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Archive for the ‘Biotechnology Value Fund’ Category

We’ve decided to exit our position in OrthoLogic Corporation (NASDAQ:CAPS) at its $0.90 close yesterday. We opened the position at $0.60, so we’re up 50% on an absolute basis. The S&P500 Index closed at 752.83 on February 27, the day we opened the position, and closed yesterday at 1,068.76, which means we’re up 8.0% on relative basis.

Post Mortem

We started following CAPS (see our post archive here) because it was trading below its net cash value and Biotechnology Value Fund (BVF) had a 13.42% holding. It was an unusual holding for us because BVF’s holding is passive. Further, CAPS is a development stage company spending its cash on the development and commercialization of two product platforms: AZX100 and Chrysalin® (TP508). Ordinarily, we wouldn’t have entered a position like this, but we did so because we’d had some success in the past with BVF, particularly with our AVGN position. As BVF’s holding in CAPS is passive, BVF seems to be betting on the return from the product platforms and doesn’t view it as a liquidation play. We have no insight into the value of those product platform assets, so our holding in CAPS is purely on its cash value. As the share price is now near the reduced net cash value, we’ve decided to exit. CAPS might still be a boomer for BVF, but we can’t assess the risks properly, so we’re out.

[Full Disclosure:  We do not have a holding in CAPS. 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.]

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Although we closed our position in Avigen Inc (NASDAQ:AVGN) earlier this week, we’re keeping a watching brief on the stock. AVGN has now filed with the SEC the terms of the deal with MediciNova Inc (NASDAQ:MNOV), and they’re not as bad as the earlier report seemed to suggest. The deal has, however, attracted the ire of The Pennsylvania Funds, an AVGN shareholder, who has filed a class action lawsuit on behalf of all AVGN stockholders. The stock closed yesterday at $1.28, about $0.01 under our exit price. The terms of deal provide some downside protection and some upside optionality, and so are worth considering in some more detail, although probably not enough of either to persuade us to re-enter the stock. If the lawsuit gains traction and pushes the stock price down, however, AVGN might become attractive again.

About AVGN

We started following AVGN in December last year (see archived posts here) because it was a net cash stock and specialist biotechnology investor Biotechnology Value Fund (BVF) was pushing it to liquidate and return its cash to shareholders. Despite BVF’s failure to remove the board, we continued to maintain our position in AVGN because BVF won a number of important concessions from the board that made AVGN a much more attractive stock than it was when we started following it. We continuted to hold on when AVGN announced that it was back in negotiations with MediciNova, Inc, but closed the position for a 98.5% gain when the initial terms of the deal were announced.

The terms of the deal

The downside protection

Under the terms of the merger agreement AVGN shareholders will have the right to elect to receive an amount currently estimated by AVGN’s board at $1.24 per share in either cash or secured convertible notes to be issued by MNOV. Approximately $1.19 of the consideration will be paid at the closing, and approximately $0.05 will be paid at June 30, 2010. Both payments are subject to certain potential adjustments. The first payment is subject to adjustment based on activities related to the liquidation or sale of certain assets of AVGN in connection with the winding down of its operations prior to closing. The second payment is subject to upward adjustment based on savings in estimated expenses through closing and receipt of certain payments post-closing as well as downward adjustment in the event that closing liabilities exceed estimated liabilities through closing.

The upside optionality

The secured convertible notes will be convertible on the final business day of each month into shares of MNOV common stock at a conversion price of $6.80 per share, which conversion price is based on the volume-weighted average price of MNOV’s common stock as quoted on Nasdaq and the Osaka Securities Exchange over the 20 trading days prior to signing of the merger agreement. The convertible notes will mature on the 18-month anniversary of the closing of the merger, and the indenture governing the notes will include customary events of default and anti-dilution adjustments. Note that the last time MNOV traded above $6.80 was two years ago in August 2007.

The joint press release announcing the terms of the deal is set out below:

MediciNova and Avigen Enter Into Definitive Agreement for Business Combination

SAN DIEGO, Calif., and ALAMEDA, Calif., August 21, 2009 — MediciNova, Inc., a biopharmaceutical company that is publicly traded on the Nasdaq Global Market (Nasdaq:MNOV) and the Hercules Market of the Osaka Securities Exchange (Code Number:4875) and Avigen, Inc. (Nasdaq:AVGN), a biopharmaceutical company, today announced that they have entered into a definitive merger agreement pursuant to which MediciNova’s wholly-owned subsidiary will merge with and into Avigen. Completion of the transaction will permit the combination of the companies’ broad neurological clinical development programs based on ibudilast (Avigen’s AV-411 and MediciNova’s MN-166).

Under the terms of the merger agreement, which has been approved by both companies’ boards of directors, Avigen shareholders will have the right to elect to receive an amount currently estimated at approximately $1.24 per share in either cash or secured convertible notes to be issued by MediciNova. Approximately $1.19 of this consideration will be paid at the closing, and approximately $0.05 will be paid at June 30, 2010. As set forth in the merger agreement, both payments are subject to certain potential adjustments. The first payment is subject to adjustment based on activities related to the liquidation or sale of certain assets of Avigen in connection with the winding down of its operations prior to closing. The second payment is subject to upward adjustment based on savings in estimated expenses through closing and receipt of certain payments post-closing as well as downward adjustment in the event that closing liabilities exceed estimated liabilities through closing.

The secured convertible notes will be convertible on the final business day of each month into shares of MediciNova common stock at a conversion price of $6.80 per share, which conversion price is based on the volume-weighted average price of MediciNova’s common stock as quoted on Nasdaq and the Osaka Securities Exchange over the 20 trading days prior to signing of the merger agreement. The convertible notes will mature on the 18-month anniversary of the closing of the merger, and the indenture governing the notes will include customary events of default and anti-dilution adjustments.

In addition, Avigen’s stockholders will be entitled to one Contingent Payment Right (“CPR”) that will entitle holders under certain circumstances to a pro rata portion of one or more of the following: (1) in the event the first milestone payment of $6.0 million, or approximately $0.20 per share, under Avigen’s 2005 assignment agreement with Genzyme Corporation (“Genzyme Agreement”) is achieved in the 20 months following closing, a cash payment of the proceeds (to the extent such cash is received by MediciNova in the 20 months following closing); (2) in the event the Parkinson’s product reverts to MediciNova under the Genzyme Agreement and is subsequently sold, licensed or otherwise transferred, 50% of the proceeds received in cash in the 20 months following closing; and (3) the amount of money remaining in the plan trust established under Avigen’s management transition plan following termination of such trust. In each case, the payments will be net of any related out-of-pocket costs, damages, fines, penalties and expenses incurred by MediciNova. The CPRs will not be transferable except in limited circumstances.

Yuichi Iwaki, M.D., Ph.D., MediciNova’s President and Chief Executive Officer, said, “We are excited about combining Avigen with MediciNova and believe that it presents a unique opportunity for shareholders of both companies, most notably, the ability to more fully take advantage of the opportunities that the ibudilast compound and analogs provide in a variety of indications and markets.”

“We believe the transaction reduces many of the uncertainties involved with dissolution and is in the best interests of our shareholders,” commented Andrew Sauter, Avigen’s Chief Executive Officer, President and Chief Financial Officer. “In addition, we believe that combining the two companies’ ibudilast programs will enhance the global development potential for the compound that could benefit patients with a range of neurological indications.”

The transaction is expected to close in the fourth quarter of 2009 and is subject to approval of Avigen’s stockholders and approval of MediciNova’s stockholders as well as other customary closing conditions. In addition, the closing is conditioned on the receipt of certain releases from Avigen’s directors (other than John K.A. Prendergast), Kenneth Chahine, Kirk Johnson and Andrew A. Sauter.

RBC Capital Markets Corporation is acting as financial advisor to Avigen and Cooley Godward Kronish LLP is serving as its legal counsel. Ladenburg Thalmann & Co. Inc. (NYSE Amex: LTS) is acting as financial advisor to MediciNova, Euclidean Life Science Advisors is acting as its business advisor and Dechert LLP is serving as its legal counsel.

The AVGN press release disclosing the law suit is set out below:

On August 25, 2009, The Pennsylvania Funds filed a class action lawsuit in the Superior Court of the State of California, County of Alameda, purportedly on behalf of the stockholders of Avigen, Inc., against Avigen and its directors, alleging that Avigen’s directors breached their fiduciary duties to the stockholders of Avigen in connection with the proposed acquisition of Avigen by MediciNova, Inc. The complaint seeks to enjoin the defendants from completing the acquisition as currently contemplated.

Avigen and its directors intend to take all appropriate actions to defend the suit.

It is possible that additional similar complaints may be filed in the future. If this does occur, Avigen does not intend to announce the filing of any similar complaints unless they contain allegations that are substantially distinct from those made in the pending action.

Conclusion

With the terms of the deal announced by AVGN, we’re still happy to be out of the stock. The downside protection is subject to various adjustments, and the upside is wholly dependent on the performance of MNOV’s stock over $6.80, which is higher than the stock has traded since 2007. That said, it’s worth watching to the see the effect of the class action on the stock price, because there is a price at which the stock again becomes attractive.

Hat tip GR.

[Full Disclosure: We do not have a holding in AVGN. 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.]

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MediciNova Inc. (NASDAQ:MNOV) will acquire Avigen Inc (NASDAQ:AVGN) for $1.24 per share in cash or secured convertible notes. While the stock is trading at a slight premium to the bid, we’re taking the opportunity to exit. AVGN closed Friday at $1.29, which means we’re up 98.5% on an absolute basis. The S&P500 was at 816.21 when we opened the position, and closed Friday at 1,026.13, which means we’re up 72.7% on a relative basis.

Post mortem

We started following AVGN in December last year (see archived posts here) because it was a net cash stock and specialist biotechnology investor Biotechnology Value Fund (BVF) was pushing it to liquidate and return its cash to shareholders. Despite BVF’s failure to remove the board, we continued to maintain our position in AVGN because BVF won a number of important concessions from the board that made AVGN a much more attractive stock than it was when we started following it. We continuted to hold on when AVGN announced that it was back in negotiations with MediciNova, Inc. The consideration for the deal was announced as AVGN’s “net cash liquidation value plus $3 million” and “a contingent payment right for a specific product program milestone payment associated with Avigen’s Assignment Agreement with Genzyme Corporation, potentially subject to certain adjustments.” That seems tono longer be the case. The deal announced Friday calls for a payment of around $1.19 a share when the deal closes, with approximately $0.05 per share to be paid on June 30, 2010. This is a disappointing deal. AVGN has been sold for its net cash liquidation value plus $3M from MediciNova. We held on because we believed that there was a reasonable chance that AVGN could yield more than its then $1.34 share price when the “contingent payment right” capturing the near term payments from Genzyme was taken into account. MNOV has not provided AVGN shareholders with any value for AVGN’s AV411 assets and program.

Here is the press release announcing the sale (via MarketWatch):

MediciNova To Acquire Avigen For $1.24 a Share

William L. Watts

MarketWatch Pulse

LONDON — Biopharmaceutical firm MediciNova Inc. will acquire Avigen Inc. for $1.24 a share in cash or secured convertible notes, under an agreement announced Friday by the biopharmaceutical firms. Under the deal, around $1.19 a share will be paid when the deal closes, with approximately 5 cents a share to be paid on June 30, 2010. The transaction is expected to close in the fourth quarter, pending the approval of Avigen and MediciNova stockholders and other considerations. The companies said the merger will allow them to combine their neurological clinical development programs based on ibudilast, an anti-inflammatory drug.

[Full Disclosure: We have a holding in AVGN. 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.]

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Avigen Inc (NASDAQ:AVGN) has filed its 10Q for the period ended June 30, 2009.

One interesting aspect of the 10Q is the cost the company attributes to responding to the proxy fight and hostile tender offer:

Operating Activities. Net cash used in operating activities was $8.2 million during the six months ended June 30, 2009. Net cash used in operating activities during this period was primarily used to fund costs associated with our response to a proxy fight and hostile tender offer, and winding down clinical research and development activities, including non-clinical studies and clinical trials performed by third parties.

$8.2M? That’s $0.27 per share! Granted, some of it went to other activities, but presumably costs associated with “response to a proxy fight and hostile tender offer” was the larger portion of the $8.2M and that’s why it was listed first. It’s galling what directors are allowed to spend fighting off shareholders.

We started following AVGN in December last year (see archived posts here) because it was a net cash stock and specialist biotechnology investor Biotechnology Value Fund (BVF) was pushing it to liquidate and return its cash to shareholders. Despite BVF’s failure to remove the board, we continued to maintain our position in AVGN because BVF won a number of important concessions from the board that made AVGN a much more attractive stock than it was when we started following it. AVGN is now back in negotiations with MediciNova, Inc. regarding a proposed acquisition by MediciNova. The consideration for the deal is AVGN’s “net cash liquidation value plus $3 million” and “a contingent payment right for a specific product program milestone payment associated with Avigen’s Assignment Agreement with Genzyme Corporation, potentially subject to certain adjustments.” The stock price reflects this: AVGN closed yesterday at $1.34, up 106.2% from our $0.65 purchase price. We last estimated the net cash liquidation value at around $34M or $1.14 per share. We’ve now updated our estimate to $35M or $1.17 per share. Including the $3M from MediciNova would increase that value to around $38M or $1.27per share. We believe that there is a reasonable chance that AVGN will yield more than its current $1.34 share price when the “contingent payment right” capturing the near term payments from Genzyme is taken into account. AVGN shareholders also have an option-like exposure to any value in AVGN’s AV411 assets and program, although we cannot estimate the value of this with any certainty.

The value proposition updated

Set out below is our adjusted balance sheet for AVGN (the “Book Value” column shows the assets as they are carried in the financial statements, and the “Liquidating Value” column shows our estimate of the value of the assets in a liquidation):

AVGN Summary 2009 6 30

Conclusion

While BVF’s slate was unsuccessful at the special meeting, AVGN’s board has developed its own plan of liquidation, which should put a floor on AVGN’s stock at around its net cash value of $34M or $1.14 per share less wind down costs. There exists a good chance that AVGN will yield considerably more than its net cash value. The net cash estimate does not take into account AVGN’s AV411 assets and program or near term payments from Genzyme. With the downside protected, and a good chance at some upside from here, we think AVGN still represents good value, and we’re going to maintain our position accordingly.

[Full Disclosure: We have a holding in AVGN. 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.]

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OrthoLogic Corporation (NASDAQ:CAPS) has filed its 10Q for the quarter ended June 30, 2008.

We’ve been following CAPS (see our post archive here) because it trades below its net cash value and Biotechnology Value Fund (BVF) has a 13.42% holding. It’s an unusual holding for us because BVF’s holding is passive. CAPS is a development stage company that is spending its cash on the development and commercialization of two product platforms: AZX100 and Chrysalin® (TP508). Ordinarily, we wouldn’t touch a position like this with a ten-foot pole. We entered into it because we’ve had some success in the past with BVF, particularly with our AVGN position. As BVF’s holding in CAPS is passive, BVF seems to be punting on the return from the product platforms and doesn’t view this as a liquidation play. We’ve got no insight into the value of those product platform assets, so our holding in CAPS is tenuous. We’ll exit if the share price gets near the net cash value, or the cash burn reduces the net cash value to the share price. At CAPS’s $0.70 close yesterday, our position is up 16.7% since we initiated it. We last estimated CAPS’s net cash value at $43.8M or $1.07 per share. We’ve now adjusted that valuation to down $37.8 or $0.92 per share. At the current cash burn rate, we estimate that CAPS has six months before the cash burn reduces the net cash value to around the current share price.

The value proposition updated

The summary of our estimate for the company’s liquidation value is set out below (the “Book Value” column shows the assets as they are carried in the financial statements, and the “Liquidating Value” column shows our estimate of the value of the assets in a liquidation):

CAPS Summary 2009 06 30Off-balance sheet arrangements and Contractual obligations

There is no discussion in the 10K about CAPS’s off-balance sheet arrangements. CAPS’s only contractual obligation disclosed in 10K is for the company’s Tempe, Arizona facility and is $1.3M through 2012.

Conclusion

At its $0.70 close Friday, CAPS is trading at 76% of our estimate of its $0.92 per share net cash value.  We’ll exit if the share price gets near the net cash value, or the cash burn reduces the net cash value to the share price. At the current cash burn rate, we estimate that CAPS has six months before the cash burn reduces the net cash value to around the current share price.

[Full Disclosure:  We do not have a holding in CAPS. 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.]

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Avigen Inc (NASDAQ:AVGN) is back in negotiations with MediciNova, Inc. regarding a proposed acquisition of AVGN by MediciNova. The consideration for the deal is AVGN’s “net cash liquidation value plus $3 million” and “a contingent payment right for a specific product program milestone payment associated with Avigen’s Assignment Agreement with Genzyme Corporation, potentially subject to certain adjustments.”

We started following AVGN in December last year (see archived posts here) because it was a net cash stock and specialist biotechnology investor Biotechnology Value Fund (BVF) was pushing it to liquidate and return its cash to shareholders. Despite BVF’s failure to remove the board, we continued to maintain our position in AVGN because BVF won a number of important concessions from the board that made AVGN a much more attractive stock than it was when we started following it. The stock price reflects this: AVGN closed yesterday at $1.32, up 103.8% from our $0.65 purchase price. We last estimated the net cash liquidation value at around $34M or $1.14 per share. Including the $3M from MediciNova would increase that value to around $37M or $1.24 per share. We believe that there is a reasonable chance that AVGN will yield more than its current $1.32 share price when the “contingent payment right” capturing the near term payments from Genzyme is taken into account. AVGN shareholders also have an option-like exposure to any value in AVGN’s AV411 assets and program, although we cannot estimate the value of this with any certainty.

The press release from AVGN regarding the business combination with MediciNova is set out below:

MediciNova and Avigen Confirm Understanding for Key Terms for a Business Combination

SAN DIEGO and ALAMEDA, Calif., June 25, 2009 (GLOBE NEWSWIRE) — MediciNova, Inc., a biopharmaceutical company that is publicly traded on the Nasdaq Global Market (Nasdaq:MNOV – News) and the Hercules Market of the Osaka Securities Exchange (Code Number:4875), and Avigen, Inc. (Nasdaq:AVGN – News), a biopharmaceutical company, today announced that they have confirmed their understanding of certain key terms for a proposed acquisition of Avigen by MediciNova that would combine the companies’ broad neurological clinical development programs based on ibudilast (Avigen’s AV-411 and MediciNova’s MN-166).

MediciNova and Avigen currently contemplate that the terms of the merger would provide that Avigen shareholders receive consideration approximating Avigen’s net cash liquidation value plus $3 million. Avigen shareholders would be able to elect to receive this consideration in cash at closing or to receive a convertible security by which that cash consideration may be converted into MediciNova stock at a conversion price equal to the greater of $4.00 or a mutually agreeable volume-weighted average price of MediciNova common stock. At the end of 18 months, any unexercised convertible securities would be paid out at their cash value. This would allow shareholders of both companies the opportunity to participate in the future value created by combining the companies’ product portfolios. In addition to the consideration above, all Avigen shareholders would receive a contingent payment right for a specific product program milestone payment associated with Avigen’s Assignment Agreement with Genzyme Corporation, potentially subject to certain adjustments.

Yuichi Iwaki, M.D., Ph.D., MediciNova’s President and Chief Executive Officer, said, “We are excited to announce this important step towards a potential acquisition of Avigen and believe that the proposed merger presents clear advantages for the shareholders of both companies, most notably, the ability to more fully take advantage of the opportunities that the ibudilast compound and analogs provide in a variety of indications and markets. We look forward to finalizing definitive documentation as expeditiously as possible and to presenting this transaction for shareholder approval in due course.”

“Avigen believes the proposed merger on the terms currently contemplated would be in the best interests of our shareholders and we intend to continue to negotiate with the goal of reaching agreement on all of the terms and presenting it to our shareholders for approval in the third quarter of 2009,” commented Andrew Sauter, Avigen’s Chief Executive Officer, President and Chief Financial Officer. “We believe that combining our ibudilast programs, AV411 and MN-166, would enhance the global development potential for the compound in a range of neurological indications, including Multiple Sclerosis, neuropathic pain and drug addiction.”

The understanding reached by the parties is nonbinding and subject to definitive documentation and due diligence. The closing of any proposed merger would also be subject to customary closing conditions, including required shareholder and regulatory approvals and the absence of material adverse changes. MediciNova and Avigen are not legally obligated to continue discussions regarding the proposed transaction on the terms described herein or on any other terms. No definitive agreements have been reached, and there can be no assurances that definitive agreements will be successfully negotiated, that the proposed terms will not be revised or that the proposed merger will be completed.

[Full Disclosure: We have a holding in AVGN. 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.]

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Avigen Inc (NASDAQ:AVGN) has been granted a United States Patent for the treatment of neuropathic pain with its AV411 (ibudilast) compound.

We started following AVGN in December last year (see archived posts here) because it was a net cash stock (i.e. it was trading at less than the value of its cash after deducting all liabilities), albeit a cash burning net cash stock, and specialist biotechnology investor Biotechnology Value Fund (BVF) was pushing it to liquidate and return its cash to shareholders. Despite BVF’s failure to remove the board, we continued to maintain our position in AVGN because BVF won a number of important concessions from the board that made AVGN a much more attractive stock than it was when we started following it. The stock price reflects this: AVGN is up 94% from $0.65 when we initiated the position to close yesterday at $1.26. We’ve reduced our estimate of the net cash slightly to $34M or $1.14 per share. We believe that the there is a good chance that AVGN will yield considerably more than its net cash value. The net cash estimate does not take into account AVGN’s AV411 assets and program or near term payments from Genzyme, which could be worth as much as $6M to $25M or between $0.18 or $0.75 per share more.

The announcement from the company is as follows:

Avigen Granted AV411 Patent for Neuropathic Pain

ALAMEDA, Calif., May 20, 2009 (GLOBE NEWSWIRE) — Avigen, Inc. (Nasdaq:AVGN) a biopharmaceutical company, announced today that it has been granted United States Patent No. 7,534,806, entitled “Method for Treating Neuropathic Pain and Associated Syndromes.” The patent covers the treatment of neuropathic pain with therapeutic doses of AV411 (ibudilast), including syndromes like diabetic neuropathy, post-herpetic neuralgia, and fibromyalgia, and neuropathic pain associated with stroke or accompanying cancer chemotherapy. Avigen anticipates additional patents will be issued covering indications that include addiction, delirium, and psychotic disorders, as well as composition of matter claims on AV411 analogs. AV411 is marketed in Japan but not approved for any indication in the United States.

“This patent is a critical first step to securing broad exclusivity for AV411 and analogs in the key markets of neuropathic pain and addiction,” commented Andrew Sauter, Avigen’s Chief Executive Officer, President and Chief Financial Officer. “We are currently seeking to monetize our AV411 drug development portfolio and believe the issuance of this patent, along with our active U.S. IND and Phase 2-staged data package, enhances the value proposition to potential buyers.”

“This is a significant accomplishment that reflects Avigen’s strategic efforts to identify novel mechanisms to treat neurologic disorders and to protect the know-how and intellectual property of our scientific discoveries,” stated Kirk Johnson, Ph.D., Vice President of Research and Development at Avigen. “Our intellectual property portfolio is advancing in parallel with our AV411 development efforts for pain states and certain drug addiction conditions, thus creating a cohesive program.”

Avigen discovered the utility of AV411 through its internal program to develop innovative and targeted approaches to reducing nervous system dysfunction caused by glial cell activation. Avigen was issued the new patent after demonstrating that AV411 effectively and safely treated neuropathic pain in well-recognized, standard preclinical animal models. The claims broadly cover the treatment of neuropathic pain, and make specific reference to using AV411 to treat many forms of neuropathic pain including diabetic neuropathy, postherpetic neuralgia, trigeminal neuralgia, HIV, stroke, fibromyalgia, reflex sympathetic dystrophy, complex regional pain syndrome, spinal cord injury, sciatica, phantom limb pain, and cancer chemotherapeutic-induced neuropathic pain.

AVGN’s board is developing a plan of liquidation, which should put a floor on AVGN’s stock at around its net cash value of $34M or $1.14 per share less wind down costs. There exists a good chance that AVGN will yield considerably more than its net cash value. The net cash estimate does not take into account AVGN’s AV411 technology or near term payments from Genzyme, which could be worth as much as $6M to $25M or between $0.18 or $0.75 per share more. With the downside protected, and a good chance at a substantial $0.75 per share upside from here, we think AVGN still represents good value, and we’re going to maintain our position accordingly.

[Full Disclosure: We have a holding in AVGN. 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.]

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