I read Investorxc's excellent email to Sunil and it really made me think. Why in the world would they dilute 20% just to raise 6 million dollars? Why wouldn't they take a lesser deal?
Say they did sign a deal in April. Would they have gotten 20 million dollars upfront? Probably not.. So, I wanted to see how much they would have needed to make it to FDA approval. They had 3.1 million in expenses in Q2. They probably had cash on hand to handle about 1 million of that, so they would need 2.1 million. For Q3, they had expenses of 3.8 million. They also mentioned that they had enough money to get them to March. At the time, they had about 6 million in cash. That would get them to March, but FDA approval, and more money from the partner, wasn't going to make it in time. So lets assume they would need another 1 million to get them from March to the end of April/early June.
That would mean that they need ~12 dollars to get them to FDA approval, and that would mean there is no room for any type of delay or mistake.
The question is: do you guys think a partner was willing to give them 12 million in April? What is 9 months worth of DD and "internal structuring" worth? If the deal came in April then it wasn't going to happen with Braeburn (they didn't exist). So, if a big player did offer money, were they certainly weren't offering the 15-20 million that Apple Tree offered.
The flip side is that we would probably had to dilute in early 2013. Do you guys think we could have gotten better terms? Probably, because any buyer would have known that FDA approval meant a payment. Also, the pps probably would have been higher (though that is assuming a lot for Titan).
What would the better option be (we also need to factor in that the terms of the deal wouldn't have been as good)? I'm torn and that is why I'm asking for opinions. I think it is an interesting topic. I thank Investorxc for mentioning it to Sunil!
Also, my numbers aren't exact, but they are close.
hey Pennycrap' What happened to Amarin' s (AMRN) 30.00 buyout or big partnership deal?
Multiple stellar Phase3 Studies.Estimated 1-7Billion dollar market for drug Vascepa,and still no deal got done before or after FDA approval.
Deals arent always made as one would expect.
Big Pharma was not beating down Titan's doors to make a deal.
Thankfully we at least have a sharp minded, risk taking Venture fund believing in Probuphine.
Nowak: It's difficult for me to #$%$ what management did and why and what the alternatives were without the influence of long term frustration and my personal bias based on self employment in a small privately owned unincorporated business. I'm very suspicious of what options may have been available to our management at any juncture. I don't claim any moral highground,but I never took others' dollars to start my business and can't even conceive of doing so and rewarding myself without some commensurate simultaneous reward to those from whom I took investment dollars.
I'm suspicious of management and its philosophy vis-a-vis its common shareholders and can't help but think that they might have turned down offers for the entire co.at so many dollars per share in order to stay employed while paying overhead while peddling piecemeal from country to country without a thorough evaluation of the cost effectiveness of doing so.
Assume an offer of $4.per share for the company. Then consider the value to Titan of each asset it owns world wide. Maybe there's a potential value of $40.per share for all applications. But the question arises at what annual cost to Titan shareholders. It took this management team 3 years at what cost, with what indebtedness to parlay Fanapt's surprise approval to this point reaching an intraday high of 2.49 in early 2010 and an intraday post NDA,license deal low of .97.
Look at the options available to top management for up to 5 years. At this point it takes a lot of faith to complete an equation that results in any appreciable permanent increase in the pps. Jr made the point that these people are scientists and not business CEOs,but we have a product with value.
I envy those who see the $20.,$30,$40 pps for approved opioid,pain,Parkinson's. I just can't see it. I see the absence of a complete well organized business entity with the capacity to market products in a retail world market at a profit. I see my principal chance for a return on my investment in a complete sale of all assets to one company.
Hey man, I get you. The story here has been disappointing, to say the least.
I'm sure they would have taken a $4 per share offer though. They have millions of options that would make them millionaires if we got $4 per share.
I'm here for Probuphine and I think they've handled it's development well (since i've been here). I know you've been here so much longer, but I can only look at it from my perspective. If they had done things better, I wouldn't have been here because the pps would have been so much higher!
Considering we have a 50 million dollar payment on the way, I don't think a 80 million dollar MC is appropriate. 20-30 dollars isn't appropriate, but neither is $1.
Beatle, I agree with you. However, I think that our pps will jump (or decline) in price, when we receive word on
1. Priority Review
2. Acceptance of our NDA
3. Approval of our Probuphine
4. Actual sales results on Probuphine. OR
5. A complete BUYOUT at any juncture along the way.
There are many ????? surrounding the Company, but, I still say that probuphine is a winner & will reward us handsomely for our patience at some point. GLTY
Sentiment: Strong Buy
Sunil couldn't get $20M upfront in April? Why is that? Other CEOs get more than that for preclinical drugs.
08/11: Array/Genentech: $28M + $685M milestones for a preclinical drug.
08/03: Acceleron/Celgene: $25M + $217M milestones + double digit royalties for preclinical drug.
07/07: Innant/BristolMyers: $35M + $465M milestones for a Phase 1 drug
06/14: pSivida/Pfizer: $2.3M + $20 after Phase 2 & take over development + $147M milestones + dd royal
03/30: Intercept/Dainippon: $15M + $300M milestones + dd royalties in Japan and China for P2 drug
03/17: FivePrime/HGSI: $50M + $445M milestones + unspecified royalty in US, Can & EU for early stge drg
03/03: Intracellular/Takeda: $500M development + $250M sales milestones + tiered royalty on preclinical
01/07: Xencor/Amgen: $75M after P2 completed & assume development+ $425M milestones + royalties
Tell us again why Sunil would have been unable to get $12M for a successfully completed P3 drug? $12M is lunch money. $12M is pocket change for big pharma.
BDSI's CEO got $45M a few weeks after its drug failed in trial instead of diluting shareholders.
Sunil couldn't get a deal on a successful P3 drug because he's mentally challenged? Is there any another explanation?
It seems obvious now (maybe it always was) that there was little to no serious interest in Probuphine and our management team is terrible. We can debate over the events of the past year (s), I keep things simple - the bottom line is that there seems to be very limited to zero interest/belief in Probuphine by a lot of very smart potential suitors who could have easily taken over Titan without breaking a sweat. At this point, I still give it 50/50 that I will lose my entire investment of 10+ years in this company but I will hold to the very end one way or another. I just hope it is over soon, I am really tired of this.
Probably had no shot of a deal at that time..commercial batch stability studies not completed at that time, and in fact was further delayed as you know..
CMC/Manufacturing part of NDA review process.
A CRL can be given if this part of the NDA package is faulty or incomplete.
This puts a potential partner in limbo in not knowing drug stability results and the delay effects timeline on a potential partner's decision.making.
Successfully completing the stability study at least on one batch before signing a deal, gave Titan more leverage.
They probably couldnt have made any deal in April and I am sure the Apple Tree deal was the best they could do.