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Message: Sometimes 1 + 1 = 3

The reason I voted for the split in the first place a few years ago was because of the theory of the royalty preferred shares (RPS) being a continuous revenue stream for Zenith shareholders. Some good tax advantages for doing this. The recent split with Zenith into ZCC and ZEL provides the opportunity for either additional revenue streams into ZCC (from ZEL and possibly sister companies in the future via RPS mechanisms) or leaves the opportunity to sell or list ZEL by itself. I'm OK with the explanation that DM gave at the time about RVX concentrating on CVD, Diabetes Mellitus, CKD and orphan indications and Zenith focused on oncology.

The two have operated "relatively" autonomously for the past few years, with specialists focusing on CVD in one and cancers in the other. To me, there's enough new science in the epigenetic "star factory" to go around for both companies. The oncology side requires certain understandings and expertise that may not be relevant to the CVD side. The folks working at the two companies, although both exploring BET and BRD, have somewhat different paths to follow. It also gives multiple opportunities to partner with big pharma in ways that perhaps a combined company might not be able to do.

In any event, my opinion at this time is to keep the current structures intact. Get both ZEL and RVX listed on Nasdaq. Get some big partners into this arena and both companies will do magnificently.

Now, if someone comes along with two cheques for $3-4Bn and wants to combine the companies, I can be persuaded to change my mind.

Here's hoping the reasons for the current runup will soon become clear. DYODD.

masila

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