You know, when you get something wrong, it's important to admit it. I thought the Orexo/Abstral deal was $10 million, with royalties due on sales later. I was wrong. The total cost of the deal is $15 million, with the last $5 million payable no later than March of next year. So you can take the $5 million left on the credit line off the table in terms of financing general needs. This makes me even more sure an equity financing is coming!
Under the terms of the agreement, Galena Biopharma will pay Orexo $10 million upfront and $5 million within the first twelve months of closing, plus low double digit royalties and one-time milestone payments based on pre-specified net sales.
Galena has identified its commercialization management team towards a launch in the fourth quarter of 2013. To fund the acquisition and launch of Abstral, Galena plans to enter into a debt financing, subject to customary closing conditions. The term loan would include a total loan amount of $15 million, to be drawn in two tranches. Terms would include a coupon rate of approximately 7.59 percent and 4.5 percent warrant coverage. Interest-only payments would be due monthly through April 2014, then 30 months of amortization to maturity in 2016. The actual terms of the proposed debt financing may be different.
You guys must make a living around scaring investors out of their shares. Bringing up the word dilution over and over in 15 different ways and every 15 minutes scares weak investors. I am not one of those. This thing is cheap IMO. At what price do you plan on covering? Why are you here?
Notice, by the way, that the PR said, "To fund the acquisition and launch of Abstral, Galena plans to enter into a debt financing, subject to customary closing conditions." But the debt financing was for $15 million, which is the cost of the deal with Orexo. There's nothing left out of the debt financing to cover the cost of launching Abstral. So that cost has to come out of general funds. You do the math.