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Friday, January 31, 2014

Interesting Ideas for CVR

I was searching around the other day and found an interesting Contingent Value Rights play. For those of you who are unaware of what that is, when a company is bought out sometimes the acquiring company will issue CVRs to the shareholders (these can be traded like any stock) which entitles the holder to receive a cash payment if certain criteria are met.

In this case, the CVR that I came across and personally really like is GCVRZ. This deals with Sanofi's acquisition of Genzyme and specifically Genzyme's drug Lemtrada. If Lemtrada meets certain sales milestones worldwide and via specific regions then shareholders will be eligible to receive cash payments. I am a big fan of this CVR because although the FDA made the bonehead move of rejecting Lemtrada, I believe in the potential for the drug. Also, with the CVRs trading at 40 cents, it might be a nice time to buy considering that should Lemtrada hit its milestones that the minimum payout would be around $1 per right.

For more information I recommend looking at a very interesting article on Lemtrada. 

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