Biotech Values

[DewDiligence]

BPAX acquires what’s left of CEGE in all-stock deal:

http://finance.yahoo.com/news/BioSante-Pharmaceuticals-and-bw-1160774611.html

The nominal deal price is $38M based on yesterday’s BPAX closing price of $2.15 and an exchange ratio of 0.1615 shares of BPAX for each share of CEGE. However, BPAX (and CEGE) are trading down today; at the current BPAX share price of $2.03, the deal values CEGE at $0.33, a 6% premium to yesterday’s CEGE close.

CEGE has about $22M of cash net of its remaining convertible debt, so BPAX is paying almost nothing for CEGE’s pipeline and equity stake in Ceregene. In effect, this merger is a financing deal by BPAX in which the company is expanding its share base by about 65% for a modest amount of cash, so it’s no wonder that BPAX’s share price is down today.

BPAX’s claim to fame is LibiGel, a topical formulation of testosterone to make women want to have sex more often. Much has been posted on this board about LibiGel in days gone by.