Good Deal? Bad Deal? Biosante's Acquisition of Cell Genesys. |
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By Andrew Greenbull |
Wednesday, 12 August 2009 03:00 |
So was it a really bad deal? Let’s start with Cell Genesys first. According to the Merger Agreement, CEGE shareholders will get 0.1615/per share of BPAX. Apparently, the market saw the terms and reacted immediately, but as we know, the market is also shortsighted. Looking at the deal a little deeper, I think this buyout could be a key development for BPAX’s future success and here's why: 1- CEGE will bring $20M to $25M cash to BPAX, it could be life-saving fund for the company whose current cash reserves only go as far as March of 2010. 2- The good relationship between CEGE and Takeda may open the door for BAPX to one of the most important markets in Asia—Japan. 3- If Biosante decides to continue development of CEGE’s immunotherapy for prostate cancer, it could enrich BPAX’s product pipelines and provide important technical support. I like that BioSante is a specialty pharmaceutical company focused on developing products for female sexual health, menopause, contraception and male hypogonadism. Product Pipeline Elestrin™ for the treatment of moderate-to-severe hot flashes associated with menopause is at the marketing stage, BPAX has an agreement with Azur Pharma to sell Elestrin™ in the United States. Under the terms of the agreement, Azur paid BioSante US$3.3 million comprised of a product licensing fee and payment for the transfer of the trademark and inventories, amongst other items. In addition, Azur Pharma will pay BioSante royalties and contingent milestones with a maximum of $144.5 M based on future net sales of Elestrin. Whats really intriguing is the stage 3 clinical trial of LibiGel® which will finish final data collection in March 2010 as seen in the BioMedReports FDA calendar. A successful trial will be an important milestone in BPAX’S history BPAX will release thier second quarter earnings report after the market close on 08/07/2009 and besides some updated news of clinical trial data, I am expecting that the company will provide a much clearer and satisfiable explanation for its buyout of Cell Genesys. Given more time, I believe that BPAX may be able to find the type of success that the father of Viagra, Pfizer, has had with that drug. My 3 month target price per share for BPAX is $3, and my one year target is $5, but in the service of full disclosure, I am not a licenced analyst. Disclosure: Long BPAX "Featured Content" profiles are meant to provide awareness of these companies to investors in the small-cap and growth equity community and should not in any way come across as a recommendation to buy, sell or hold these securities. BiomedReports is not paid or compensated by newswires to disseminate or report news and developments about publicly traded companies, but may from time to time receive compensation for advertising, data, analytics and investor relation services from various entities and firms. Full disclosures should be read in the 'About Us Section'. Add this page to your favorite Social Bookmarking websites ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() |