Back to top

Analyst Blog

Zacks Equity Research

Navidea Inks Deal to to Sell Lymphoseek to Cardinal Health

ATHX ANIK CAH

Trades from $3

Navidea Biopharmaceuticals, Inc announced that it has entered into a definitive agreement to sell its Lymphoseek product to Cardinal Health (CAH - Free Report) .

Lymphoseek is used for lymphatic mapping, lymph node biopsy and the diagnosis of metastatic spread to lymph nodes for the staging of cancer in North America. In exchange, Navidea will receive $80 million on closing of the deal, as well as $230 million of contingent consideration based on certain milestones through 2026, of which $20.1 million is guaranteed over the next three years.

Cardinal Health will license a portion of the acquired intellectual property back to Navidea to allow it to develop and sell new immunodiagnostic and immunotherapeutic products for specific purposes in North America. Outside North America, Navidea will continue to produce and sell Lymphoseek under a different brand name.

The transaction is expected to close in the first quarter of 2017, subject to customary conditions, including an approval from Navidea’s shareholders, applicable regulatory approvals and the absence of a material adverse effect.

We note that Navidea entered into a loan agreement with Capital Royalty Partners II LP (CRG) on May 8, 2015. In Apr 2016, Navidea received a notice from CRG which claimed that due to certain events of default, all of Navidea’s remaining obligations under the loan agreement were due and payable.

Therefore, the agreement with Cardinal Health will enable Navidea to extinguish the CRG debt and focus on its development efforts.

NAVIDEA BIOPHAR Price

 

Zacks Rank & Key Picks

Investors looking for a couple of favorably placed stocks in the health care sector may consider Anika Therapeutics (ANIK - Free Report) and Athersys, Inc (ATHX - Free Report) . Both of them sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Anika’s earnings estimates increased from $1.96 to $2.06 for 2016 and from $2.03 to $2.09 for 2017 over the last 30 days. The company posted a positive surprise in the four trailing quarters with an average beat of 33.14%. Its share price has gained 22.5% year to date.

Athersys’ loss estimates narrowed from 24 cents to 18 cents for 2016 and from 38 cents to 28 cents for 2017 over the last 60 days. The company posted a positive surprise in the four trailing quarters with an average beat of 110.52%. Its share price has gained 70% year to date.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>