Resolution of Rigel arbitration reduces uncertainty
Lighthouse | 1 March 2019
Trinity Delta view: The arbitration with Rigel Pharmaceuticals has been both an unnecessary distraction for management and an overhang on the share price. The resolution by the Arbitrators clarifies that the payments to Rigel on corporate actions, other than the sale of BerGenBio, would be reduced to reflect the amount of development work performed and would depend on the maturity of bemcentinib at the time of the transaction. Confirmation that there will be no additional payments to Rigel on an outright acquisition should also increase the attractiveness of BerGenBio as an acquisition target.
Although not a near-term consideration, we view the removal of this uncertainty positively. Our valuation of BerGenBio remains NOK3.14bn ($370m), or NOK57.45/share; however, this assumes a full 35% potential royalty to Rigel (this would be reduced by an amount to be determined at the point of any transaction), and excludes any consideration of bemcentinib potential in fibrosis.
1 March 2019
BerGenBio is a clinical-stage, drug development company based in Bergen, Norway and Oxford, UK. It is developing innovative anti-cancer therapies that act on the promising Axl signalling pathway. The lead oncology compound, bemcentinib, is in a number of Phase II trials.
Mick Cooper PhD
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