Navidea Biopharmaceuticals updated its prospectus on Monday afternoon to include 12.5M common shares owned by Platinum-Montaur Life Sciences, which are now available for resale on the open market. As Platinum has been acquiring shares at a discount since 2007, the fund may begin selling ahead of Lymphoseek’s PDUFA date in April, a binary event that could diminish value if Lymphoseek does not receive approval. We don’t expect an immediate sell, but as many shares owned by Platinum were acquired at less than $0.50, Platinum stands to see multifold returns if it sells at current share prices of $2.75, and would also avoid the risks associated with the upcoming PDUFA. Most analysts, however, expect Lymphoseek to receive approval following the recent New Drug Application acceptance by the FDA, and the question of NAVB’s value falls to the diagnostic’s market opportunity, which is widely contested.
Platinum has been a long-time backer of Navidea and has access to a considerable number of common shares, roughly 49M between convertible preferred shares and warrants. While profit-taking from the fund would put pressure on NAVB in the near-term, with so much riding on its larger collection of shares, we don’t anticipate large-scale selling.