Biotech Values

[DewDiligence]

TELK reverse-merges with MabVax Therapeutics:

http://finance.yahoo.com/news/telik-mabvax-therapeutics-announce-definitive-203000644.html

Telik, Inc…and MabVax Therapeutics, Inc., a privately held cancer immunotherapy company, have entered into a definitive merger agreement [to]…be combined into a publicly traded company focused on the development of proprietary immunotherapy-based products to diagnose and treat cancer.

…Upon the closing of the transaction, Telik will be re-named MabVax Therapeutics Holdings, Inc. and will operate under the leadership of the MabVax management team… Michael M. Wick, M.D., Ph.D., who currently serves as President and CEO of Telik, will remain on the board. [Bad idea, but MabVax probably had no choice.]

…Telik stockholders, warrantholders and optionholders prior to the close will own 15% of the combined company and MabVax stockholders, warrantholders and optionholders will own 85%.

It’s reasonable to view this deal as an 18% (0.15/0.85) dilution by MabVax in order to obtain TELK’s Nasdaq listing, and one may presume that the value ascribed to Telintra is de minimis. All told, TELK is one of the more spectacular failures in biotech in the past decade.