If anyone has the certainty that the hearing drug will be approved, or one of the other drugs GNVC's working on, than perhaps this buyout is undervalued. The problem is certainty, as well as the fact that GNVC doesn't currently have the funds needed to move products through the approval process.
Sure, I'd have liked to see the company bring more money, but XON may bring that money faster than GNVC could if they fund the development of some of the drugs GNVC has underway, but under funded.
Right now, I believe that anyone considering XON should buy it by purchasing GNVC when the time is right, which I view is whenever it's pennies higher than the .297 conversion factor for XON. I say this because I believe it's worth a few pennies to potentially earning a dollar a share for each GNVC share purchased should the GNVC hearing drug move to the Phase 2B Trial by Novartis, and the $5 million milestone be paid. Don't get me wrong, it's not a sure thing, but it's also possible that in the 3 years that applies to money from Novartis, it actually advances to one or more additional milestones, bringing in substantially more money.
GNVC shares are tracking closely to XON, but at times their is almost no premium, while at other times the premium could be a dime or more. Certainly buying at lows is a good strategy, but if you also get it at low or no premium to XON, you're paying practically nothing for the potential the Novartis hearing trial might bring.
Gary |
