Food For Thought, page-15

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Harymeso

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22/04/15

19:20

Post #: 15136820
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Originally posted by nikki ↑

Well I am not looking at exact wordings of the fellow members posts, but the overall sentiment of the message.. the fact that there were 2 new CEO's at Teva and two R&D rationalisations in 2012 and 2014 and MSB's products were not shelved would imply some form of validation of technology.

The contractual obligation has to be new because if that was the case there would not have been the speculations around Teva not continuing with the development after their Cephalon takeover which caused the share price of MSB to fall from almost $10. In fact I distinctly remember that after the 2012 R&D rationalisation when it was confirmed Teva would continue with heart product development, the next bear arguments were that Teva will fund a trial but it will only have 200 patients and that it will actually be another Phase II not Phase III. All of that has been proved incorrect with Teva running a trial with more than 1700 patients.

Teva/MSB deal includes all heart indications and bone marrow transplant. Teva's pipeline shows a Phase III heart failure trial and a Phase II (AMI) or heart attack trial. They also have a Phase III for Bone Marrow transplant running. That makes three active mid-late stage products.

It is rare for a large partner with such a huge stake to keep Topping up their stakes. They could but that's not mandatory. Look at companies like Johnson and Johnson, Medtronic etc. they just sit with their initial investment. The only one I have seen actively topping up their stake in their smaller biotech partners in recent years is Celgene. If Teva would have been diluted below 5% and would not have stepped up to maintain its substantial shareholder position then your observation in that context makes a lot of sense. Dilution from about 20% stake to about 17% stake is not that big a dilution to be worried about.

On your comment re takeover that obviously was a speculation then and now is a speculation again when it comes to celgene. It is one of the potential outcomes which could happen and which opportunity is created from the partnership. The premise behind the speculations are a general trend of companies who have been in partnership for a few years to ultimately be a possible takeover candidate for the bigger company in the partnership. Re Teva not sure if 5 years back it would make strategic sense for them to acquire the company but if the heart failure trial is a success, then yes they could consider an acquisition might make more sense to them rather than paying the milestones and royalties which could be substantial. For Celgene they traditionally do like to own whole technological spaces and that reflects in multiple acquisitions they do in a similar kind of technology field. The share price at which MSB is sitting at obviously helps Celgene's case if they would want to acquire the company and plus they already do have an existing cell therapy business and to top it all enough cash backing to pay several times over what Mesoblast's current market cap is. Speculation is not wrong, any company if successful could be a takeover target in future for a bigger company.. see the Teva Mylan deal.. existing partners being potential acquirers potentially get more priority in speculations as they obviously would know the company and technology in and out...

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Love you are on msb side but why the lengthy interest in Teva. It will report in due time. Suggest retire the item

Last edited by Harymeso: 22/04/15

MSB Price at posting: $3.54 Sentiment: Hold Disclosure: Held
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