Merck's Recent Acquisition Highlights OWS Funding Flowing In
Jan 5, 2021 15:22:02 GMT
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Post by c2crusher on Jan 5, 2021 15:22:02 GMT
Merck's Recent Acquisition Highlights OWS Funding Flowing Into COVID-19 Therapeutics
seekingalpha.com/article/4397128-mercks-recent-acquisition-highlights-ows-funding-flowing-covidminus-19-therapeutics
The Business Model
Whether Merck meant to do it or not, they stumbled onto a great business model that will expand their pipeline and virtually pay for itself if they target companies that are likely to get OWS funding. Investors need to recognize that Merck paid $425 million for OncoImmune’s business and then a month later received almost $350 million from OWS. A similar situation happened in the vaccine space where Pfizer (PFE) partnered with BioNTech (BNTX), where BioNTech received $445 million in funding from Germany, and then Operation Warp Speed agreed to almost $2 billion in product purchases if the vaccine was approved.
Basically, Merck acquired a soon-to-be-approved drug and perhaps a platform technology for a net of $75 million. In an environment where it costs billions to get a drug through the approval process, they got a “steal'' and might try it again but this time in a much bigger deal. Based on the mechanism of action and clinical trial results, the top COVID-19 immunomodulatory therapeutics might come from the pool of GvHD drugs.
seekingalpha.com/article/4397128-mercks-recent-acquisition-highlights-ows-funding-flowing-covidminus-19-therapeutics
The Business Model
Whether Merck meant to do it or not, they stumbled onto a great business model that will expand their pipeline and virtually pay for itself if they target companies that are likely to get OWS funding. Investors need to recognize that Merck paid $425 million for OncoImmune’s business and then a month later received almost $350 million from OWS. A similar situation happened in the vaccine space where Pfizer (PFE) partnered with BioNTech (BNTX), where BioNTech received $445 million in funding from Germany, and then Operation Warp Speed agreed to almost $2 billion in product purchases if the vaccine was approved.
Basically, Merck acquired a soon-to-be-approved drug and perhaps a platform technology for a net of $75 million. In an environment where it costs billions to get a drug through the approval process, they got a “steal'' and might try it again but this time in a much bigger deal. Based on the mechanism of action and clinical trial results, the top COVID-19 immunomodulatory therapeutics might come from the pool of GvHD drugs.
