Considering that DOVP is trading at a huge (40%?) discount to cash, and that they sublicensed NBIX' insomnia drug for the following terms:
>>In June 1998, we sublicensed NBI-34060 to Neurocrine on an exclusive,
worldwide basis for 10 years or, if later, the expiration of the patent covering
either the compound or the marketed product. Upon the occurrence of either of
these two events, Neurocrine will be deemed to have a fully-paid, royalty-free
license to the compound and the marketed product. During the term of the
agreement and after payments to our licensor, Wyeth-Ayerst, we are entitled to
receive a royalty equal to 3.5% of net sales, if any, and milestone payments of
up to approximately $4.7 million. We have received milestone payments consisting
of $1.3 million in cash, of which we have retained $845,000 following required
payments to Wyeth-Ayerst, and warrants to purchase 75,000 shares of Neurocrine's
common stock, of which we will retain warrants to purchase approximately 50,000
shares, after payments to Wyeth-Ayerst and transaction-related expenses. We
achieved the milestone in November 2001. Neurocrine also purchased shares of our
series A preferred stock at an aggregate purchase price of $440,000.
Neurocrine is responsible for the research, development and
commercialization of NBI-34060. We have the right to terminate the agreement,
with regard to the entire territory, if Neurocrine terminates the research and
development program or halts the research and development program for six months
or longer within the United States, other than for reasons relating to
regulatory constraints. Likewise, if Neurocrine halts, for six months or longer,
or terminates the research and development program in any other country, we have
the right to terminate the agreement with respect to that country. If we
terminate the agreement due to an uncured breach by Neurocrine, they must
transfer to us all information and know-how related to NBI-34060 or the marketed
product, and all governmental filings and approvals.<<
I'm wondering if a) this might be a higher risk/reward play on the near term driver for NBIX, NBI-34060, than NBIX itself; or b) could be used as a part of an arbitrage or hedging strategy in conjunction with NBIX.
Thoughts, anyone?
Cheers, Tuck |
