Replies to post #38813 on Biotech Values

[stogis_ohio]

Response Biomedical, theres a few obvious questions.

The little Canadian seems to have test expertise in many areas, but why does it seem such a bargain ? Why dont the stock double on news like this ? Have a bead on shares issued ?

And sicne when did 3M get into biotechnology ?

Stogi

[urche]

Response Biomedical Announces Strategic Alliance with 3M

Looking over the details of this alliance I am struck by similarities to another deal much talked about on this board. In this case an undervalued (IMO) biotech start up company in need of a partner to develop its promising products makes a deal with a much larger company with similar interest and expertise. In the Response/3M deal, the smaller player loses 13% ownership of its company in exchange for $US 8 million of capital. Also, the shares, which can't be sold for at least a year, were acquired at a steep discount to the current market price. RBM.v traded at $CDN 0.73-.77 on the open market yest. So, these shares were acquired by 3M at about 20% discount, from the perspective of current shareholders.

Sounds a lot like the GTCB/Leo deal to me.


http://biz.yahoo.com/cnw/061211/response_3m_investmnt.html?.v=1

Response Biomedical Announces Closing of US $8 Million Investment by 3M as Part of Strategic Alliance
Monday December 11, 5:45 pm ET


VANCOUVER, Dec. 11 /CNW/ - Response Biomedical Corporation (TSX-V: RBM, OTCBB: RPBIF) announced today that it has now closed the US $8 million equity investment made in Response Biomedical by 3M Company. The strategic alliance, announced December 7, 2006, gives 3M Company approximately a 13 percent ownership position in Response Biomedical. The financing is part of a strategic alliance between the two Companies and grants 3M worldwide exclusive rights, through its medical division, to pursue the development and commercialization of diagnostic products targeting hospital and community acquired infectious diseases, using Response Biomedical's RAMP(R) testing platform.
3M's equity investment consists of 14,797,419 shares at a price of Canadian $0.62 per share (US $0.5406). 3M has agreed not to sell any of its shares for a period of 12 months from closing. For a one-year period, 3M shall have a pro rata right, based on their percentage equity ownership in the Company, on a fully diluted basis, to participate in subsequent issuances of equity securities of the Company. The proceeds from the financing will be used for general working capital purposes, capital equipment acquisitions required for the scale up of the Company's manufacturing processes and development of its next generation RAMP Reader.

About Response Biomedical