Thanks for the EpiCept RTO information, makingmoneynow. The report can be found at:

http://www.edisoninvestmentresearch.co.uk  (You have to register.)

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I made a post when this deal was announced that attempted to value the resulting company. This was a minimum valuation based on the EpiCept share price at the time of the announcement. I was correct in asserting that EpiCept was under stress. The resulting company is probably worth more than I calculated.

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Here is the text of that previous post.

 

Here are a few salient points and opinions about the EpiCept - Immune Pharmaceutical's deal. As you know, iCo owns 600,000 shares of Immune (+ 200,000 warrants).

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EpiCept (OTC:EPCT) looks to be a company in trouble and this deal with Immune is actually a reverse takeover (RTO). The company has, at last count, 84 million shares outstanding with various warrants and convertible preferred shares on its books. At 13¢ per share its current market cap is about $11,000,000 which would represent 22.5% of the market cap of the combined companies. If we use that market cap in our calculations then the value of the combined entity is about $50 million. Since iCo owns about 6% of Immune then the value of iCo's shares would be about 0.775 x 0.06 x $50,000,000 = $2.3 million.
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This value of iCo's piece of the new Immune company, $2.3 million, is about twice what iCo has booked those shares at $1.181,880. It's a nice profit, but I expect those shares to be worth more.
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The new Immune public company would have about 400 million shares outatanding after the deal so I would imagine that there will be a consolidation of shares. It wouldn't surprise me to see 1 share for 10 to 20 old shares, leaving somewhere between 20 million to 40 million shares outstanding. This would allow Immune to be cashed up and among other things, pay out iCo for ICO-008.
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I would expect the market to value the new Immune much higher than it has valued the troubled EpiCept. That could drive the value of iCo's share of Immune much higher than the $2.3 million calculated above. Add to that the value of completely buying out ICO-008 program from iCo and iCo should see substantial cash from the deal, upwards of $10 million, maybe more, not counting milestones.
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So, this puts that aspect of the iCo story very much in play. It's unfolding almost as expected. The RTO instead of an IPO makes a lot of sense due to reduced costs. I expect this deal to close very quickly due to certain dealines and issues with EPCT. I would also guess that the new company, after an immediate restructuring and renaming, will have capital already arranged and waiting. I suspect that we won't have to worry about cash next year at iCo. Good deal. Git 'er done!