DVAX's timing of their secondary certainly looks dumb. They surely could have held off pricing the secondary until after public release of the NEJM article and, if it were my call, until after release of the Tolamba results in January, 2007.
But in management's defense, they really had no way of knowing the stock would jump so much on publication of a pilot study's results that were five years old and that had been superceded by Tolamba's Phase 2/3 trial results reported in January, 2006. In addition , DVAX's stock had a history of lukewarm responses to prior good news; e.g., to the AztraZeneca partnership announced in early September. In fact, it might be that the secondary itself, and some related pump priming by DVAX's investment banker, Pacific Growth Equities, was the reason DVAX had such a run on the NEJM news. Finally, it should be noted that the secondary's provisions included a 30-day lockup for DVAX management, so it's unlikely they personally benefitted. |
