Opko Health Inc. (NYSE:OPK) and its CEO Dr. Philip Frost announced that they have added MABVAX THERAPEUTICS (OTCMKTS:MBVX) to their portfolios. Opko owns 8% of stake in Cocrystal Pharma Inc (OTCBB:COCP) with Frost owning a stake of 14.3%. The biotech firm share price has jumped 200% since February, and is second largest holding in Opko’s investment portfolio.
The significance
Holding firms invest in the securities of other firms all the time with an objective to enhance shareholder value. There are some hits as well as some misses, as with all forms of investments. But Opko has been on a strong growth path in this game particularly in the past few months that even some small deals fetches attention. Its latest decision both for Frost and Opko’s personal investment trust is to become a part of a $12 million private placement into MabVax. Indeed, its going to be a win-win deal for Cocrystal too.
The momentum
Apart from the sharp rise in Cocrystal share price, it is also helpful to understand the recent momentum in Opko’s share price after its past investment decision. While the company has its own pipeline potential candidates, most importantly Rayaldee which has concluded phase 3 studies and is on the verge of submitting an NDA, it is in fact Opko’s initial investments that have supported its most recent 75% jump since December. It is the investment of Opko and the guidance of Frost that is creating value for Cocrystal.
The deals
Last December, Opko announced a $570 million licensing agreement with Pfizer Inc. (NYSE:PFE) for its human growth hormone ‘hGH-CTP’, including a $295 million down payment from the company, and an additional $275 million in milestone payments. Since the announcement of the agreement with Pfizer, Opko’s market cap has jumped more than 75%, and it has brought strong gains for Cocrystal too.
