Capital Point to profit from NeuroDerm Nasdaq offering

pharmaceuticals

NeuroDerm develops technology for subcutaneous delivery of drugs for treatment of Parkinson's Disease.

At the request of the Israel Securities Authority, holding company Capital Point Ltd. (TASE:CPTP) today published a clarification about its profit from the sale of its shares in pharmaceutical company Neuroderm(Nasdaq:NDRM), which is slated to hold its second Nasdaq offering soon. Founded in the Ofakim Hi-Tech Ventures incubator, which Capital Point owns, NeuroDerm held its IPO in November 2014. A week ago, the company published an announcement of its intention to hold a secondary offering on Nasdaq in the coming weeks.

Just before that, Capital Point sold two packets of shares in NeuroDerm: 300,000 shares at an average price of $15.65, and 166,000 shares at an average price of $16.50. Directly and through Ofakim, Capital Point will continue to own 9.5% of NeuroDerm, whose market cap is $252 million. Capital Point's proceeds from the sales total $7.4 million.

At the Security Authority's request, Capital Point states that not all of this sum will be listed in the company reports for the second quarter, slated for publication soon. The company already reported some profit in its 2014 annual reports and its first quarter reports, following a rise in the share price as of those dates (Capital Point lists the value of its holdings in NeuroDerm at their market value). The company's second quarter profit on the sale of NeuroDerm shares will be NIS 3.1 million on the sale of the first packet of shares and NIS 3.7 million on the second: a total of NIS 6.8 million. Capital Point will also post a profit on the rise in the value of the NeuroDerm shares it still holds.

Capital Point's own market cap is NIS 65 million. Its share price has lost 4% since NeuroDerm's IPO and the impressive rise in that company's share price, probably because the Capital Point share price already reflected a high potential value for the NeuroDerm share, and also because of changes in Capital Point's other business. NeuroDerm, which develops technology for subcutaneous delivery of drugs for treatment of Parkinson's Disease, has submitted a prospectus for raising $50 million more on Nasdaq. NeuroDerm raised $45 million in its IPO at a company value of $169 million, after money.

The NeuroDerm share has since climbed 50% to a market cap of $252 million. In its announcement, Capital Point said it still believed in NeuroDerm and its management, and regarded the company as a key asset. Capital Point stated that it would continue holding most of the NeuroDerm shares it initially had, but in view of its need for cash and its plans for making other investments, had decided to sell the shares in NeuroDerm in order to boost its liquidity. As of the end of the first quarter, Capital Point's NeuroDerm holdings accounted for 57% of its total assets, according to Capital Point's reports.

Published by Globes [online], Israel business news - www.globes-online.com - on July 9, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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