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CANROYS....
The strong Canadian dollar (Loonie) against the weak US dollar helps US holders since the dividend is paid in Canadian dollars(i.e., higher dividend yield).
IMO, as long as the dollar stays relatively weak and oil stays around or above $65 you cannot go wrong holding some CANROY's for another 18-24 months.
10nis
CANROYS.... This may get all of them moving higher.
http://biz.yahoo.com/iw/070924/0305997.html/
Press Release Source: PRIMEWEST ENERGY TRUST
PrimeWest Energy Trust Agrees to C$5.0 Billion Sale to TAQA Subsidiary
Monday September 24, 10:12 am ET
CALGARY, ALBERTA--(MARKET WIRE)--Sep 24, 2007 -- PrimeWest Energy Trust (Toronto:PWI-UN.TO - News) (Toronto:PWX.TO - News) (Toronto:PWI-DBA.TO - News) (Toronto:PWI-DBB.TO - News) (Toronto:PWI-DBC.TO - News) (NYSE:PWI - News) ("PrimeWest" or the "Trust") is pleased to announce that it has entered into an agreement (the "Arrangement Agreement") with 1350849 Alberta Ltd. ("Purchaser") and TAQA North Ltd. ("TAQA North"), both of which are wholly-owned subsidiaries of Abu Dhabi National Energy Company PJSC ("TAQA"). The Arrangement Agreement provides for the acquisition by Purchaser of all of the issued and outstanding trust units of PrimeWest (the "Units") and all of the issued and outstanding exchangeable shares (the "Exchangeable Shares") of PrimeWest Energy Inc. for a cash consideration of C$26.75 per Unit, all pursuant to a plan of arrangement under the Business Corporations Act (Alberta) (the "Arrangement"). The cash consideration payable for the Exchangeable Shares will be calculated on the basis of the exchange ratio in effect at the time the transaction is completed.
Using a Canadian to U.S. dollar exchange rate of 1.00, this cash consideration equates to US$26.75 per Unit. The actual U.S. dollar equivalent cash price per Unit will be based upon the Canadian to U.S. dollar exchange rate on the effective date of the Arrangement.
The aggregate value of the Arrangement, including the debt carried by PrimeWest and its subsidiaries, is approximately C$5.0 billion on a fully diluted basis. The consideration per Unit pursuant to the Arrangement Agreement represents a 26.5% premium over the 30 day weighted average trading price of the Units on the Toronto Stock Exchange up to and including September 21, 2007.
"We are pleased to announce that Purchaser and TAQA North have entered into an agreement for Purchaser to acquire the PrimeWest Units and Exchangeable Shares at a price that delivers substantial value to our investors. PrimeWest has built a high quality asset base with a large portfolio of development opportunities. This investment by Purchaser will result in ongoing development and growth of the asset base," stated Don Garner, President and CEO of PrimeWest.
The Arrangement Agreement also permits PrimeWest to maintain its current monthly distribution at an amount not greater than C$0.25 per Unit payable in each of the months of October and November 2007. Therefore, if the effective date of the Arrangement occurs in November, the final distribution to Unitholders will be paid on November 15, 2007. However, if the Unitholder meeting is held on or before November 30, 2007 and the effective date of the Arrangement is delayed beyond the third business day of the following month, the Arrangement Agreement permits PrimeWest to continue to pay monthly distributions. If PrimeWest is permitted to pay distributions after November, the distribution amount will be set at the discretion of the Board of Directors of PrimeWest but will not exceed $0.25 per Unit per month.
Complete details of the terms of the Arrangement are set out in the Arrangement Agreement which will be filed by PrimeWest on SEDAR and EDGAR and will be available for viewing under PrimeWest's profile on www.sedar.com and on www.sec.gov/edgar.shtml.
PrimeWest is suspending the operation of its premium distribution, distribution reinvestment and optional trust purchase plan with respect to any distribution on the Units occurring after October 15, 2007.
The Arrangement is subject to court and regulatory approval and other conditions that are typical of transactions of this nature, including the approval by the holders of at least 66 2/3% of the Units, Exchangeable Shares and unit appreciation rights, voting together as a single class, represented in person or by proxy at the Unitholder meeting.
An information circular regarding the Arrangement is expected to be mailed to securityholders in late October 2007 for a meeting expected to take place in late November, with completion of the Arrangement anticipated shortly thereafter.
In accordance with the terms of the indenture governing PrimeWest's convertible debentures, Purchaser will make an offer to purchase all outstanding debentures for a cash consideration equal to 101% of the face value thereof, plus accrued and unpaid interest, within 30 days following the effective date of the Arrangement.
Recommendation of the Board of Directors
The Board of Directors of PrimeWest Energy Inc. has unanimously approved the Arrangement and based, in part, on the fairness opinion from PrimeWest's financial advisor discussed below, determined that the Arrangement is in the best interests of PrimeWest and the holders of its Units and Exchangeable Shares and is fair from a financial point of view to such holders. Therefore, the Board has resolved to recommend that such holders vote their respective securities in favour of the Arrangement. Each member of the Board of Directors of PrimeWest Energy Inc. has indicated his intention to vote his Units and Exchangeable Shares in favour of the Arrangement.
Under the Arrangement Agreement, PrimeWest has agreed that it will not solicit, initiate, or encourage any discussions concerning the sale of material assets or any other business combination and that it will provide Purchaser with an opportunity to match competing, unsolicited proposals for a period of 48 hours. The Arrangement Agreement also provides that PrimeWest shall pay a non-completion fee of C$75 million to Purchaser if the Arrangement is not completed in certain circumstances.
Financial and Legal Advisors
CIBC World Markets Inc. is acting as sole financial advisor to PrimeWest with respect to the Arrangement and has provided the Board of Directors of PrimeWest Energy Inc. with an opinion regarding the proposed transaction. Subject to review of final documentation, this opinion indicates that the consideration to be received by the holders of Units and Exchangeable Shares of PrimeWest under the Arrangement is fair, from a financial point of view, to all of such securityholders. PrimeWest's Canadian legal advisors are Stikeman Elliott LLP and its US legal advisors are Paul, Weiss, Rifkind, Wharton & Garrison LLP.
TD Securities Inc. is acting as exclusive financial advisor to TAQA and TAQA North in the transaction. Purchaser's, TAQA North's and TAQA's legal advisors are Heenan Blaikie LLP and Latham & Watkins LLP.
About PrimeWest
PrimeWest is a Calgary-based conventional oil and gas royalty trust that actively acquires, develops, produces and sells natural gas, crude oil and natural gas liquids for the generation of monthly cash distributions to Unitholders. Trust Units of PrimeWest trade on the Toronto Stock Exchange (TSX) under the symbol "PWI.UN" and on the New York Stock Exchange under the symbol "PWI". Exchangeable Shares of PrimeWest Energy Inc. trade on the TSX under the symbol "PWX". Series I Convertible Debentures of PrimeWest trade on the TSX under the symbol "PWI.DB.A", Series II Convertible Debentures trade on the TSX under the symbol "PWI.DB.B" and Series III Convertible Debentures trade on the TSX under the symbol "PWI.DB.C".
To learn more about PrimeWest, please visit our website at www.primewestenergy.com.
About TAQA North and TAQA
TAQA North (formerly Northrock Resources Limited) is a wholly-owned subsidiary of Abu Dhabi National Energy Company PJSC ("TAQA"), a publicly listed company on the Abu Dhabi Securities Market (ADSM: TAQA). TAQA North is a Calgary-based oil and gas exploration company with operations in Northern Alberta and British Columbia; West Central and Southern Alberta; Southwest Saskatchewan; Southeast Saskatchewan; and the Northwest Territories. TAQA North was acquired by TAQA in August 2007 from Pogo Producing Company for a total purchase price of US$2 billion. TAQA is a major global energy company with strategic and financing investment opportunities in oil & gas, power, water and infrastructure across the Middle East, India, Europe and North Africa. TAQA focuses on upstream (oil & gas exploration & production), midstream (pipeline, gas storage and LNG) and downstream (power generation). The rating agencies Moody Investor Services and Standard & Poor's have assigned long-term senior unsecured debt ratings of Aa2 and AA- respectively to TAQA.
To learn more about TAQA, please visit their website at www.taqa.ae.
All information in this press release relating to TAQA and its subsidiaries was provided by TAQA or has been derived from publicly available sources.
Additional Information
PrimeWest will file on SEDAR and EDGAR the information circular, to be distributed to the PrimeWest securityholders in connection with their consideration of and vote on the proposed transaction, along with all other relevant documents concerning the proposed transaction. PrimeWest securityholders are urged to read the information circular and the other relevant documents filed on SEDAR and EDGAR when they become available, as well as any amendments or supplements to those documents, as they will contain important information.
Joint Conference Call
A joint conference call to discuss the Arrangement will be held on Monday, September 24th, 2007 at 12:00 Noon Mountain Daylight Time (2:00 PM Eastern). To participate in the conference, please call 1-800-633-8938. A recording of the call will be available from 2:30 PM Eastern on September 24th, 2007 until October 24th, 2007 by calling 1-800-558-5253 (in the Toronto area (416) 626-4100) and entering reservation number 21350676, followed by the number sign.
>>However, just because you plan to hold an asset until maturity doesn't mean you won't lose your shirt (all or part of it) along the way.
Yep - and as Jon points out one sure way to misprice the instruments is to generate panic selling and marking to a distorted market is bound to do that. Selling begetting selling etc.>>>
I disagree that their is panic selling. At least I don't see it...can you tell me where it is? If the real economic value of an asset falls with very little to no chance of the asset ever rising back to the same value that asset needs to be written down and the leverage partners will come a knocking as a result. If there was real panic selling I would guarantee you Mr. Buffett and his friends would be putting their significant warchests to work. I just see selling as a result of margins calls were are based on real economic declines in asset prices. Actually pricing in risk can be a real b!tch...
10nis
>>Shouldn't assets be valued at what they are worth
Yes - exactly.
But what means get you to that point?
In truth, you need to consider the holding time frame. Marking to market for traders with a short time frame makes sense. If you are an insurer and you are matching assets life to liabilities in a program then movements during the period in the value of the assets are meaningless.
There are lots of investors in these instruments that fall between these two extremes. But they tend to be longer term holders so marking to model makes more sense. Note that this issue is really a function of the current crisis. Changing to mark to market during fear induced crisis is NUTS.>>>>>
If these instruments were not levered then I could sort of see why someone could agree not marking to market assets held until maturity. However, just because you plan to hold an asset until maturity doesn't mean you won't lose your shirt (all or part of it) along the way. Plus, most of these assets are/were levered 5 or 8 or 10 to 1 and if you don't mark to market these institutions would try to lever themselves up to 1000 to 1. You have to support the providers of the leverage sometime. JMHO.
10nis
>>Part of this whole crisis by the way has been precipitated by certain assets which are not meant to be marked to market being marked to market at a time of panic. System may be safer in some ways as a result but I am still not sure personally.
Marking to market securities that have a thin market when the market is being driven by fear is NUTS. Marking to model makes far more sense despite what the stupid talking heads are saying.
What is the point of marking these type of securities to market? Market goes down - you take a hit. The market goes back up you take a gain. All of which suggests instability and warrants a higher discount rate for the asset class and the companies that hold them. It is nuts.>>>
Why does the value of securities have to go back up? I see no reason why marketing securities to market is nuts. Shouldn't assets be valued at what they are worth and I agree in thin markets the market price may not be the correct price. However, in this case the market price is probably much lower.
The market is being driven by fear or reality? The credit crunch was going to hit one day and when you have a global real estate asset bubble, banks providing credit to any PE firm with no covenants, etc., etc.. bad things were going to happen... You have to love these comments by the CFO of Etrade.
"What we're seeing in the marketplaces in respect to loans and securities is that this situation will continue aggressively through the later half of this year and all of next year," he told analysts during a conference call. "By the time you get to 2009, you will see things better on the macro-economic side -- and by then we have dramatically transformed our balance sheet."
"It is not a subprime thing, the very small portion of subprime loans we have is performing well within expectations," R. Jarrett Lilien, E-Trade's president and chief operating officer, said in an interview with The Associated Press. "Really what is going on right now is your second mortgages, home equity lines of credit, and installment loans. That's really the issue where the market is deteriorating."
<<< If the Fed drops interest rates it is a result of the employment numbers, weakening economic data coupled with tame inflation. The long overdue housing correction adjusting price growth to income and other assets is similarly exerting a negative wealth effect on spending. I disagree that a Fed rate drop will bail out the over zealous lenders and overextended buyers. Both of these groups will be part of the corrective process. It will ease some of the pressure on the commercial paper market financing inflated buyouts which in my opinion is most regrettable but all in all a rate reduction is prudent macroeconomic policy. >>>
My thoughts....
The Fed won't be dropping rates because of one negative month of payroll numbers or one month of weakening economic data. The unemployment rate is what 4.4%? Inflation is definitely not tame where I life but maybe you don't have a car or eat (with wheat and milk at all time high's). Also, export prices are rising as costs in China are rising and the dollar weak. None of the economic numbers announced would have pushed any previous Fed to cut rates. The Fed will cut rates (only 25 bps, IMO) because the Government wants it. It won't help the housing market materially as its a supply/demand issue - how many homes can one person really own? The supply of homes will reach at least a 12 month supply (up from 9.6 months today) before reversing its trend. The cost of a mortgage has gone up regardless of what the Fed does and that will keep housing demand down until housing prices correct another 15-20%.
With respect to leveraged buyouts, the entire market has changed and I don't see how lower rates are going to convince banks to open up their wallets and hand out more cheap debt. Banks are once again putting covenants in financing agreements and I think they've learned their lessons to not finance the pipe dreams of PE firms. My largest private equity clients are currently having trouble closing financing on $100 million deals. This will change however, financing of $10+ billion deals will be a thing of the past.
It should an interesting week....
10nis
Report: Greenspan Says Turmoil Like '98
Friday September 7, 12:03 am ET
Report: Former Federal Reserve Chairman Alan Greenspan Says Market Turmoil Like 1998, 1987
http://biz.yahoo.com/ap/070907/greenspan_remarks.html?.v=2
NEW YORK (AP) -- "The human race has never found a way to confront bubbles," former Federal Reserve Chairman Alan Greenspan said Thursday in reference to the euphoria that can precede contractions, or reactions, like the current market turmoil, according to a published report.
Greenspan, speaking to economists in Washington, D.C., compared the turmoil to that of 1987 and in 1998, when the giant hedge fund Long-Term Capital Management nearly collapsed, The Wall Street Journal reported on its Web site.
"The behavior in what we are observing in the last seven weeks is identical in many respects to what we saw in 1998, what we saw in the stock-market crash of 1987, I suspect what we saw in the land-boom collapse of 1837 and certainly the bank panic of 3/8 1907," Greenspan said at the event organized by the Brookings Papers on Economic Activity, according to the Journal.
Greenspan, now a private consultant, said euphoria takes over when the economy is expanding and leads to bubbles, "and these bubbles cannot be defused until the fever breaks," the Journal said.
Bubbles can't be defused through incremental adjustments in interest rates, he suggested, the paper reported. The Fed doubled interest rates in 1994-95, and "stopped the nascent stock-market boom," but when stopped, stocks took off again. "We tried to do it again in 1997," when the Fed raised rates a quarter of a percentage point, and "the same phenomenon occurred."
Dew,
Any reason why you are adding to your position currently versus a few weeks ago or are you putting some new found wealth to work? Just curious.
TIA,
10nis
W bailing out the lenders with our tax dollars.... I say let the lenders go bankrupt, let people lose their homes.... Why should the rest of us pay for dumb and dumber? It'll be interesting to see how much of the damage the bail out can prevent.
US Partnership....
Dew/Board,
What Companies do you think Cox is talking to with respect to a potential partnership in the US for Atryn? Assuming Atryn gets approval in the US wouldn't it make the most economic sense for a potential partner to just purchase all of GTCB ($2-4/pps) vs. some type of upfront money ($20-50 million) and profit sharing? I'm a little surprised with the share price lagging that no one has thrown out a $2-4 takeover offer.
TIA,
10nis
Where do you think IDIX is going to open? Significantly lower? Today's news, although a shock, seemed to already be priced in.
TIA,
10nis
DJ newswire (6:45am) Valopicitabine Development Program placed on Clinical hold in the US...
PHARM.AS... Pharming is up ~10% on the below news.
Press Release Source: Pharming Group N.V.
PHARMING FACILITIES OBTAIN GMP STATUS
Friday July 13, 2:12 am ET
http://biz.yahoo.com/iw/070713/0277736.html
LEIDEN, NETHERLANDS--(MARKET WIRE)--Jul 13, 2007 --
Important progress in European approval process of Rhucin®
Leiden, The Netherlands, July 13, 2007. Biotech company Pharming Group NV ("Pharming" or "the Company") (Euronext: PHARM) announced today that its facilities for the manufacturing of Rhucin® have successfully passed all inspections conducted by the European Medicines Evaluation Agency ("EMEA") establishing that they comply to the standards of Good Manufacturing Practice ("GMP") for pharmaceutical production.
The EMEA has confirmed that all facilities and processes that are involved in the manufacturing of Rhucin®, Pharming's lead product, operate according to GMP standards. These facilities include Pharming's facilities for transgenic rabbits, the external facilities where milk and product are stored and processed and the Company's headquarters in Leiden as far as it is concerned with quality aspects of Rhucin®.
Dr. Bruno Giannetti, Chief Operations Officer at Pharming, commented: "Obtaining the GMP status for our facilities and processes is a major achievement for our Company. It is a critical step in the review and approval process of Rhucin® and it is difficult to overestimate the importance of achieving this milestone. It is testimony to the hard and excellent work that our team has put in to convert a research idea of 'turning milk into medicine' into a well developed and GMP-approved manufacturing process. Our transgenic rabbit facility is the first of its kind in the world to obtain this status."
Pharming has filed a marketing authorization application for Rhucin® in Europe and has recently submitted answers to the list of questions from the EMEA. Based on the timelines associated with the review of this product, Pharming expects an opinion of the scientific committee of the EMEA in the second half of 2007. In the USA, Pharming aims to finalize its placebo-controlled randomized clinical trial in the second half of 2007. The Company will present results from the clinical trials of Rhucin® for the treatment of HAE in the third quarter of 2007.
About Rhucin®
Rhucin® (recombinant human C1 esterase inhibitor) is a human protein developed through Pharming's proprietary technology in milk of transgenic rabbits. Rhucin® is currently under development to treat acute attacks of Hereditary Angioedema (HAE), a disease characterized by painful swelling of soft tissue. The disease is caused by a shortage of functional C1 esterase inhibitor in patients and results in an overreaction of the immune system.
About Pharming Group NV
Pharming Group NV is developing innovative products for the treatment of genetic disorders, specialty products for surgical indications, intermediates for various applications and food products. Pharming has two products in late stage development - recombinant human C1 inhibitor for hereditary angioedema (MAA submitted to EMEA) and human lactoferrin for use in functional foods (GRAS notification filed with FDA). The advanced technologies of the Company include innovative platforms for the production of protein therapeutics, technology and processes for the purification and formulation of these products, as well as technologies in the field of tissue repair (via its collaboration with Novathera) and DNA-repair (via its acquisition of DNage BV). Additional information is available on the Pharming website, http://www.pharming.com and on http://www.dnage.nl
<<< If the chance for a similar deal would exist, the market would anticipate and we would be seeing a much higher share price. At least that would be the rationale in a normal market. In my opinion GTCB's share price performance is very abnormal >>>>
Just like the market anticipated the ALNY deal? Its very hard for the market to price in any major deal without a leak. With that said, I look forward to a day when we see GTCB up 100+% when they sign a lucrative deal.
10nis
I'll bet there will not be a delay in the launch. GTC may pullback after the launch but I don't see any good reason today for the pull-back. With respect to the DIC phase 2 enrollment did GTC say they would issue a PR announcing full enrollment? I don't know why they would necessary issue a PR for that. Let me know your thoughts.
TIA,
10nis
Press Release Source: Lexicon Pharmaceuticals, Inc.
http://biz.yahoo.com/prnews/070617/lasu002.html?.v=5
Lexicon Pharmaceuticals Announces Two Agreements to Finance Long-Term Drug Development Strategy
Sunday June 17, 6:41 pm ET
INVUS TO INVEST $205 MILLION IN COMMON STOCK AT SIGNIFICANT PREMIUM
SYMPHONY TO FUND ADDITIONAL $60 MILLION TO ADVANCE FIRST THREE DRUGS
THE WOODLANDS, Texas, June 17 /PRNewswire-FirstCall/ -- Lexicon Pharmaceuticals, Inc. (Nasdaq: LXRX - News) has entered into a major financing agreement with The Invus Group, LLC ("Invus") to help fund its strategic goal of transitioning into an integrated biopharmaceutical company. Under the agreement, Invus will invest $205M in 2007 with the potential for up to an additional $345M over the next four years.
Simultaneously, Lexicon announced it has entered into a $60 million product development collaboration with Symphony Capital Partners, L.P. and its co-investors ("Symphony") to move its first three drug candidates into advanced clinical development:
-- LX6171 for cognitive disorders -- currently completing Phase 1b
-- LX1031 for irritable bowel syndrome -- currently in Phase 1b, and
-- LX1032 for gastrointestinal disorders -- currently in preclinical
development
"We have developed a long-term financial framework upon which we are building an integrated biopharmaceutical company. With Invus and Symphony, Lexicon will have substantially greater resources and flexibility to aid in fulfilling our mission to discover and develop breakthrough treatments for human disease," said Arthur T. Sands, M.D., Ph.D., founder, president and chief executive officer of Lexicon. "We have accomplished groundbreaking target discovery work, resulting in a portfolio of more than 100 promising new targets, and have built an exciting pipeline of both antibody and small molecule drug candidates."
"We have chosen to partner with Lexicon's talented scientists and management team because we believe that, with our commitment as a long-term shareholder with significant capital, Lexicon has the potential to become a major biopharmaceutical company," said Raymond Debbane, founder and president of The Invus Group, LLC.
Summary of the Invus Transaction
Under the agreement, which the Lexicon board of directors has approved, Invus has received warrants to purchase 16.4 million shares of Lexicon common stock, for a per share purchase price of $3.09, the ten-day volume weighted average as of June 14, 2007. Upon shareholder approval, Invus will purchase, at that price, the number of shares that remain subject to the warrants, and the warrants will terminate. Invus also will purchase approximately 20.4 million additional shares of common stock which, when added to the shares already owned by Invus, will bring Invus' ownership to 40% of the post-transaction outstanding shares of common stock. The purchase price for these additional 20.4 million shares will be $4.50, a 46% premium over the Friday, June 15th, 2007 closing price of $3.08.
To assure long-term adequate financing, Invus will have the right to require the company to initiate up to two rights offerings, which would provide all shareholders with pro rata rights to acquire additional common stock in an aggregate amount not to exceed $345 million. The first rights offerings may be initiated, subject to certain adjustments, beginning 27 months from the closing of the initial investment, and the second rights offering may be initiated beginning 12 months after the initiation of the first, or 39 months from the closing of the initial investment if the first rights offering does not take place. The initial investment and subsequent rights offerings are designed to achieve up to approximately $550 million in proceeds to Lexicon. Invus would participate in the rights offering for up to its pro rata portion of the offering, and would commit to purchase the entire portion of the offering not subscribed for by other stockholders.
As part of its agreement with Invus, Lexicon will have the right to issue common stock before the commencement of the rights offerings at a price above $4.50 per share. Such offerings will reduce the total amount required to be raised under the rights offerings. Invus will have the right to participate in future equity issuances by the company so as to maintain its percentage ownership of the company. Invus will also agree to customary standstill restrictions that will not apply to the rights offerings and will have other exceptions. Invus will have initially three members on the Lexicon board of directors, which will be expanded from eight to eleven members.
The transaction will be submitted to Lexicon stockholders for approval at a meeting planned for August or September.
"We are implementing a long-term financial strategy that will fuel our extensive drug discovery and development pipeline," said Julia P. Gregory, executive vice president and chief financial officer. "Taken together, the Invus and Symphony agreements substantially reduce financing risk and enhance our drug development expertise, while allowing all shareholders to continue to participate in Lexicon's growth. This strong financial backing will complement Lexicon's corporate partnering strategy to accelerate the development and commercialization of our products."
Summary of the Symphony Transaction
Under the terms of the $60 million Symphony transaction, $45 million has been provided to Symphony Icon, Inc., a newly-created company that was established to accelerate development of Lexicon's first three product candidates and hold the license to the intellectual property of LX6171, LX1031 and LX1032. An additional $15 million of equity capital was provided directly to Lexicon for general corporate purposes.
Through a purchase option, Lexicon retains the exclusive right, but not the obligation, to acquire 100% of the equity of Symphony Icon at exercise prices that range from $72 million in the second year up to $90 million in the fourth year of the collaborative development period. The option exercise may be paid in cash or a combination of cash and Lexicon common stock at Lexicon's sole discretion. If Lexicon chooses not to exercise the purchase option, Symphony Icon will retain the rights to the three programs. In exchange for the purchase option and $60 million of funding, Lexicon issued approximately 7.7 million shares of Lexicon common stock to Symphony Icon's investors at a purchase price of $3.14, the ten-day closing price average as of June 12, 2007. The collaboration is intended to last up to four years.
"Our collaboration with Symphony provides capital as well as additional drug development expertise to further the clinical development of LX1031, LX1032 and LX6171," said Arthur T. Sands, M.D., Ph.D., Lexicon's founder, president and chief executive officer. "The structure of the collaboration also provides Lexicon with the unique opportunity to develop these lead product candidates rapidly while we retain exclusive rights. Simultaneously, we expand our early-stage pipeline of drug candidates in the Lexicon 10TO10 Program to achieve 10 drug candidates in clinical development through 2010. Our agreement with Symphony affords Lexicon the flexibility to partner with pharmaceutical companies at a more advanced stage of development."
In accordance with Financial Accounting Standards Board Interpretation No. 46 regarding variable interest entities, Lexicon will consolidate the results of operations of Symphony Icon into its financial statements beginning with the filing of its second quarter 2007 financial statements.
Symphony Icon will be governed by a board of directors comprised of Arthur T. Sands, M.D., Ph.D., Lexicon's founder, president and chief executive officer; two representatives of Symphony Capital, Mark Kessel and Jeffrey S. Edelman; and two independent Board members, Steven H. Ferris, Ph.D., executive director of the NYU Silberstein Aging and Dementia Research Center, and Douglas A. Drossman, M.D., professor of medicine and psychiatry, UNC School of Medicine, Division of Gastroenterology & Hepatology and Co-Director of the UNC Center for Functional GI & Motility Disorders.
Symphony Icon has retained RRD International, LLC, a regulatory and clinical development advisory group, to serve as Symphony Icon's management team. Lexicon will continue to lead the development of LX1031, LX1032 and LX6171.
Advisors
Morgan Stanley & Co. Incorporated and Vinson & Elkins LLP represent Lexicon in the Invus transaction. Cahill Gorgon & Reindel LLP advised Lexicon's board of directors.
Simpson Thacher & Bartlett LLP represents Invus in the Invus transaction.
Paul, Weiss, Rifkind, Wharton & Garrison LLP represents Symphony in the Symphony Icon transaction.
Conference Call Tomorrow, Monday, June 18th
Lexicon management will hold a conference call tomorrow to discuss the Invus investment and the Symphony Icon collaboration at 8:30 a.m. Eastern Time. The dial-in number for the conference call is 800-289-0485 (within the United States) or 913-981-5518 (international). The passcode for all callers is 4692046. Investors can access http://www.lexpharma.com to listen to a live webcast of the call.
About Lexicon
Lexicon is a biopharmaceutical company focused on the discovery and development of breakthrough treatments for human disease. Lexicon currently has clinical programs underway for such areas of major unmet medical need as irritable bowel syndrome and cognitive disorders. The company has used its proprietary gene knockout technology to discover more than 100 promising drug targets and create an extensive pipeline of clinical and preclinical programs in the therapeutic areas of diabetes and obesity, cardiovascular disease, psychiatric and neurological disorders, cancer, immune system disorders and ophthalmic disease. To advance the development and commercialization of its programs, Lexicon is working both independently and through collaborators including Bristol-Myers Squibb Company, Genentech, Inc., N.V. Organon and Takeda Pharmaceutical Company Limited. For additional information about Lexicon and its programs, please visit http://www.lexpharma.com.
About Invus Group
Invus is a New York-based investment firm with additional offices in London and Paris. Invus invests in a variety of equity transactions, including buyouts, longer term public equity investments, venture capital, and expansion financings. Invus manages in excess of $4 billion of capital. Invus has achieved both cash on cash multiples and annual internal rates of return over 22 years that are at the very top of the private equity industry. Invus manages interests in a broad range of industries, including consumer goods, consumer services, education, software, biotechnology and medical devices.
The Invus principals draw on their broad experience in partnering with management teams and boards to help formulate and execute strategies that maximize long-term value.
About Symphony Capital Partners, L.P.
Symphony Capital is a New York-based private equity firm that invests in development stage biopharmaceutical programs. Symphony has the most experienced team in R&D project-specific financings and invests exclusively in the type of collaboration undertaken with Lexicon. Symphony Capital Partners, L.P. is the lead investor in Symphony Icon. Additional information about Symphony is available at http://www.symphonycapital.com.
About RRD International, LLC
RRD International, LLC (RRD) is an innovative product development company dedicated to supporting the global regulatory, preclinical and clinical needs of biotechnology, pharmaceutical and medical device companies. RRD provides comprehensive strategic planning and operational support from program inception to product approval including the design, management and execution of clinical trials. RRD's team of highly experienced drug and device developers has a substantial record of favorable FDA interactions and outcomes. Through its customized and flexible business approach, RRD offers a unique risk-sharing model, enabling its goals and interests to be aligned with a partner company's success. Additional information about RRD is available at http://www.rrdintl.com.
NOVC....
Very good question. The CEO resigned for personal reasons... so I take he got fired. Also, Fong Wang Clow, D.Sc., Senior Vice President of Development resigned in mid April as well. I assume the writing was on the wall that either a partnership was in the works and he resigned or he got fired as well.
Why would SGP throw $60 million cash and pay for development if they didn't have any hope in the Company? It's not a huge amount of money for SGP but no reason throwing away money.
10nis
Or maybe insiders are not buying because they know of some material news that may take place in the near future and do not want to look like they traded before the announcement. Partnership in the U.S. or in Japan would be wonderful!!
I'd be interested in knowing how many shares this board controls.... I have 28k shares (hoping to get to 40k shares in the coming weeks).
10nis
NOVC....
Yes you are correct rkrw. The initial PR was written poorly. Either way, NOVC has a ton of cash and a very low market cap and a partner with deep pockets that is motivated. It seems like a buying opportunity.
10nis
NOVC...
When does it become a buy?
$60 million upfront payment + $25 million license fee + purchase of $12 million in stock (issued approx. 1.5 million shares at $8 to SGP) + $360 million in milestone payments + royalties + Schering-Plough will be responsible for all forward development costs in exploring indications for earlier stages of prostate cancer, such as androgen-dependent prostate cancer (ADPC) and adjuvant therapy and will lead all global commercialization efforts for Asentar. Novacea will provide medical support to Schering-Plough's commercial operations for Asentar in the United States, including deployment of their Medical Science Liaisons, which will be funded by Schering-Plough.
So, NOVC received $97 million in cash + future development costs + all the potential milestone and royalty payments for 1.5 million shares and ~80% of future profits.
NOVC prior to the deal had approximately $50 million in cash on its balance sheets and will have approximately $150 million after it receives its cash from SGP. After the issuance of shares to SGP, NOVC will have approximately 24.5 million fully diluted shares. At the end of the trading today NOVC was trading at $12.27 or a market cap of $301 million... back out the cash and NOVC has a market cap of $150 million. Seems like a good low risk and decent upside return at the current market price.
Any thoughts?
10nis
DNDN....
Dendreon Rally a Brief Vacation From Reality
By Adam Feuerstein
Senior Writer
5/31/2007 12:03 PM EDT
URL: http://www.thestreet.com/newsanalysis/biotech/10359861.html
Updated from 11:52 a.m. EDT
Dendreon's (DNDN) stock price has now officially separated itself from reality.
If anything, Thursday's news is a setback for die-hard Dendreon longs. For the clear thinkers out there, it's entirely expected.
The Food and Drug Administration will require more clinical data on Provenge before the prostate cancer vaccine is considered. That data will come from the ongoing phase III trial known as Impact.
An interim analysis of the Impact data could happen in 2008, Dendreon said Thursday. Exactly when in 2008 the company won't say, but the expectation is for the middle of the year. The fact that Dendreon won't say that explicitly should give investors some pause.
So, as I wrote correctly last week, Dendreon is facing a two-year delay in Provenge approval.
If the interim analysis is positive in the middle of 2008, it will probably take another four to six months for the data to be gathered, cleaned up and submitted to the FDA. Let's assume Dendreon re-files Provenge toward the back end of 2008. If the FDA then takes another six months to review the new data, an approval decision would come in the middle of 2009.
This is good news?
I had been given the impression that the howls of protest coming from prostate cancer advocates were going to force the FDA to reverse course and approve Provenge with alacrity.
Today's news pours ice cold water all over that idea.
So, why are Dendreon shares up almost 44%? A short squeeze? Crazy momentum trading? Dendreon longs who are so blinded by hope that they can't face facts?
Maybe it's a combination of all the above. Whatever the reason, a rational investor sees this news for what it is -- an acknowledgement that Provenge has another long road ahead of it before approval.
Not much to cheer about, if you ask me.
Projection.....
I would have to say just a little too aggressive. Why don't you recalculate using a reasonable multiply like 2-3x peak sales? That way you could get to a more realistic valuation then $10 billion in 2012. GTCB would be trading at approximately $100/share w/o any further dilution at that market cap. That would be a hundred bagger and I'm unaware of any company in the world that went from a $100 million market cap to a $10 billion market cap in 5 years. But I guess anything is possible.
10nis
ONT is dead already.... I said it was dead two days ago. How's your TASR doing??
TANKER = TASR; GAPPER = SFP
GTW... Tanker??
Come on.... I thought you were bullish because of the inside buying?
10nis
DELL in WMT...
Why is that strange (i.e, being red vs. green)? It means Dell cannot figure out how to fix its once huge competitive advantage (i.e, its business model) and has thus decided to throw it out the window and be like HP and the others. Its called DESPARATION!! If Michael was smart he would sell the company to private equity.
10nis
GTCB question...
<<GTC is also nearing completion of the clinical studies necessary to support the filing of a Biologics License Application for ATryn® in the HD indication planned for the first quarter of 2008. These studies include an evaluation of the incidence of deep vein thrombosis and thromboembolisms in 17 additional hereditary antithrombin deficient patients undergoing surgical and pregnancy procedures that will be treated with ATryn® and a non-inferiority comparison to a total of 35 historical records of patients undergoing similar procedures that have been treated with plasma-derived antithrombin products. GTC plans on releasing top line data from these studies in the fourth quarter of 2007. GTC is in discussions for potential commercial partnering in the US market for ATryn®.>>
Was GTCB always planning on partnering up with respect to ATryn in the U.S.? I guess I always thought they were going to go it alone in that market.
Thanks,
10nis
TASR...
I see.... I guess I'm missed out. I prefer to buy companies that have real fundamentals.. You know a company that generates positive cash flow, earnings and has a solid balance sheet. But then again, how much fun could trading something like that be vs. a piece of crap? Enjoy the ride. $10.60 by close? I say HELL NO and am willing to bet you something good.
10nis
TASR....
It sure blew threw that old 52 wk high. New 52 wk high is now $10.27 vs. $10.25. LMAO.... Hope you're having fun!! OOPS... its now $10.30. It just may hit $10.40 or not.
10nis
AGIX...
Yeah... It must fill the gap from $7.83 to $3.13 for no other reason but the company has no drug pipeline. Dude......you better be buying hand over fist!!
Good luck,
10nis
Madcow...
GERND? Do you mean GENRD? If so, you have to be one crazy @ss to trade/invest in this dog. It has no pipeline and will never, it just did a reverse stock split (which is always very bullish sign), heavy upper management turnover, do you want me to continue? Do any of you guys do any research?
10nis
ONT... Ham...
How's your long ONT position doing today? Good luck with your trades.
10nis
ONT....
Dilution of 25% of the current shares outstanding is very bullish - I'm sure it won't have any negative impact on the share price. What do you think the equity offering to raise $20 million is going to be priced at? What are ONT's forward earnings? Good luck with your long position...
10nis
hamvestor.... ONT
Never said I was going to short it... Just said that the run in ONT is done and you got to be crazy trying to play this thing long especially with upcoming dilution. So, go do wtfu want because its not like I care how you spend your $'s.
10nis
GTW......
<<They bought more than I did>>
And.... Who cares if they bought more than you? I'm sure management is a hell of a lot richer than you as well. So, shouldn't they be buying more than you just solely on the basis that they have more money? Personally, I think their token purchases mean nothing. $20-30k purchases by management means they put 20-30% of their year-end bonuses back into the stock. That doesn't sound too significant from my end.
Happy trades,
10nis
HMIN...
Looks interesting as a short based on its earnings announced today. One day this China bubble will go snap, crackle, POP!!
10nis
GTW...
Have to laugh at the token purchases. Come on management if you really believed would you only buy 14k shares? What a joke.
10nis
ONT...
Might be done? Come on... Stick a fork in it because the fat ugly american woman is singing at the top of her lungs!!
Quiz answer...
Yes, I'm a CPA. I probably should have excluded myself from the quiz. I assume you got the question out of this week's Barron's.
10nis
Quiz answer....
New accounting rule requiring the amortization of any acquired R&D.
10nis