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Anybody have any idea to how much upside is available from 66 million on these drugs? It seems like a great deal and the perfect example of why cash strong pharmaceuticals have an advantage.



IMO, it seems a lot of money to spend for drugs with very limited niches.
The deal appears to be buying three drugs for cash totalling a bit over 3 times current annual sales. That could be a fair price or a waste of cash depending on what happens to sales of those drugs. I do not have figures on trends over the past few years. All I can tell you from my experience practicing medicine (primary care and ER) for 20 years is that I have not used any of them in over 10 years. The two asthma drugs probably get most of their use in inner city populations where asthma is a more refractory problem. I have heard that for whatever reason Europe uses more Cromolyn products that we do in US. It is a rare asthmatic in US who I hear about using these meds--they are thought of as third line therapy.
The antibiotic sounds like it has a niche in tertiary hospitals where nasty drug resitant strep is a problem. Again, this niche seems small to me and I am frankly surprised to hear sales for these drugs combined are as high as $66 million.
King has a lot going for it, but if they keep spending their money this way, I will remain an observer.

Urche (who recently sold KG after a brief holding because I was looking for some gain to offset losses)

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