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I'm Hopeful......on CNAT. Here's why. The first catalyst of NVS announcing an upfront payment for a partnership option in December took us to form a strong base in the low 5s where we now trade. Anticipation of the next component of NVS and CNAT, namely CNAT triggering the option with trial initiation took the price from the low 5s to the low 9s. With the secondary, we've backtracked to where we stood as we anticipated the option actually being exercised. I believe we advanced from the 5s to the 9s because the market valued affirmation of NVS partnering over and above simply an NVS option to partner. Will the market start to forget the secondary and instead start to value final affirmation of NVS partnering via news of regulatory approval and a 7M further payment sealing the deal? IMO, I think the market will do so. Since we've been told mid-summer, I wouldn't be surprised if by mid June, we will put the low 5s in the rear-view mirror for good. Finally, CNAT's financial position defends us putting in a solid financial footing (floor) soon. The market cap is 150M right now while the cash stands at about 95M. With the 7M coming and NVS bearing half the emricasan phase IIb costs, the market is surely giving a very minimal premium above CNAT's balance sheet position to emricasan while NVS is assigning big potential numbers to any emricasan favorable achievements during and after drug development. So, observing all that has occurred....NVS announcement drove the price in December to the low 5s....anticipation of trial initiation trigger drove the price further from early April to the 9s by very early May....I believe anticipation of deal finality with regulatory approval expected in mid summer will soon take us ahead again...after all, we already achieved and broke out from the current price level once on anticipation of seeing the deal done.....and yet, we still have one more leg to the deal actually being set in stone. I'm hopeful anticipation of that final layer will get the juices flowing here again, perhaps when everyone has fallen asleep again as was the case when the last big breakout occurred. JMO, Hopeful |
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