Question-and-Answer Session
Operator
(Operator instructions.) Our first question comes from Michael Tong of Wachovia; your line is open.
Michael Tong - Wachovia Capital
Hi, good morning. Just a more philosophical question if you could, Mike. I have heard a lot of companies talk about preserving cash because there are a lot of depressed assets out there for acquisitions or in-licensing opportunities. I was just wondering about your thought process regarding the new $200 million share repurchase agreement in the current environment. Would it not be better to use that for product acquisitions or in-licensing opportunities?
Michael Pearson
Thanks, Michael. Actually, we expect to do both. We do expect to continue the repurchase program of our securities because we believe that shareholders will get an excellent return on that investment, but we are also, I think we have a roughly $500 million in cash now. This business continues to generate cash and will generate significantly more cash next year once these cost reduction efforts are behind us.
So we believe we have adequate cash flow to continue to make acquisitions like we did with CORIA. So we would plan to be active both in making smaller acquisitions as well as continuing our share repurchase, so I think we feel we are in the fortunate position that we can do both and we are not limited to only one of the two strategies.
Michael Tong - Wachovia Capital
Okay, and just a quick clarification; I was not sure if I heard you correctly. When you talk about the R&D reduction that you expect for ’09, was that 15%, one-five, or 50%, five-zero?
Michael Pearson
50%, five-zero, so we would expect it to be $50 million or less.
Michael Tong - Wachovia Capital
Okay, great, thank you.
Operator
Our next question comes from Jonathan Aschoff of Brean Murray; your line is open.
Jonathan Aschoff - Brean Murray, Carret & Co.
Hi, thank you. What was your average cost in the almost $300 million that you spent for the R&D – I am sorry, for the share buyback?
Peter J. Blott
If you will just give me a chance to look that up, I have got it here somewhere. It is somewhere in the region—
Jonathan Aschoff - Brean Murray, Carret & Co.
Because when you mentioned 11 million shares, that sounds to me more like the net spare change from issuance and buyback, right, for ’08?
- To read the full transcript on Seeking Alpha, click here »
