Navidea Biopharmaceuticals Inc (NYSEMKT: NAVB)
Navidea Biopharmaceuticals had an incredible day in the market yesterday that is being followed up with continued gains today. The gains are happening for a very good reason. The company has made the decision to sell an asset. Today, we’ll talk about the news, what we’ve seen in the market since, and whether or not NAVB will be able to hold onto the gains.
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NAVB Gains Big On Asset Sale
As mentioned above, Navidea Biopharmaceuticals had an incredible day in the market yesterday, with massive gains continuing today. The gains we’ve seen are the result of an asset sale. In a press release yesterday, we learned that the company has made the decision to sell Lymphoseek.
Yesterday, NAVB signed a Letter of Intent with Cardinal Health, Inc. (NYSE: CAH). The agreement surrounds the sale of all rights, title, and interest to Lymphoseek. The agreement covers all FDA-approved, pending, and future oncology diagnostic indications in North America.
In return for the Lymphoseek rights, CAH has agreed to make a payment of $80 million to NAVB upon the closing of the deal. On top of that, the company will pay additional royalties and sales-based milestones that will have a cap of $310 million. Finally, Cardinal Health has agreed to license back to Navidea a portion of the purchased intellectual property to allow for ongoing business associated with non-competing indications. In a statement, Michael M. Goldberg, M.D., Chairman of the Board of Directors at NAVB, had the following to offer with regard to the deal:
“This is a significant announcement for all of us at Navidea. This agreement with Cardinal Health will provide significant financial resources for us to repay all outstanding debt to CRG and accelerate the development of our robust pipeline of diagnostic products, which are notably focused on Rheumatoid Arthritis and Cardiovascular disease, as well as our Macrophage Therapeutics pipeline. We have enjoyed a longstanding and successful relationship with Cardinal Health, and we are looking forward to continuing our collaboration.”
The above statement was followed up by Tiffany Olson, President of Nuclear Pharmacy Services for Cardinal Health, who had the following to offer:
“Lymphoseek has been an important diagnostic tool for physicians and their patients who are looking for additional clarity when facing potentially life-changing diagnoses… We have been Navidea’s exclusive US distributor of Lymphoseek for many years. That relationship has set the groundwork for his new agreement, and the Cardinal Health team will continue to market, sell and provide Lymphoseek to those who need it.”
How The Stock Reacted To The News
As investors, we know that the news moves the market. This case is no different. The sale of Lymphoseek was overwhelmingly positive news for NAVB. So, naturally, we’re seeing big gains. Yesterday, the stock saw dramatic gains that are continuing into today. Currently (12:39), the stock is breaking out of penny stock territory – it’s trading at $1.01 per share after a gain of $0.20 per share (25.15%) thus far today.
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Can The Stock Hang Onto Gains?
Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from NAVB. At the end of the day, the sale of Lymphoseek is overwhelmingly positive news. The initial $80 million payment will be enough to pay off a massive amount of debt and fund further studies surrounding an incredible pipeline. The additional $300+ million in milestone payments down the road are just icing on the cake. All in all, things are looking great for Navidea. I’m expecting to see gains ahead.
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