Buying Nabi Biopharmaceuticals for below cash

Nabi Shares Plunge After Smoke-Cessation Drug Shown Ineffective in Study. The initial Phase III study for NicVAX is a double-blinded, placebo-controlled study comprised of approximately 1,000 patients. Both the company and investors are caught by surprise. Its sold off to 1.55, as I am writing now. It represents an unique opportunity to get paid to own an option on NicVAX.

Nabi has 108M cash and marketable securities on their balance sheet and about 35M in present value from remaining milestones and royalties from Fresenius Medical Care AG. At 1.55 per share, Nabi stock is traded at about 45% of the cash value. Nabi spend 5M per quarter on R&D and the majority of the spending is on NicVax. I don't expect Nabi to invest more capital on NicVax, unless there is significant chance of success. Raafat Fahim, President and Chief Executive said in the statement "the board of directors is actively evaluating any and all appropriate strategic alternative actions to preserve shareholder value, while management is working to further control the operational expenses of the company."