This approach is used by many on Wall Street to create efficient portfolios and is one of the many approaches that can be used to create customized portfolios for clients. We use Modern Portfolio Theory models to create customized portfolios that are appropriate for the risk and return objectives of the client. YourCapital Portfolio Construction Approach: If one thing is for sure it is that this will not be Novelion’s last equity raise.PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS AND INVESTORS CAN LOSE MONEY WITH ALL INVESTMENTS. Yesterday’s takeover gives Aegerion shareholders QLT stock worth around $45m, and will also see a syndicate pump $22m into the combined business. The collapse of Aralez equity within weeks of QLT buying a $45m stake in this new entity, the result of merging Pozen and Tribute Pharmaceuticals, just added insult to injury. If Aegerion’s problems centred on Juxtapid and capital structure, QLT’s had to do with repeated failed attempts to buy other businesses or get bought itself ( Salix and Auxilium reveal an anti-chain in overdrive, September 23, 2014). QLT to buy Aegerion in $45m all-stock deal Guilty plea to illegal marketing charges, Aegerion to pay DoJ $40m New CEO Mary Szela cuts 25% of Aegerion's workforceĪralez 40% stock decline leads to QLT writeoff Pozen and Tribute merge to form Aralez, backed by $45m QLT investment QLT sues Valeant alleging non-payment of $5m milestone InSite deal terminated when Sun Pharma outbids QLTīreach of covenants puts Aegerion's $25m Silicon Valley loan in default
Juxtapid sales disappoint after first year on the marketĪuxilium deal terminated when Endo buys Auxiliumĭebt-financed purchase of AstraZeneca's Myalept for $325m
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US FDA warning letter accuses CEO Marc Beer of making exaggerated claims for Juxtapid on a TV programme And just how desperate Aegerion’s finances had become is illustrated by the fact that QLT is lending it up to $15m until the takeover closes. Juxtapid once carried consensus 2020 sales expectations of $907m, but these now stand at just $172m, EvaluatePharma’s archived forecasts indicate.
Aegerion’s reputation was in tatters after revelations about its former chief exec, Marc Beer, and the flop of its homozygous familial hypercholesterolaemia drug Juxtapid. The combined group is to be run by Aegerion’s recently appointed chief executive, Mary Szela, who called Novelion an “opportunity for a fresh start”.
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Novelion will also benefit from a reduced corporate tax rate thanks to its Canada domicile, though management stressed that this was not a key driver of the deal, and anyway profitability is not something Novelion needs to worry about just yet. Were it not for its share price collapse it might seem as though Aegerion is getting the better end of the deal.
However, investors should be wary of the liabilities that QLT is taking on: $40m needs to come out to pay a US fine for illegal marketing of Juxtapid, a remarkable $325m convertible debt, taken out to buy Myalept from AstraZeneca, remains on the books, and a separate $25m loan with Silicon Valley Bank is in default, with renegotiation talks continuing. The rationale is that QLT’s cash balance and lead pipeline asset, Zuretinol (QLT091001) for the orphan condition inherited retinal disease, would have a bright future in a combined group that also comprises Aegerion’s ailing marketed drugs Juxtapid and Myalept. Leerink analysts reckon that Novelion will be stronger than the sum of its parts, which looks like damning the company by faint praise. It is hard to see how the combination into a single group, to be called Novelion, will solve either company’s problems. The Canadian group might have done better simply to throw in the towel and give $100m of cash back to shareholders, but since 80% of its value has been wiped out over three years investors probably think that they have little to lose at this point.ĭuring those three years both QLT and Aegerion – down 98% – have lurched from one disaster to another. True, QLT has had plenty of problems of its own, but buying Aegerion takes it out of the frying pan and into the fire. It is not clear which is the bigger surprise: that QLT has agreed to take on the poisoned chalice of Aegerion, or that both companies’ share prices surged when the all-stock move was announced yesterday.
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