Denner's Game

For the sake of argument,  let's consider this is Denner's game.

1. Denner understands that Ariad's products and pipeline are significantly undervalued by the Market.

2. Denner concludes that Big Pharma understands Ariad's  true value and would be willing to pay much more than post crash valuation.

3. Denner buys lots of shares, with the hope of flipping them to BigPharma in 24 months (his term on board)

4. Denner signs on to Ariad board knowing HB will be impediment no 1, but has to help turn around the ship and work with Harvey for a while to make the company credible. Thus he cuts deals and partnerships and probably helped with 113 application for Breakthrough Therapy Designation (BTD) - which is granted.

5. While turning around the ship, Denner courts big pharma partners,  and assures that other institutional investors are aligned with his game plan. Tute's holdings increase to 71%.

6. While all this is going on, Denner has been in discussions with Harv about buy out, but gets no traction.  Harvey refuses both the buy out, and the possibility of stepping down.

And now it gets interesting....

7. Knowing that further discussions with Harv are futile,  he now openly declares war.  This declaration is the CNBC "leak" (as we say in Washington).

8. Having publicly declared war with Harv, there is no going back. We are now officially in the end game. Clock is ticking.

9. Note: he could only move to end game position if agreements with BigPharma and other tutes are in place.

10. Why publicly declare war?? Simple.

A. Telegraph tutes to hold positions (note low volume recently, in spite of drama).

B. Position his conclusion as only logical one for Ariad and investors (can't continue with disgraced CEO).

C. Ramp up the pressure,  because that is precisely what activist investors do to achieve their objectives.

11. When Harv is forced out in, say, 30 to 90 days,  sell the company to Big Pharma, per prior negotiations,  and move the hell on...with a much stronger brand for Sarissa, and another notch in Denner's belt.

Game Over.

GLTA

TC

EARTHQUAKE TODAY???

The tectonic plates have moved, the earth has trembled, and the inevitable is underway...and soon the markets will open!

Denner has publicly declared war on Harvey. On CNBC, no less.  If he doesn't move Harv out through "an agreement with the company,” he’s waging  a proxy war.  Which he will win. 

Harvey is shaken.  Visibly so.  During his last interview, he forgot the name of 113 (the journalist reminded him it was Brigatinib), and he became incoherent when queried about his relationship with Denner.  END GAME.

So what now?

Sale.  Possibly a fire sale. Denner has 27% of Sarissa’s holdings in Ariad, nothing to show, and its been over a year.  $100m plus on the line. Bad. Bad. And Bad again.  After investing so big, tying up so much capital – dead money – for so long, it’s time to move on.   And that means selling Ariad to the highest bidder. Pronto!

Low end, $15pps.   

Disgraceful, below the pre-flash crash price, and the old school Ariad crew will be outraged (and out of pocket).  Denner, however, can declare a 100% plus profit, move on to the next battle, and be done with all this yucky drama with Berger and his aspirations to be President For Life. That’s the worst case, and it happens in 60 days.

High end, $35 pps.  

This happens if the God Molecule woos big pharma,  Brigatinib is on the verge of FDA approval, and there’s good news on Pona dosing trials on the way.  60 days, 90 max, and it's over. OVER!

Either way, shorts are toast and the (new) longs’ patience will soon be rewarded.

Good luck to all.

TC