RE: Partner31 Jan 2021 16:56
Good question that Lime . I suppose it would depend on what the deal is . At the moment we assume there are partnering deals on the table , but not at the amount Markku wants or thinks is good value , particularly as P2 results , if good , will add huge amounts of additional value to Clevegen . Thats why they have done their best to get to this point whilst holding100% ownership .
The benefit - If a large company bought the rights to Clevegen - it could mean huge upfront payment , along with royalities etc , and further payments if other milestones are hit . Everything derisked for Faron - SP goes up big time .
The disadvantage could be seen that they have given away some of the future profits of the drug , in which case franchising or licensing its use in different countries , or with different countries could be another route .
I really don't know that much , or can see what would be best for Faron .
What we do know is that they don't have much in the bank to take either therapy much further without raising funds or partnering up . Phase 2 results are what potential suitors are waiting for.
But recent discoveries on the soluble Clever-1 , and obviously very positive P2 data that is starting to emerge , are starting to put a few more noughts on the price tag .
Anyway - short answer it will be good for us as the SP will rerate . And then again if the same happens for Traumakine .
But if Markku is clever , he may try to raise further cash by licensing off use for one type of cancer with one company , or in one country , thus funding Faron to pursue the P3 trials on other cancers . Long term , that may give us shareholders a better deal , at the expense of an initial mega deal .
I'm rambling . I'm sure someone else better experienced in pharma deals can expand .
one example of a small pharma cutting a deal ...
One personal example was REDX - they were at 7-8p , then signed an initial deal that got them up to 25p , then a biggy that took them to 70p - see details below 4th August 2020
Redx signs out licensing agreement with AstraZeneca
· AstraZeneca granted exclusive global licence for the development and commercialisation of RXC006, a porcupine inhibitor, for fibrotic diseases
· Redx will receive up to $17 million in early payments between deal signature and the successful commencement of first clinical trial
· Redx will receive up to a further $360 million in development and commercial milestones, plus tiered royalties
The worst thing about this example - is that I bought some shares at 14p , then sold them at 7p . Possibly one of the worst trades ever made by humankind . I'f I'd waited about a month I'd have doubled my money - as it was I lost half . Reason I sold - boredom . So a good lesson in being patient lol