Well the good thing is, I'm not selling anything..
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Posted On: 11/27/2019 1:25:19 PM
Well the good thing is, I'm not selling anything...just 'giving' my opinion for a possible reason for the extended delay. 
I don't see any reason for the potential partner to intentionally delay the deal....if anything the price may go up or a better offer come in for NASH and HIV. IMO $140M (assuming $90M upfront and milestone payments + $50M launch costs) is a pretty cheap price to pay for the risk / reward for US HIV. Quick math says the breakeven point for them is ~7,000 patients for ONE year (assuming $60k price, 70% profit and 50% of these net sales or $21,000/patient annually).....and that entire $140M is likely spread out over a year or more further reducing their risk.
Sure the broad terms and some/many details were worked out before, during and after the NBA and due diligence period....and yes CYDY hired Dr. Brendan Rae for business development back in the spring. Not sure where 11 weeks legal review you mention comes from, as the NBA 6 week mark was 10/24 (ish, because NP added a week). While it wasn't clear at that time that this was 'only' the DD period, I also didn't expect the legal review began mid-September when the 6-week NBA period was first announced. Based on what we know now, I wouldn't think the legal teams got fully involved prior to 10/24 after completion of the DD period. I 100% blame NP for setting the expectation that a deal would be announced by 10/24 or much sooner than now.
Regardless of our differing opinions for the delay, we both agree it is unneccessarily frustrating and that the deal is still on. Until then, I can only wish you and others a great Thanksgiving and we see what comes next!
I don't see any reason for the potential partner to intentionally delay the deal....if anything the price may go up or a better offer come in for NASH and HIV. IMO $140M (assuming $90M upfront and milestone payments + $50M launch costs) is a pretty cheap price to pay for the risk / reward for US HIV. Quick math says the breakeven point for them is ~7,000 patients for ONE year (assuming $60k price, 70% profit and 50% of these net sales or $21,000/patient annually).....and that entire $140M is likely spread out over a year or more further reducing their risk.
Sure the broad terms and some/many details were worked out before, during and after the NBA and due diligence period....and yes CYDY hired Dr. Brendan Rae for business development back in the spring. Not sure where 11 weeks legal review you mention comes from, as the NBA 6 week mark was 10/24 (ish, because NP added a week). While it wasn't clear at that time that this was 'only' the DD period, I also didn't expect the legal review began mid-September when the 6-week NBA period was first announced. Based on what we know now, I wouldn't think the legal teams got fully involved prior to 10/24 after completion of the DD period. I 100% blame NP for setting the expectation that a deal would be announced by 10/24 or much sooner than now.
Regardless of our differing opinions for the delay, we both agree it is unneccessarily frustrating and that the deal is still on. Until then, I can only wish you and others a great Thanksgiving and we see what comes next!
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