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Discovery Laboratories Inc. Message Board

  • dutchboyprint dutchboyprint Feb 26, 2013 9:38 AM Flag

    The Value

    The euphoria over the financing seems to be fading. It has taken two weeks to turn the curve back down. I hope those that bought in because of the financing are able to extricate themselves before the losses become too large. Better they sell to foillow-on buyers would will then absorb their part of the loss before selling to their follow-on buyers.... collective losses.... nobody loses much but everybody loses a little.

    Why the downturn at all?
    Why not perpetually up from Feb 14th as a watershed day in DSCO???

    Maybe because cooler heads have had the opportunity to look at the financing and seen it for what it is. It gives an assessment of the long term value for DSCO's Surfaxin franchise.

    That is a harsh statement, but look at the facts. DSCO used all its assets, including the rights to Surfaxin, LS, Aerosurf, Affectair, the remaining patents, the super secret proprietary information on the Chrysalis Device.... substantially all DSCO's intellectual assets in exchange for $10 million in the beginning, and potentially (probably) $30 million total.

    Is that really the best deal DSCO could get for pledging all those assets? Enough money to last a little under 9 months??? DSCO knows what thea assets are worth. Deerfield isn't stupid. The deal they mutually arrived at was "You put up all your asstes and I'll loan you $30 million at 8.75%".

    How come the deal wasn't for $100 million, or $200 million.... or only a slice of the assets rather than all???

    Note that the current interest rate on Junk Bonds is around 6%. So how does DSCO's loan rate a "junk and a half bond"????

    DSCO's ability to partner is now relatively limited... becaus ethe asset the partner would be joining with may belong to someone else... who is not a party to the partnership. How much money would you be willing to put up in a partnership if the only asset the other party brought to the table was smoke???

    We have an answer.... the value of that asset is $30 million. It is writ large in the loan agreement.

    How many shares does DSCO have outstanding? wasn't it round about 43 million right now with another 30 to 35 promised already? What is $30 million divided by 43 million?

    There will be another pop when DSCO finally says they are launching Surfaxin. But it will result in the same parabolic arc...... because there is no money there for years and years, if ever.

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