Elliott Advisers continues to put pressure on Switzerland's Actelion, demanding that the drug developer open up about any M&A activity it may have been engaged in over the past year and review its assessment criteria. And the U.S. hedge fund insists that creating a boardroom committee to assess strategic options isn't the same thing as planting a "for sale" sign in front of the headquarters.
"It would give the company and its shareholders the ability to choose its future. At the moment, there is no choice, only a massive, high risk leap of faith based on the unknown value of the compounds Actelion has in development," Elliott reasoned in its response to Actelion, which has been giving the hedge fund a cold shoulder. Last week Actelion--which has been at the center of persistent takeover rumors--rejected the fund's push to explore a sale of the company. But Elliott Advisers isn't taking no for an answer.
Dow Jones' Hester Plumridge looks at the math involved in a possible Actelion takeover, using UBS's estimate of a $63 share price to start from. That's a hefty premium over the stock's current 54 franc price but far less than the biotech would be worth if all three of its late-stage programs actually pan out.
One reason why no one pays a full premium based on universal success, though, is that no one company has a perfect score at drug development. Finding success with half of your late-stage drugs is considered a stellar achievement. And Actelion's recent setbacks in the clinic underscored just how chancy the drug development field can be.