Arbutus, Burford Capital, and Cadiz with Chris DeMuth Jr.
Jan 30, 2025
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Chris DeMuth Jr., an insightful analyst and author from Sifting the World, discusses the intriguing investment potential in biotech and litigation funding. He highlights the promising outlook for Arbutus Biopharma, emphasizing the stock's potential boost from ongoing legal battles. DeMuth also shares why Burford Capital is more than just a litigation powerhouse. Additionally, he presents Cadiz as his top investment pick, addressing the pressing need for innovative water management solutions in California's challenging infrastructure landscape.
Arbutus Biopharma's litigation prospects against big pharmaceutical companies underscore the potential for massive revenue from COVID-19 technology royalties.
Burford Capital’s effective litigation funding strategy positions it to benefit significantly from the resolution of claims against the Argentine government.
Deep dives
Litigation Potential in Biotech
The podcast delves into the significant litigation prospects tied to early-stage biotech firms, particularly focusing on Arbutus Biopharma Corporation, valued at approximately $600 million. The host emphasizes that potential legal victories against pharmaceutical giants like Pfizer and Moderna could yield substantial revenue streams from royalties related to COVID-19 vaccine technologies. This scenario draws a parallel to the company's interconnection with Genavant and highlights the unpredictable nature of current valuations amidst forthcoming lawsuits. The strategic implications of these legal battles suggest that even without immediate results, the market could valuate the company multiple times its current cap if favorable outcomes are realized.
Burford Capital's Litigation Funding
Burford Capital is spotlighted for its litigation funding strategies, providing financial backing for potentially lucrative lawsuits. The company effectively analyzes legal cases, managing to capitalize on situations where plaintiffs require liquidity but possess valuable claims, such as those against Argentina over expropriated assets. The podcast discusses Burford's current successes and future expectations, particularly in light of Argentina's economic improvements and leadership changes. The speaker expresses optimism that these developments might lead to a favorable resolution for claims against the Argentine government, potentially resulting in significant financial returns.
M&A Activity and Market Dynamics
In the realm of mergers and acquisitions, the discussion highlights a positive outlook for increased deal-making activity in the upcoming years, particularly with regulatory shifts in the financial sector. The anticipated merger between Capital One and Discover Financial is presented as a key case, with expectations that it will secure regulatory approval due to the enhanced management profiles of both companies. Unlike previous administrations, the current regulatory environment is expected to favor M&A activity, having shifted from anti-deal sentiment to a more supportive stance. The speaker anticipates that this evolution will lead to a surge in deals, creating lucrative opportunities for investors in a more favorable market landscape.
Chris DeMuth Jr. shares what's special about Arbutus (2:00). Burford Capital - other than litigation, it's a great business (8:15). Why regulators shouldn't block Capital One/Discover deal (14:25). Cadiz, Chris' current top pick (21:30). This is an excerpt of a recent webinar.
