Investment thesis
1) Cheap, very cheap
6,5 millions = market cap.
It gives u 3 compounds company with 20% stake in Caprion (biomarker market growing at 35-40% per year).
2) Too valuable to pass on
a) strategic value - two plateform oncology product ; 4601 and 232 with application in various type of cancer type
i) 4601 - only compound able to completely shut down Ras-pathway (downstream shut down)
ii) 232 - only compound able to shut down M2PK
both are intra cellular drug candidates, potentially non toxic and more efficacious than anything the market has seen.
b) Niche market for GBM 3B, skin cancer 4B, renal cancer 2B, wow the number is going high
c) free Shigamabs, E coli market, 50 millions to 200 millions
d) Caprion exponential growth and Cellcarta pipeline compounds for the long run
3) At what price?
1$ - Below asset value ; shareholders will not accept.
2$ - About what shareholder initially invested, most will tender and be very happy with in
3$ - Equal to fair asset value... This would be a good deal at 3$.
4) Timing - market turmoil and before pivotal trial to take off guard any defensive move.
Management cannot refinance before final results.
Because people are waiting for pivotal trials and some might be chickening out, quick hostile bid could succeed.
Playing on current shareholders desperation.
Delays in trial could result in cash problem and management could be force to accept offer in desperation.
Also, bidder gets internal info from strategic review. They get to complete DD and prepare for friendly or hostile move. They also have the advantage of being first and being more prepared.
3$ - I would take the deal even if I believe SP could go much higher.
4$ 5$ - If we get a second bidder to manifest it's existence.