Something is going on with the clinical-stage biopharmaceutical company GlobeImmune Inc (NASDAQ:GBIM). It is known that the company disclosed bad news in a press release on November 17, 2016. In that update, the market got to know that Gilead Sciences, Inc. was not working any more with the company, from which Timothy C. Rodell, the CEO, had resigned and Jeffrey Dekker had been appointed as the Company’s President, Secretary and Treasurer. This news and the fact that the company had filed to delist its shares from the NASDAQ made the share price collapse last year. The stock price sank from $3.3 in July 2016 to $0.42 in December.
However, things seem to have changed recently. On March 3, the stock price jumped sharply with high volume, finishing the day at $0.24. The stock continued this uptrend the whole month and it is now valued at $0.38. Take a look at the chart:
Today, I did some research on the company and I realized that on March 23, 2017, the company reached an agreement with another competitor, NantCell, Inc. According to this agreement, which you can read here, NantCell will be buying 12,835,490 shares of GlobeImmune and will pay, for this stake, $100,000 in cash and 200,000 shares of its own stock. To sum up, a competitor is buying up to $2.0 million in the form of shares of the company. Didn't I tell you that something was going on?
It is very important in such kind of transactions to check what the buyer said about the transaction. In this case, Dr. Patrick Soon-Shiong, founder of NantCell, said the following words:
“In our mission to win the war against cancer, our team welcomes opportunities to engage with companies who are revolutionizing cancer care and treatments. We are looking forward to leveraging the expertise of GlobeImmune.”Source
I investigated further and realized that the company had started to look for a buyer, but a long time ago. In the press release dated August 13, 2015, I learnt that the company worked with investment advisor Cantor Fitzgerald & Co. This investment bank could have helped GlobeImmune to sell itself. Take a look at what was said in the press release:
“A biopharmaceutical company focused on developing products for the treatment of cancer and infectious diseases based on its proprietary Tarmogen® platform, announced today that it has engaged Cantor Fitzgerald & Co. as its exclusive financial advisor to assist in evaluating strategic alternatives intended to maximize shareholder value for GlobeImmune’s stockholders. “
Source
But, what does it mean?
It means that Cantor Fitzgerald & Co. worked with GlobeImmune for a long time and we may now finally see some big news. I believe that NantCell may finally buy GlobeImmune . I took a look at the fundamentals of the company and saw that the stock is undervalued. This company still owns valuable assets. Just look at the cash inside the company. This is a key part. The company shows $8.69 million in the balance sheet. It is a cash rich stock. If we take into account that the company has 5.75 million shares outstanding, we find that the shares should be worth at least $1.51 per share.
On the top of it, there is a very relevant fact that NantCell may look at: the net operating losses. The company accumulated a large amount of losses from the past: $226 millions. These losses are tax deductible for the company that acquires GlobeImmune. If NantCell buys it, and if it obtains profits in the following years, the net income tax would be much lower as the GlobeImmune losses offset any profits.
Conclusion
To make a long story short, the stock is reacting to the sale of a stake to a competitor, NantCell, who may be interested in the cash hidden inside GlobeImmune and its net operating losses. This buyer is silently buying shares of the company and may end up with a big stake. This story keeps getting more interesting and we expect further developments. We will be updating our subscribers as soon as we know more. For the latest updates on GBIM, sign up below!
Disclosure: We have no position in GBIM and have not been compensated for this article.
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