Biotech Values

[DewDiligence]

NUVO signaled a likely buyout last night (#msg-32411363), and they get bought out after all. Yet it’s a Pyrrhic victory for shareholders because the deal ascribes essentially no value for NUVO’s NU172 anticoagulant and less than full value, IMO, for NUVO’s cash and Nasdaq listing.

This is the danger of investing in biotechs merely because they trade at a wide discount to net cash—although you are very likely to get a buyout deal in due course, the deal terms may end up being unrewarding.