CVRs heavily discounted in biopharma M&A deals: Data Byte

Contingent value rights have once again become a popular way to bridge the valuation gap in negotiations for biopharma M&A transactions, but public investors appear to place little value on them, according to a BioCentury analysis.

The day after a company proposes an acquisition, the market tends to value the shares of the takeout target similarly to the per-share price in the deal. When that deal contains a contingent value right (CVR), BioCentury finds the market value of the shares sits much closer to a deal’s price per share without the CVR than with it...