I've never been a big fan of attorney's who take actions to get involved with corporate actions. Nearly all their efforts come to no actions, but the attorney's often are paid.
Best I can tell, GNVC either needed this sort of action, or they needed to sell off or partner one or more of their drugs to fund development of others. I believe that XON will be able to support further development of their drugs, and this will have the potential of making XON more profitable in the long run. Short term, XON will probably benefit more greatly by actions from ZIOP successes, but if success is seen by the various efforts XON is involved with, it should have tremendous potential.
For now, their have been times when GNVC is selling for just over .297 of what XON is selling for, I believe it's a great way to get into XON long term, and take the chance that you'll be paid an additional $1 a share should Novartis initiate the Phase 2B Trial in the next 36 months. I'd say the odds are roughly even that that will happen.
Meanwhile, as I understand it, GNVC will function independently under XON, so their product development should continue and should accelerate with funding from XON. I wouldn't be surprised if after success with some of their products in the future, XON determines they should spin them off again, but retain say 40% ownership. This is a tact that Roche did a few times with Genentech, and might do again.
I can't say I'm thrilled by what's happening, but understand it, and think it could prove very profitable if XON develops products successfully. I'm not planning to make a major additional buy into XON, but don't intend to sell it in the immediate future either.
Gary |
