Cash flow is important. I tend to think that it may not be a big problem.
I think that from a dilution potential the bigger threat is the ability of debt holders to convert to equity if/when the share price hits $2.86 (?). A worst case scenario (depending on the actual value of the debt, but assuming that it is equal to $140 million) might be that 52 million shares would be added.
This arrangement, to me, "builds in" a deterrent to reach the share price to trigger the event. Also, at the other end, the more "promising" the prospects look for Amarin over say the next year, the more likely the debt holders chose to convert.
Anybody with other comments/views?
This is just another case of a "dumb" financing decision imo.
Sadly, it looks as if the decision (most likely anticipated in early August ) has done little to increase or sustain the share price over the past week since it was made or announced formally.
Any thoughts on how to play AMRN and "read the tea leaves" over say the next six weeks, based on DEPO?
Unrelated to your question, there are/were (at least with Sanofi/Regeneron) some nasty side effects and other concerns that may warrant more scrutiny or an additional level of testing. The path to market may not be as clear as Eric Colman once suggested.
VERY strange that the article and so many references to it have "vaporized. Is there a guiding hand?
Follow twit exchange between AF and FS.
I'd suggest that the complexity has two aspects:
Cynically speaking, it's about covering their butts and "making sure" that it's "going to be OK with others".
Giving them a little more credit, while the "new new" science is not complex, the complexity may be related to what to do when the safety and efficacy data that drove a decision like with the ANCHOR SPA is subsequently "trumped" by even more recent data that suggests that the decision, based on the "old new" data was wrong. With the rapidly increasing speed of scientific and medical developments and the easier influx of data from other countries, this might be a growing problem in the future.
Depending on the details of the agreement, it could be even "juicier" for the Pharmakon guys. They might just sit back, collect their interest and watch the share price go to say $8 (or higher) for argument's sake and then decide to convert. They get cheap shares and then also pocket a bonus of ~$250 million. (Based on in this example: $8.00-$2.86= $5.14 X 52 million shares).
I'm disappointed. Buried in the details was the conversion rights of the Pharmakon loan. These guys get to convert their debt to equity at a share price of $2.86. IF things go well, this should happen but the addition of up to 52 million shares ($150 million/ $2.86) will severely dampen any jump in share price by about 30% (52 million/ 173 million).
Am I missing something?
I hope that you are correct. However, I think that the relative prices will have a bearing. Consumers may not mind paying out a couple of bucks more for Tom's (Colgate-Palmolive) products but may think twice when the amount involved for argument's sake is $150 a month extra for Vascepa (with no insurance coverage or coupons). It will be interesting.
Not exactly sure how I feel about a 1st Amendment solution. Yes, it would be a step forward (and better than nothing) but Amarin would still left with a fairly significant marketing challenge as few insurance companies would provide coverage for a drug that would not be "FDA approved". Keep this in mind.
Potential KOWA effect aside, Is that probable with next week being a holiday week? Also, with summer vacations, this might not get back on track/full steam ahead until mid-September?
Sadly, I'm concerned that the FDA has an agenda (I suspect to allow certain other companies into the market and to not let ours reach full potential). If this were just about the science, it should have been "game, set and match" by now.
Will we get more "delay" with the imminent decisions of Jenkins and Woodcock?
Swap out the *
I think this might be good!
Details to follow.
Article makes a good point. Perhaps in some instances, statins prevent,or limit, the kind of exercise that people need that might eliminate the need for the statins. All in all, potentially a downward negative cycle that might be broken with Vascepa.