Me: Swami, thanks for taking my call. With the credit markets in turmoil and this election business seeping into daily conversation, you must be mighty busy. Anyway, might you be able to find the time to predict the outcome of the ImClone / BMS / Lilly acquisition? Mind you, I have no financial position in any of the companies, this is for the sake of posterity.
Swami: No problem. Shouldn’t take too long. Let’s see what we have here….
[I assume his eyes gaze through the wall, focusing on the distant horizon. It's hard to tell since this isn't a video conference but the Swami has a flair for the dramatic.]
… yes, yes. It’s getting clearer. I’ve got it, but you’re not going to like it.
Me: Try me.
Swami: Eli Lilly buys ImClone.
Me: Way to go out on a limb, Swam
Swami: What do you want me to say? Did you think there would be a vicious bidding war between a few major players, ending with an +$80/share price? You must be confusing big pharma with a flock of irrisponsible sheep.
Me: Well, what about Pfizer? They’re sitting on almost $30B in cash, an inadequate pipeline and an itchy trigger finger to do… something.
Swami: Pfizer is laying off employees and is in the midst of the largest cost cutting effort in their history. They are slimming down. They are shooting for lean and hungry, not more bloated and stuffed. I’ll ask you, is now the best time to spend over $6.1B on one approved drug and small handful of clinicla stage drugs, some of which they might not fully control?
Me: Fine… but you had to at least consider Bristol-Myers Squibb, right?
Swami: Of course, I considered BMS. The fact is, even if they had cash to compete with a Lilly offer in the mid 70’s, the recent communication between the two companies have been contentious as best. Not the best way to begin a merger, wouldn’t you say? By the way… bit of negotiating advice… don’t burn bridges until you’ve crossed them and have no intention of going back.
Me: Well, im kind of… dissapointed. I wanted fireworks.
Swami: I don’t know what to tell you, kid. I call ‘em like I see ‘em. This isn’t a movie; the guy doesn’t always get the girl. Anyway, I’ve gotta’ go, my 12:30 is here. Call me mid-09 after the market has calmed down a bit. You, me and Obama will play a quick nine at Congressional.
[Click. Phone cuts off]
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Eben is a highly caffeinated business development associate at a small, cash sensitive pharmaceutical company somewhere in Massachusetts. He enjoys cliche-less banter, compartmentalization, non-equilibrium thermodynamics and NPV analysis. Agree or disagree with what he's posted? He encourages comments.
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October 6, 2008 at 7:33 am
[...] I guess the Swami was right. Share and Enjoy: [...]