shire

Interesting announcement out today saying that Avexa have renegotiated their deal with Shire by issuing Shire with $5 million worth of new shares. They provide little additional detail, but do say that they believe this will result in "...a reduction of sales royalties and removal of future milestone payments." Think about that..... Shire have agreed to take additional equity in the company at its current share price while giving up milestone payments and royalties. What is in it for Shire? They are giving up longer term benefits in the form of royalties for more shares. One might interpret that to mean that Shire see the chance for a greater short term return on owning more shares directly. The benefit for Avexa of course is that they get the longer term benefits of reduced royalties etc. This smells very much like a takeover is in the wind (note the provision to hold the shares in escrow for 12mo unless there is a change of ownership). Avexa didn't have to make this deal and neither did Shire. The only way both parties come out of this a winner is if Avexa gets taken over soon! Time to buy!