In today’s briefing:
- Probiotec (PBP AU): Trading Wide Ahead Of 29th May Shareholder Vote
- Probiotec (PBP AU): Scheme Vote on 29 May as Doubts on Pyridam’s Funding Linger
- Recce Pharmaceuticals – R&D advance (A$11.18m) extends runway
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Probiotec (PBP AU): Trading Wide Ahead Of 29th May Shareholder Vote
- On the 22 December 2023, drugs maker/packager group Probiotec Ltd (PBP AU) entered into a Scheme with Indonesia’s Pyridam Farma (PYFA IJ).
- Pyridam is offering Probiotec shareholders A$3.00/share (in cash, or a 19% premium to the undisturbed price). An interim dividend of A$0.035/share was also added (now gone ex).
- The Scheme Booklet is now out. The Scheme Meeting will be held on the 29th May. The IE says terms are fair. I agree. Trading wide. Gross spread is 4.9%.
Probiotec (PBP AU): Scheme Vote on 29 May as Doubts on Pyridam’s Funding Linger
- The Probiotec Ltd (PBP AU) IE considers Pyridam Farma (PYFA IJ)’s A$3.00 offer fair and reasonable as it is within its A$2.79-A$3.28 per share valuation range.
- The scheme remains conditional on shareholders’ (Probiotec and Pyridam), FIRB, and OJK approvals. Probiotec can also pay a permitted dividend of up to A$0.04 per share.
- The gross spread of 4.9% (6.3% including dividends) reflects doubts about Pyridam’s funding credibility, as Pyridam’s market cap is 16% of Probiotec’s implied by the offer.
Recce Pharmaceuticals – R&D advance (A$11.18m) extends runway
Recce Pharmaceuticals recently received A$11.18m as an R&D advance credit through an arrangement with Endpoints Capital for the R&D tax credit rebates that Recce expects to receive for FY23/FY24 and FY25. We believe this non-dilutive source of funding should extend Recce’s operating runway into FY25. Recce is also continuing to advance its intravenous (IV) R327 formulation in its ongoing Phase I/II study in healthy volunteers, having recently started the 20-minute (3,000mg) dosing cohort. We have made minor adjustments to our valuation and we now obtain a risk-adjusted net present value (rNPV) of A$644.4m (or A$3.16/share), versus A$652.6m previously.