Thursday, September 9, 2010

My Carrie Cox-Humacyte Narrative Draws New Ink Erh, Pixels -- In

An industry paper called MassDevice ("New England's one stop source for medical device news and information", they say) has essentially "doubled down", on my most recent Carrie Cox meme, here -- do go read it all -- but a snippet follows:

. . . .Cox left Schering-Plough with a golden parachute estimated at between $36 million and $44 million when her company was acquired by Merck & Co. in November 2009, according to a pharmaceutical industry blog [that's us -- SEE UPDATE, below]. That doesn't include about $11 million in net gains from exercising Schering-Plough stock options in April and May of 2007 — before the release of disappointing study results on the company's Vytorin cholesterol-lowering drug.

Those stock option sales are part of an ongoing class-action shareholder lawsuit that alleges securities misdeeds by Schering-Plough executives. Some posts at a CafePharma message board on the topic were submitted as evidence in the case. In June, a federal district court judge upheld an August 2009 decision to deny defendants' request to dismiss the case. . . .

Very cool. It even links to one of our blog-posts, in the seventh paragraph -- as the definitive estimate of the "all-in" value of Ms. Cox's golden kiss-off. Excellent!

Finally, with the air of mystery in the portion of its narrative about how tight-lipped Humacyte's founder was, on the question of the identity of the latest round investor (a solo-investor -- hmmm!), the piece can also be read to imply that Ms. Cox may have been that sole investor -- in Humacyte's just completed $12 million private debt offering. I did exactly the same, but more directly, in the comment box to my piece, yesterday. Again, outstanding -- we will let you know if anything definitive turns up, to confirm the investor's identity!

UPDATED @ 9:50 PM EDT: Throughout the above-quoted article, the authors assumed that Ms. Cox's "golden kiss-off" would top out at $44 million. That turns out to be too low, given Merck's recent NYSE trading history. Had old Schering-Plough never risen above $28, pre-close, $44 million would likely have been the top for Ms. Cox.

Actually though -- with New Merck sitting a little above $36 on the NYSE tonight, we need to add another $14.4 million to the value of her haul. When Merck crossed $31.57, another bolus of 400,000 stock options went "in the money" -- i.e., became advantageous to exercise. If memory serves, she has a full year -- from closing to pull the trigger on most of these stock options. And thus, for every dollar increase in the NYSE per share price of New Merck over $31.57, Ms. Cox gains $1.99 million. So, should Merck rise from here -- above $36 -- add $2 million to her haul for every dollar of increase beyond $36.

So as I say, and just to be clear -- and complete -- at a little over $36 on the NYSE close tonight, Ms. Cox's all-in kiss-off package is worth at least $58.4 million (including her tax gross-up payments).


Anonymous said...

time to update that graphic to include the higher stock prices and her new haul projections. don't skimp on the comic relief.

Condor said...

You are, of course, right.

I have several other tasks today -- non-blog related -- but will get to it shortly (perhaps Sunday, over coffee).