Concert (NASDAQ:CNCE) recently "sold" their Cystic Fibrosis Potentiator candidate CTP-656, a deuterated Kalydeco (speculated to be a 1x daily version due to a differentiated PK profile), to Vertex (NASDAQ:VRTX) for up to $250mn in total compensation ($160mn in cash and up to $90mn in future milestone payments). Management announced on their recent earnings call that the cash payment would likely come as the deal closes by October 31st of this year, pending due diligence and shareholder approval.
A PRE 14A, or a filing for when a vote is required on a matter not related to M&A, has been filed and is up for review. A piece of the PRE 14A labeled "Background of the Asset Sale" is included, which is typical when a company needs a shareholder vote to sell an asset. These are also included in DEF 14A's when there are sales (proxy materials) and are typically my favorite thing to read when analyzing deals because you get to know if your speculations throughout the process were right or not, as the section is a chronological recitation of events leading to how an asset is sold. I've used this previously in my professional analyses to see if a sale was competitive or not, and this one doesn't disappoint! There is a major implication here that, when reading between the lines, could serve as a near-term catalyst for Concert Pharmaceuticals. This directly contradicts "The Value Investor's" overview that there are no short term catalysts so I really wanted to post it here. (love your work though!)
The Overview
Per the PRE 14A CTP-656 was announced in March 2015, with positive phase 1 data marketed in September 2015. Around the time of the positive data Concert entered into NDAs with seven different parties to discuss potential strategic relationships. (Seven?!) All discussions were preliminary at the
