency in the acquisitions of British companies. Instead, it had an opposite effect which baffled Wall Street.

    Pfizer is down $0.25 (-0.8%) to $29.51 as of noon trading while shares remain high for AstraZeneca which as of noon trading, is up $0.65 (0.9%) to $72.89.

    Further confusion arose for investors when Pfizer walked away from its $122.6 billion bid for AstraZeneca on May 26. Ian Read, Pfizer's chairman and chief executive, said the U.K's Takeover Code was "overly complicated, overly bureaucratic."

    Investors and analysts displayed rebellious reaction, bolstered by speculation. AstraZeneca's shares went up 1.8 percent after Pfizer's statement, then traders witnessed swings in the stock price due to the strict nature of UK laws and conflicting viewpoint from companies. Analysts were unable to decipher exact outcomes under the guidelines.

    It is highly possible the failed deal will be rekindled. With the bid now back on the table, under the takeover rule, Pfizer will be eligible again to bid for AstraZeneca before November. The company stated it would not formally bid for AstraZeneca for six months.

    "We continue to believe that our final proposal was compelling and represented full value for AstraZeneca based on the information that was available to us," said Ian Read.

    The collapse of Pfizer's recent bid for AstraZeneca is an indication of withdrawn M&A's rising. Pfizer/AstraZeneca's bid is the second largest withdrawn deal globally on record behind BHP Billiton's $147.8b withdrawn bid for Rio Tinto in November 2008.

    "Relatively slow global economic growth, lack of confidence within the M&A markets and the length of time involved to complete transactions are all factors which may have caused an overall decline in M&A activity during Q1 2014," the ONS said.

    The Takeover Panel's rules are in place to prevent companies from coming under extended siege by hostile acquirers, and to impose order on what can be an unruly M&A market. With the UK Takeover Code, the Pfizer/AstraZeneca deal will be on standstill over the next few months. After 3 months, AstraZeneca has the option to invite Pfizer to re-engage in the takeover. Pfizer also has the opportunity to offer a final bid.

    Now, with two scenarios put forth in which Pfizer can bid for AstraZeneca again, just how firm is the moratorium? The UK's Rule 2.8 statement and the standstill period are mandatory under the updated takeover code. What could possibly happen with the two outcomes remain highly debatable.

    Pfizer's efforts to close a deal with AstraZeneca were linked fear of revenue loss. Revenue concerns for the pharma company may be avoided if approval for its experimental breast-cancer drug is successful. However, rivals Novartis AG (NVS) Eli Lilly and Co (LLY) could pose threat to Pfizer's sales.

    According to Pfizer CEO Ian Read, the company will look into deals of all sizes to ensure that revenue and profits are not only secured but also improved.

    Despite the collapsed bid and grapples with significant lawsuits, Pfizer now has alternate plans to now move on. Mylan Inc. (MYL) announced on Wednesday its license agreement to sell its generic version of pain treatment Celebrex, with Pfizer.

    On Thursday, Pfizer agreed to pay $325 million in the Neurontin marketing settlement. The drugmakers growth accelerated this year amid rising sales of diagnostics, antibiotics, steroids, vaccines and other products.

    You can't always get what you want. AstraZeneca disappointingly lucked out on a huge premium. Going forward, the big pharma company remains in momentum of its operational strategies to also increase profits and growth alongside efforts to gain more market share. It is hoped that Pfizer handles UK's laws more carefully for the sequel...

    Jun 09 8:19 PM | Link | Comment!
Full index of posts »
Latest Followers


More »

Latest Comments

Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.