Home
Savings Rates
CD Rates
Bonds
Mortgage Rates
Home Equity Rates
Auto Loan Rates
Credit Cards
Brokerages

CVTX gets buyout offer-

Article Submitted by: pharmaking
Stocks - Options - Mutual Funds


I have written many times about CVTX, a small biotech specializing in cardiac drugs.
I have beleived that the stock was undervalued for some time.
Now Astellas has shown they agree.

 

Submitted: Jan 27, 2009    Views: 672    Comments: 1    Likes: 2   


Today, Astellas made public thier attempts to purchase CVTX.  They apparently made an all cash offer in November for $16/share- back when the stock was trading at arround $8-9 and were rebuffed. Now that the stock is up in the $11s, they are trying to exert pressure on management to come to the table.

CVTX and Astellas have worked together for years, and a fumor of a acquision is one I first heard about three years ago.  CVTX's second drug, regadonosin was brought to market in cooperation with Astellas- who paid for 2/3 of the cost of the trials and is now selling the durg- giving CVTX a royalty.

They say in their open letter today, that during this interaction they have watched CVTX grow and have been very impressed with the potential for further growth- if they had more resources.  Apparently CVTX hasn't been willing to sit down with Astellas to discuss their offer further.

This morning CVT's stock is trading above the $16 offer price.  It seems clear that for Astellas to prevail, they will have to raise their offer price at least a few bucks.  The premium that was present in November is no longer there as great as result of  a 30% appreciation in the stock ( which was a result of increasing sales and revenues.) 

My guess and hope is that this deal does happen at arround $19.  Apparently Astellas has plenty of cash, and completing this acquision would save them some $20-30 million/year in royalties right off the bat.

I certainly hope that some of you have followed my suggestion of buying this stock when it traded in the single digits.

One more interesting issus: the spate of insider buying in December- Was it related to this offer? If so, would that make it illegal?  Something to look into after I realize my profits.


Sponsor Updates and Offers

Sign up for Zions Direct’s free weekly newsletter.

Get market information, CD and Bond auction updates, new-issue alerts and more.

Related Articles:



2

Email this story Email to someone | Print Story Print Content | Add to reading list

Comments Received:

pharmaking
pharmaking

One correction:
My broker's website mentioned flagged multiple insider buys in December, but on closer review, it appears that these were just options exercised, and then the stock was sold. So really this was the equivalent of insider selling, not buying. Sort of strange, atleast no insider trading issues.

Posted: Jan 27, 2009



Add Your Comments:

Your Name:

Spam protection control:


© Copyright 2010 pharmaking All rights reserved. pharmaking has granted BestCashCow.com, LLC non-exclusive rights to display this work on Bestcashcow.com.

Financial products of all nature bear inherent risks and this website is not a financial advisory service; it is a forum for users to share and to compare notes and observations on financial publications. The website provides, free of charge, the technical and logistical apparatus and the medium for users to share and to publish financial information and to comment on publications. As such, the website's operator can not and does not take responsibility for information, observations or opinions of any sort or nature provided by third parties with whom it is not affiliated who use the website to publish, to comment or as a means of solicitation. Users are specifically warned against following any advice related to specific instruments, including, but not limited to, equity securities, that may be provided by other users directly on this site or on web pages to which other users have provided links on this site. BestCashCow.com can not and does not check or verify the qualifications and credentials of users who publish or comment on this site or on linked pages. Users should seek personalized advice from qualified professionals regarding all personal financial issues and evaluate the risks and applicability to their own circumstances of each financial product discussed regardless of who the publisher is or purports to be. Should you, through your use of this site, identify an individual or organization purporting to offer personalized advice, you bear all responsibility to ensure that the individual or organization has the qualifications that they may represent on the website, and that their advice is appropriate for your circumstances. On certain webpages, BestCashCow.com provides information related to rates on US-based savings accounts, CDs, short-term government bonds, and other US cash equivalent securities, also free of charge to internet users for their independent use. The accuracy of this information is not guaranteed, and the information, like all other information on this website, should not be construed to provide investment advice, nor to endorse a financial product of any sort.

© 2010 BestCashCow.com, LLC. All Rights Reserved. Terms under which this service is provided to you. Privacy Policy.