It seems that VHL interprets the near 20pc lift in Transgene's share price when the company announced favorable Phase 2B results for TG-4010 on January 8, as indicating the market believes Novartis will exercise its option to commercialize the platform.
I still put the probability of Novartis going ahead at no more than 60pc.
The market may not fully appreciate that Novartis has another lung cancer candidate that it's fast tracking.
This may be a cheaper option than being obliged to pay Transgene $US1b plus.
What if Novartis says no?
VHL seems very confident that Transgene will find a replacement. Quickly.
The key thing is that - whatever Novartis decides - VHL sees independent Big Pharma affirmation of the excellence of its Co-X-GENE platform technologies.
This helps explain why smart-money VCs Millen, Hopper and de Kauwe are excitedly assembling in the VHL cockpit.
VHL Price at posting:
1.7¢ Sentiment: Buy Disclosure: Held
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