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YM BioSciences, Inc. Ordinary S Message Board

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  • investormdpart2 investormdpart2 Mar 16, 2012 7:37 AM Flag

    $222 mil mkt cap and $135 mil in cash?

    Interesting points regarding problems, but I'm not sure I agree.

    I think the key to CYT is that they pioneered the JAK space including crystal structures. They also owned the foundation IP. Poor management and lack of funding can be a disaster for even the best science. Cytopia was private and probably well controlled by their VC's. When they ran out of cash the VC's couldn't put more in and didn't want dilution so they sold. All credit to YM for picking up an excellent asset on incredible terms. This happens all the time...especially in regions where there is not an over-abundance of new VC's to step in.

    I would say that not having enough cash to fund the Phase III is a big no-no in negotiations. You're going to get the best deal by having the ability to not do a deal. Gotta know when to hold em and know when to fold em. I don't think YM wants to do the Phase III, but if they don't have enough cash then how can they do the bluff in the first place. To hold em they needed cash. Besides, with the hand they're holding they should be playing hardball. I would have raised as well.

    Incyte is ahead with a candidate that basically makes anemia worse. That closes all kinds of doors for them and opens all kinds of doors for us. You're worrying about dilution before full phase II results, but I think you should be calling it funding before partnering. You don't partner without appropriate funding...not ever. Terrible terrible idea. You're going to drive a much better deal with funds on the balance sheet. Waiting until full phase II's means that you run the cash way down, hold off on partnering, start the Phase III without a partner (big no-no again) and basically screw things up. They had to raise...not having cash will kill good deal terms. Always.

    YM just did what the described as a hugely "oversubscribed" fund raise. We also know that Discovery Capital has just released that they own a 7.2% passive stake in YM. That's a huge chunk when you looks at groups like Baker Bros who are also holding giant positions.

    Here is my theory. Everything is about partnering right now. To get the best deal you need to be able to have the best negotiating position which means cash. Sucks to dilute, but it's needed. I would also say that you have a few really savvy group accumulating shares and a small number of retail investors who can't possibly move the needle. The larger groups know exactly how to keep YM in place while they accumulate shares. The only thing that moves these babies is news. And the only news anyone cares about is partnering. I don't think more positive anemia data is going to do much. We know that some of the data we're seeing was from patients with completely upset bone marrow. These patients don't become transfusion free by chance. It's really crazy data. Listen, I can understand being skeptical but it's not like this is coming out of third rate institutions. This data is coming out of the top medical schools and from a number of different sites. Something is working here according to the data I've seen. This isn't trivial stuff. Celgene got approval with a much less robust impact on the transfusion-free number. We could come down quite a bit and still beat what Celgene did. That's insane. I've been in this game forever. Since the days before Revlmid with Celgene. Seen this before...if YM's data is as good as it looks, then a partner is coming and all of this worry will be gone. The data has to hold of course, but all indications at this point are that it's holding.

    Anyway, as you said, everyone should do their own DD. These are my opinions as well and I think a healthy message board should have some open debate even between bulls.