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.
>>If you accept that GVAX is dead, and if you read CEGE's SEC filings indicating that essentially all their other 'assets' are gone (they even had to make a significant payment to get out of the lease on their manufacturing facility - which they spent over $100M on!), you can't value higher than cash minus what they have to pay to buy back the debt. (See the most recent PR about plans regarding the latter.)
At this point the maximum valuation becomes an exercise in elementary school arithmetic ... and you find the present stock price is too high by more than a factor of 2.<<
That was written on May 14 when the stock price of CEGE was $0.54. It is now $0.23.
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