PE Biosystems Deal
I’m envious of Orchid shareholders. ORCH announces a licensing deal with PE Biosystems and the stock adds over $300 million to its market cap on the day of announcement. Quite spectacular!
In mid-June ID Biomedical (NASDAQ: IDBE) announced that PE Biosystems had licensed its “… cycling probe technology for genomics, single nucleotide polymorphisms and other uses.” Under this agreement IDBE received a $5 million up-front license fee and will get royalties based on future product sales. After an initial flurry of activity and a modest (by ORCH standards anyway) initial price rise, the stock settled and ended the day only slightly higher than where it started; hence, the source of my envy. The stock price was, no doubt, held in check by selling emanating from a recently closed private placement. Oh well, that selling has to dry up sometime, hopefully soon.
That brings me to the point of this post. As investors who’ve capitalized handsomely on the market’s fascination with genomics, it might be worth your while to take a look at IDBE. In addition to cycling probe technology (the company’s gene-based testing platform), IDBE also has vaccines for Group A Strep (currently in clinical trials), HIV/AIDS, TB and E coli in various stages of development. Most importantly, its clear that the stock market has not yet ascribed any value to the potential genomics application of cycling probe technology in general or the PE Biosystems deal in particular. Furthermore, IDBE is reputed to be in licensing discussions with at least two other genomics firms. Can stock market recognition and its concomitant reward, be far off? I suspect not. |
