BML Capital Discloses its Views/Plans on ProPhase Labs
January 11, 2017 at 02:49 pm EST
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On January 11, 2017, BML Capital Management, LLC. announced that on January 9, 2017, ProPhase Labs, Inc. announced an agreement to sell the Cold-EEZE brand to Mylan for $50 million. BML Capital expressed its view that the price for the Cold-EEZE brand is fair and that the Board and management did a good job of monetizing the Company’s main asset. In addition, BML Capital expressed it concerns that the $50 million received would not flow through to shareholders. BML Capital stated that alternatively, if the entire Company had been sold for $50 million, which would include additional valuable assets such as an owned FDA approved manufacturing facility, owned headquarters building, and dietary supplement products, shareholders would receive $2.92 per share. BML Capital continued that this is nearly 40% more than the closing share price on January 10, 2017, the day after the transaction was announced. In addition, BML Capital stated that absent a formal agreement to provide liquidity to minority holders, or a change in the structure of the deal, BML Capital is concerned that minority holders will be left with an illiquid stock representing ownership of a money-losing business.
ProPhase Labs, Inc. is a biopharma, genomics, and diagnostics company. The Company provides whole genome sequencing solutions, while developing potential diagnostics and therapeutics in the fight against cancer. This includes a potentially life-saving cancer test focused on early detection of esophageal cancer and potential breakthrough cancer therapeutics with novel mechanisms of action. Its segments include diagnostic services and consumer products. The diagnostic services segment provides COVID-19 diagnostic information services to a broad range of customers in the United States, including health plans, third party payers and government organizations. The consumer products segment is engaged in the research, development, manufacture, distribution, marketing and sale of over-the-counter consumer healthcare products and dietary supplements in the United States and also provides personal genomics products and services. Its CLIA labs and diagnostic technology provide wellness solutions.