re: Bought into a sinking ship stock

quote:

---

Any idea at all how common it is for a larger pharma WOULD buy?

---

I would say the probability is almost zero.

I'm not gonna dive too deep into the company's financials, but it seems like they have little to no revenue and a mountain of debt. Unless they own some real estate that is more valuable than the business itself and can cover the debt obligations, it's not even on large pharma's radar.


Personally, I'd sell, take the loss and get the tax write off. It's a lesson learned, but thankfully it doesn't sound like a life altering loss.

quote:

---

Any idea at all how common it is for a larger pharma WOULD buy? Is there any precedent of it not happening and it just dissolving?

---

Most pharma companies fail (run out of money before producing and commercializing an approved drug) or get bought out for a less than desirable price.

Most drugs never make it to FDA approval, and even fewer get approved. After that, commercialization (getting drug to market and in the hands of patients) is very tough. See AUPH.

The stages for this process are pre clinical trials, Phase 1,2,3, then FDA decision.

The most attractive companies to acquire have plenty of cash on hand, a novel drug therapy that has the potential to make 500 million or upwards of a billion dollars annually, and often have significant partnerships already in place.

One caveat here is that big pharma has shifted a bit to acquiring companies with very promising drugs that are still in phase one or two.
It’s all risk/reward. You don’t have to pay nearly as much for an unproven drug.

That said, these deals are still around a billion dollars.
There’s not much hype around 20 million dollar companies.

I truly think the ship has sailed for NLSP. They are worth so little and have no cash on hand. It’s unlikely that a larger company would want to take on a non revenue producing drug and a lot of debt.
That’s not a winning combo.