NorthWest Biotherapeutics Inc (NWBO)

[hyperopia]

Well there is another way. Have you heard of Contingent Value Rights (CVR’s)? It’s basically an option whose payment is contingent on a future event, and they are sometimes used in mergers and acquisitions. This way some of the risk associated with the deal is placed on the shareholders of the acquired company. They are registered and tradable securities but are pretty illiquid, since their value is very speculative.

One of the most notorious cases of a CVR being used was when Allergan (AGN) bought Tobira (TBRA) a few years ago for their NASH drug (Cenicriviroc) for an upfront cash payment of $28 per share and $50 per share in CVRs. The CVR was based on the successful completion of certain development, regulatory, and commercial milestones; something like $15 per share paid when the first patient was dosed for the phase III trial, $5 paid upon NDA submission, $15 paid upon first commercial sale, $15 paid on $1B in sales, etc.