Biodel Inc (NASDAQ:BIOD) has received a favorable recommendation from two leading institutional investors, in regard to the proposals made by the management, for vote during the company’s upcoming annual shareholder meeting. Glass, Lewis & Co. and Institutional Shareholder Services Inc, have requested BIOD shareholders to vote in favor of the management’s proposals, on October 24, 2016, at the annual meeting. It should be noted here that one of these proposals calls for the issuance of the company’s common stock, in its transaction with Albireo Limited.
The company had earlier proposed a transaction with Albireo, following a previously signed share exchange agreement, between the two entities. The agreement has already been approved by Biodel’s board of directors, unanimously. The management also noted that combining the two entities, through the issuance of shares of BIOD’s common stock would be in the best interest of the company, as well as its shareholders. The company has even asked the shareholders to view the detailed statement, from the two proxy voters, by contacting its proxy solicitor, Morrow Sodali.
Albireo is a company based in Japan and the news of its merger with Biodel has been helping BIOD record significant gains in the stock market. It is expected that once the merger is completed, the new entity would change its name and start trading under the symbol ALBO, using Albireo’s name.
Moreover, the movement of the stock has also been driven by news of the company meeting primary endpoints, in a phase-3 clinical trial. The trial involved BIOD’s lead candidate for chronic constipation, elobixibat. Although the trials had been conducted in Japan, the company plans to get the drug approved by the FDA, which would also provide a significant upside to the new entity. Analysts anticipate that Biodel would delay filing an application with the FDA, prior to closing the merger. It should be noted here that the two companies have expressed their desire to close the merger, during the 4Q2016.
Biodel Inc (NASDAQ:BIOD) gained 13.19% in terms of its share value, during the October 18 trading session, to close at $0.656 per share, after having a trade volume of 1.95 million.