Generex: Establishing A Value For Antigen Express' Dividend Shares
Feb. 23, 2019 12:48 AM ET | About: Generex Biotechnology Corp. (GNBT), Includes: IMDZ, MRK
Thomas Barnard
Special situations, Deep Value, long/short equity, Growth
(200 followers)
Summary
Generex will distribute 10% of its shares in Antigen Express on Monday, February 25, 2019.
Immune Design accepted a $5.85 per share offer from Merck.
Like Immune Design, Antigen Express is partnering with Merck on a trial.
On Monday, February 25th, Generex (OTCQB:GNBT) will distribute shares in its subsidiary Antigen Express at a rate of one share for every four shares of Generex to shareholders of record on January 30, 2019. If there are about 60 million Generex shares, that means that there will be 15 million shares outstanding. If Generex is keeping 90% of the company, that means it will retain 135 million shares of a total of 150 million shares.
A development on February 23, 2019, shows what the value of Antigen Express might be like. Immune Design (NASDAQ:IMDZ) agreed to be acquired by Merck (NYSE:MRK) for $5.85 per share, or roughly $300 million for the entire company. Like Antigen Express, Immune Design desires to trigger an immune response that will attack cancers. Also like Antigen Express, Immune Design had partnered with Merck to see if its drug candidate would benefit from working with Merck's drug Keytruda. Immune Design has no FDA approved drug or therapy as yet, which is the same case as Antigen Express.
Doing a simple arithmetic calculation ($300 million divided by 150 million shares), we know that Antigen Express is worth $2 per share. So when Antigen Express' shares trade, they might well trade in the range of $2.
This could be at the low end of possibilities. It also seems Immune Design is under pressure:
In an October 16, 2018, news story, IMDZ reported that it decreased its workforce by 20%. The company also announced it was discontinuing a line of cancer research.
It appears that two law firms are investigating the price at which the transaction took place, Johnson Fistel, LLP and Levi & Korsinsky, LLP
This might have consequences for the parent company, Generex. If Generex has 135 million shares, it would mean its shares are worth $270 million. Since the current value of GNBT is very much tied up to the Veneto transaction and other acquisitions, it looks like this could be added to Generex's current market cap. Please refer to my general piece and the piece on cancer vaccines to put this all into perspective.
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Feb. 23, 2019 12:48 AM ET | About: Generex Biotechnology Corp. (GNBT), Includes: IMDZ, MRK
Thomas Barnard
Special situations, Deep Value, long/short equity, Growth
(200 followers)
Summary
Generex will distribute 10% of its shares in Antigen Express on Monday, February 25, 2019.
Immune Design accepted a $5.85 per share offer from Merck.
Like Immune Design, Antigen Express is partnering with Merck on a trial.
On Monday, February 25th, Generex (OTCQB:GNBT) will distribute shares in its subsidiary Antigen Express at a rate of one share for every four shares of Generex to shareholders of record on January 30, 2019. If there are about 60 million Generex shares, that means that there will be 15 million shares outstanding. If Generex is keeping 90% of the company, that means it will retain 135 million shares of a total of 150 million shares.
A development on February 23, 2019, shows what the value of Antigen Express might be like. Immune Design (NASDAQ:IMDZ) agreed to be acquired by Merck (NYSE:MRK) for $5.85 per share, or roughly $300 million for the entire company. Like Antigen Express, Immune Design desires to trigger an immune response that will attack cancers. Also like Antigen Express, Immune Design had partnered with Merck to see if its drug candidate would benefit from working with Merck's drug Keytruda. Immune Design has no FDA approved drug or therapy as yet, which is the same case as Antigen Express.
Doing a simple arithmetic calculation ($300 million divided by 150 million shares), we know that Antigen Express is worth $2 per share. So when Antigen Express' shares trade, they might well trade in the range of $2.
This could be at the low end of possibilities. It also seems Immune Design is under pressure:
In an October 16, 2018, news story, IMDZ reported that it decreased its workforce by 20%. The company also announced it was discontinuing a line of cancer research.
It appears that two law firms are investigating the price at which the transaction took place, Johnson Fistel, LLP and Levi & Korsinsky, LLP
This might have consequences for the parent company, Generex. If Generex has 135 million shares, it would mean its shares are worth $270 million. Since the current value of GNBT is very much tied up to the Veneto transaction and other acquisitions, it looks like this could be added to Generex's current market cap. Please refer to my general piece and the piece on cancer vaccines to put this all into perspective.
Like this article
