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FWP - Forward Pharma A/S


writser

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You're wellcome, Jurgis,

 

Please note my two edits in my last post - I have marked them up.

 

- - - o 0 o - - -

 

<Edit 1 begin>

 

Genmab founder gets goldplated - pays out DKK 3.7 B to him self.

 

- The CoBF members are where there is gold - and blood!

 

Attached is the official 2016 financials for this sucker.

 

<Edit 1 end>

offentliggorelse_Forward_Pharma_AS_2016.pdf

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Oh well,

 

Now I see, the headline in the boersen.dk article changed to:

 

"Biotech pantent gave Jackpot - Straw man pulls out DKK 6.8 B"

 

I sware to my fellow board members, that my initial translation of the original headline was correct.

 

This is one of the parts of Nordic culture, that is really nagging me: Law of Jante. This is to me just so sick.

 

This "law" is appearently still ruling at the leading media about Danish Business, applied to successful persons in business.  Mind bogling to me.

 

Again: Oh well.

 

As I have stated before here on CoBF, leaders of successfull businesses here try to stay low, the business being public listed, or not.

 

Our fellow board member StubbleJumper calls it "to try not to be a Hot Dog".

 

So much for this.

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  • 2 weeks later...

http://ir.forward-pharma.com/phoenix.zhtml?c=253796&p=irol-newsArticle&ID=2291291

 

"Forward has received a ruling from the Danish Tax Authorities covering holders of ordinary shares and holders of Forward’s American Depositary Shares (“ADSs”). Based on the ruling, the Company will not be withholding any part of the proceeds from the Capital Reduction for Danish tax."

 

Now it's time to value the stub. Pay-out $23.05. Stock price $23.44. There is one thing I'm sure of: the stub is worth more than $0.39.

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What's your reasoning there? Is there something about this specific interference proceeding that makes you think they've got a good chance at appeal?

 

Seems non-trivial to even try to figure out the success probability implied by the stub. You have two separate legal proceedings that are not likely totally independent outcomes, and have to guess demand/pricing for the drug when it rolls off patent, etc. Lot of assumptions on a fairly stretched out stream

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  • 2 weeks later...

This turned out ok so far.

 

What's your reasoning there? Is there something about this specific interference proceeding that makes you think they've got a good chance at appeal?

 

Seems non-trivial to even try to figure out the success probability implied by the stub. You have two separate legal proceedings that are not likely totally independent outcomes, and have to guess demand/pricing for the drug when it rolls off patent, etc. Lot of assumptions on a fairly stretched out stream

 

Good point, but as a base case there should be some cash left. FWP received $1.25b start of this year. Substract estimated taxes and the payment to Aditech Pharma: $0.95b. Amount was converted to euro's at the time with an ~1.06 exchange rate: ~900m EUR. The total amount to be paid out to shareholders is ~920m EUR. They started the year with $138m in cash, which would mean they still have ~$100m+.

 

Up to you to determine how much cash they burned this year in R&D, SG&A and severance payments but I think it is unlikely that it would be more than $50m as that is about as much as they burned in 2016 and 2015, while R&D was still ongoing. My best guess is they left $50m - $100m with the stub, or ~$1 - $2 per share. Assuming FWP approaches the lawsuits somewhat rationally I'd agree that $0.39 is cheap for the stub. Current implied price is around $1 which I'd say is about reasonable (unless you have some specific insights about the lawsuits).

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Forward Pharma (FWP) just traded at $4.62 and has a bid/ask of 4.65/4.84. I assume FWP has about $77M of cash ($11.00 per ADS-equivalent) and no liabilities and will like run down another $10M over the next year and a half (to $9.85 per ADS) based on recent pace of $5M annual spend.

Steve

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