Given the timing of the Transgene CR announcement, I'd be...

Given the timing of the Transgene CR announcement, I'd be inclined to reduce the estimated probability of Novartis exercising its TG4010 commercialization option from 80pc to 50pc.

Novartis is due to announce a decision next month - after March 27, date the new Transgene shares will be listed.

If Novartis says yes it will be obliged to pay Transgene $A1.1 billion. But this wouldn't be transferred into Transgene's bank account on one day.

It would be paid in instalments, the first probably $A80m-$A85m.

As a result, Transgene would pay Virax in instalments.

And, as we know from the Virax prospectus and the half yearly report released well after Friday's trading close, the first $8m or so will go to the Virax Creditors Trust and the TG4010m inventors, ANU and CSIRO.

What if Novartis says no? I would expect VHL shares to drop 20pc-25pc.

This would present an excellent buying opportunity.

For it is very likely that Transgene will quickly apply Plan B by announcing a Novartis replacement.

The speculation as to the identity of this replacement would presumably start with Sanofi which, like Transgene, is based in France.

Novartis is based in Switzerland.

Of course, Transgene and Sanofi appear to be close collaborators, joining in a 50/50 venture to build a plant in the Lyon pharma hub to manufacture a range of vaccines including TG4010.

Sanofi is a pharma goliath. Not as big as Novartis but big. It has a market cap of $A150 billion. Transgene's MC is a modest $A650m. Virax's MC is a humble $7.7m.

In trying to assess VHL's worth, I've tracked back to March 11, 2010 when Transgene first announced it's option deal with Novartis.

The response was swift and dramatic. VHL shares climbed 40pc to peak 0f $0.151, giving a market cap of $30m.

Shares then began to slide, a slide that culminated in the company's collapse after Roche withdrew from a deal with Transgene to develop TG 4001, a VHL-sourced head/neck cancer drug.

Now, the resuscitated VHL market has stabilized around $0.014-$0.015 as investors await an announcement re Virax's IP review.

Some speculated there would be IP news in the half yearly report. There isn't.

It would now seem that Virax will make a full announcement after a meeting with the IP reviewer.

I would expect such a meeting to take place next week.