"In all things it is better to hope than to despair" (Goethe).I...

"In all things it is better to hope than to despair" (Goethe).

I think we have covered this territory already S.o.F.

Cephalon want 100% ... IMO that is their end game in the MEDIUM term. This view does allow for them to close between 50%-90% BUT, IMO, they will only do so if they believe this represents they best way to gain control of 100% Arana at the best possible price without damaging the goods.

Cephalon both want and need 100%. They know they may not get it with the first bite of the cherry. Bottom line - Arana is going private, just a question of at what price.

Cephalon will have been scarred by their experience with Sirtex and a second takeover failure would have been costly and embarrasing indeed for management (and, given the high proportion of retail shareholders in Arana, very very high risk).

Perhaps Cephalon will close with less than 90% but they would be EXTREMELY nervous in doing so. The opportunity cost of not owning Arana outright (being able to strip it down and have it focused and using its assets the way Cephalon wants), plus the risk (to Cephalon) of positive results from the pilot arthritis study, means that before they close at less than 90% there is significant merit in trying to close this out with an improved offer that is likely to get them where they want to be (ie 100%).

Valuation, I confess, it is not my kettle of fish but in essence take the top end of the acuity valuation (ie $2) and add some. What is the basis of "add some"? Cephalon's ownership significantly derisks ART621. If they close at less than 90% and positive results come out of the ART621 trial then they will pay a motherload more than anything they are going to pay now. The science behind ART621 is pretty simple - take something that works (anti-TNF's) and make it smaller (cheaper to manufacture with potenital therapeutic upside). The pre-clinical results are great. No prob's with safety to date and some signs of efficacy. The biggest risk was always finding someone to take ART621 beyond Phase 2 - Cephalon have solved that problem.

Extremely unlikely that Cephalon will pull out now, so they are on-board as far as ART621 is concerned. So Option 1 is they close with less than 90%. Option 2 is they try to get to 90% with a revised offer.

Option 2 all the way baby ... you know it makes sense. I'm Sam Kekovich. [Not really, but you get the drift].