Written by ι Stock Market Media Group Staff — July 18, 2013
In a recently announced acquisition deal, Nuvilex, Inc. (OTCQB: NVLX), pulled off what can only be described as the steal of the century. The company was able to secure a deal that allowed it to “cherry-pick” the exact piece of the pie Nuvilex wanted from another company. And, what was the exact piece of the pie Nuvilex wanted – Bio Blue Bird AG (BBB) and more importantly, its worldwide licenses associated with the live-cell encapsulation platform technology to develop treatments for all cancer types – and that’s exactly what the company got.
In the deal, Nuvilex acquired all of the shares of BBB, a wholly-owned subsidiary of SG Austria Private Limited. As a result of this acquisition, BBB is now Nuvilex’s wholly-owned subsidiary. Stock Market Media Group, a full service investor relations firm focused on research, market awareness and content development, found this is a deal where Nuvilex and its shareholders win big, and quite frankly the move was pure genius and may prove to be worth billions of dollars.
BBB owns exclusive worldwide licenses associated with the live-cell encapsulation-based pancreatic cancer treatment that has been used in two independent Phase II clinical trials which produced results that are better than the current standard single-agent treatment (GEMZAR, also known as gemcitabine) for advanced, inoperable pancreatic cancer. These licenses include worldwide rights to utilize the live-cell encapsulation platform technology to develop treatments for any and all cancer types, regardless of the cell type encapsulated. As a result, the cells to be used for Nuvilex’s future pancreatic cancer trials are also protected by BBB’s worldwide exclusive license.
There are two key areas in this completed deal that highlight just what a steal this acquisition is for the company. The first is what this deal really means for the future of Nuvilex, and the second is just how well the company’s shareholders fared in the deal. What may have been lost in all the legal jargon in last week’s press release announcing the acquisition is that Nuvilex now controls the use of this technology as it relates to its use in any treatment, of any form of cancer, by any entity. This news alone could not only dramatically enhance Nuvilex’s pipeline, but could draw a number of big name pharmaceutical and biotech companies to Nuvilex’s door. The key, of course, is Nuvilex’s future Phase III pancreatic cancer trials.
If the data in the Phase III trials confirms what the company’s two independent Phase II trials showed, then Nuvilex could very well have their combined live-cell encapsulation/ifosfamide treatment become the standard treatment for advanced pancreatic cancer. If the Phase III trials prove successful, let the live-cell encapsulation platform technology phenomenon begin for all forms of cancer. Keep in mind the company has already seen significant positive results in studies using the technology for the treatment of spontaneously-occurring mammary cancer in dogs (an animal model system for breast cancer in humans). Successful Phase III human trials in advanced pancreatic cancer and a potential FDA approval of the use of the live-cell encapsulation technology as part of a treatment for that devastating disease could almost ensure Nuvilex’s phone will be ringing off the hook much like was the case for other companies when the stem cell phenomenon took off in the biotech industry.
It should be reemphasized that, to date, nearly $30 million has been spent on the two Phase II clinical studies in advanced pancreatic cancer and on other work designed to develop and “mature” the live-cell encapsulation technology to where it is today. This entire process, which has taken several years, has been done in a careful and methodical way – there was nothing haphazard about it. This has all resulted in a solid foundation upon which Nuvilex can build live-cell encapsulation-based treatments for a variety of cancers.
Shareholders have reason to celebrate the acquisition of BBB in many ways, but the price tag and Nuvilex’s announcement that it is returning 100 million common shares back to the company’s treasury is certainly immediate reason to be joyous. The funding to complete this acquisition was secured through the sale by the company to accredited investors of $1.5 million in restricted stock at $0.125 per share. The total purchase price for BBB was $1.5 million. Why was this deal consummated in this way at this time? – One can only invoke the long-used term “cash is king.” In addition, it should be noted that Nuvilex and SG Austria have developed, over the recent past, an excellent cooperative working relationship that, in the future, should prove advantageous for both companies.
In its original plan, Nuvilex had set aside 100 million common shares of its stock to negotiate a deal to acquire all of SG Austria and not just its former subsidiary, Bio Blue Bird. At today’s stock price, those 100 million shares would have cost Nuvilex around $13 million and added a great deal of dilution to current shareholder’s positions.
Dr. Robert Ryan, President and Chief Executive Officer at Nuvilex stated, “The modifications made in structuring this transaction resulted in a significant and beneficial event for the Company and its shareholders. We were also able to execute the transaction without transferring to SG Austria the 100 million shares initially held in escrow to complete the acquisition. The advantage to our shareholders is a reversal in what would have been an approximately 20% dilutive event of the total outstanding company stock if we would have acquired the SG Austria assets and personnel, as was originally contemplated.
Now, because we acquired 100% of the BBB equity, the subsidiary with the technology licenses and assets, and a 14.5% interest in SG Austria, the Company and our shareholders have realized a substantial non-dilutive net gain because the 100,000,000 shares have now been returned to the Company’s treasury. Additionally, we have avoided a significant increase in anticipated operating expenses that would have been associated with the original Asset Purchase Agreement, saving critical capital for use in preparing future clinical trials. The funding and subsequent acquisition has created the driving force and capability to immediately proceed with the preparations for the pancreatic cancer clinical trials.”