Greenbackd

Neurobiological Technologies Inc (NASDAQ:NTII) has engaged a financial adviser to explore a sale of the company or its major assets to determine “if there is a transaction more beneficial to our shareholders than a liquidation,” according to its CEO, William Fletcher.

We’ve been following NTII (see our post archive here) because it’s trading at a substantial discount to our estimate of its liquidating value and stockholders representing at least 45% of its stock (one stockholder estimates 65%) have called for its liquidation. NTII is up 25% from $0.53 when we started following it to close yesterday at $0.66. At yesterday’s close, NTII has a market capitalization of just $17.8M, which is around 80% of our estimate of its $21.9M or $0.81 per share liquidation value. There exists the possibility that its liquidation value is significantly higher again if NTII receives a portion of the net proceeds paid to Celtic Pharmaceuticals upon a sale of XERECEPT. The company’s decision to explore a sale or liquidation is welcome news. With Biotechnology Value Fund, Millennium Technology Value Partners and Highland Capital Management, holding approximately 45% of NTII’s outstanding stock and calling for its liquidation, we feel the company will be under some pressure to accede and that should lead to a reasonably quick resolution.

Reuters has the article:

March 26 (Reuters) – Neurobiological Technologies Inc (NTII.O) said it was evaluating a potential sale of the company or its major assets and had hired a financial adviser to help with the process.

“We have retained RBC Capital Markets to assist us in efficiently determining if there is a transaction more beneficial to our shareholders than a liquidation,” acting Chief Executive William Fletcher said.

In January, the company had suspended further development of Viprinex, its drug for acute ischemic stroke, and cut about 75 percent of its workforce.

Thanks JM.

[Full Disclosure:  We do not have a holding in NTII. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only. Do your own research before investing in any security.]