At this time of year there's far too much noise to make a decent guess about investor sentiment direction.
As for the deal itself it is a good one for RGS. From memory RGS had ~2 Qs of cash before a cr was needed. The predatory nature of the market cuts this ~2 Qs to barely one because knowing a cr is imminent RGS is then shorted and pummeled with sell orders. The lowered sp makes for a more dilutive cr to raise the same amount of cash. (Look at RGS's float, it stands at ~208.9MM (I think we all know plenty of outfits with 1, even 1.5 Billion shares.))
Giving up 50% of the farm is stupid. However, as others have pointed out, it's 50% of the Japanese market for ONE product: Done. The Japanese market is huge, "represent[ing] the second largest national healthcare market in the world." NB: The markets NOT mentioned, eg. US (Holy Grail), EU (old and wealthy), UK (NHS), China (just HUGE).
Finally, note this hardly intangible binding stipulation, "AGC will be responsible for the costs associated with the manufacture of the trial product under certain conditions." All that is a headache and a cr unto itself. The value of having AGC do this in capital; with the burden on RGS management's time and resources removed; allows RGS to focus better on their relatively strong pipeline, while rapidly bringing Progenza to trial.
The demographic aging crisis, the stem cell space, health concerns, the full RGS pipeline, and possible osteoarthitic product extensions of Progenza have all yet to be factored into the potential sp (except by the holders here, and AGC).
OV
RGS Price at posting:
16.5¢ Sentiment: Buy Disclosure: Held
