I think it is a good indication of when there is a R/S on a company that is moving up. With institutional support, the price will go from there.
Dr Chan's response to a shareholder recently:
"As you are aware, we have been talking about this up-listing for some time, as a means to tip the supply-demand curve in our favor. Our goal was to do this when our story demonstrated sustainable growth with milestones in place that would not only support an up-listing, but ensure that we stay there. Our goal is to still up-list by the end of this year. That said, our last financing with institutional investors was heavily oversubscribed, and our raise was at the high end of what was allowable by our registration. We know that there is considerable institutional interest in our company, and our objective is to increase this level of interest going into an up-listing."
There is also the possibility of upfront cash with a partnership. Here is an example of one (see below):
AstraZeneca and Protherics Announce Late Stage Licensing Agreement On CytoFab™
Thursday, 8 December 2005
AstraZeneca today announced a global development and commercialisation agreement for Protherics anti-sepsis product CytoFab™. CytoFab™ is currently being prepared for a single phase III registration study in severe sepsis in line with guidance received at an end of phase II meeting with the US Food and Drug Administration (FDA).
AstraZeneca will be responsible for developing CytoFab™, an anti-TNF-alpha polyclonal antibody fragment (Fab) product, as a treatment for TNF-alpha mediated diseases in man, with an initial target indication of severe sepsis. Sepsis is a life-threatening condition resulting from uncontrolled severe infections which affects an estimated three million people a year worldwide. Under the terms of the agreement, AstraZeneca will undertake all clinical development work for CytoFab™ and Protherics will be primarily responsible for bulk drug manufacturing, including the supply of clinical trial material. The agreement will become effective upon the expiration of the Hart-Scott-Rodino waiting period in the US, which is anticipated early in 2006.
The agreement has a potential total deal value, excluding royalties, of approximately £195 million to Protherics, including an initial payment of £16.3 million. In addition, AstraZeneca will make a £7.5 million equity investment in Protherics to be paid in cash, at 68.24 pence per share, being a 30 percent premium to the average middle market closing price of Protherics shares over the three months prior to the date of the agreement. AstraZeneca will own approximately 4.3 percent of Protherics’ enlarged share capital.
Protherics will receive additional payments worth up to £171 million payable upon the achievement of milestones. A significant proportion of these payments are contingent on pre-approval milestones being achieved. There are no milestone payments related to sales performance. Protherics will also receive royalties on global product sales of 20 percent of net sales which reflect the late stage development status and market potential of CytoFab™. Protherics will also receive additional payments in return for the commercial supply of the product and will invest to expand its manufacturing capacity accordingly.
AstraZeneca plans to start the pivotal phase III study for CytoFab™ in the US and EU in 2007 following completion of improvements to the current manufacturing process. Protherics has previously demonstrated in a phase IIb study that CytoFab™ caused a marked reduction in TNF-alpha in the blood and lung tissues of patients with severe sepsis, and that patients required on average five days’ less mechanical ventilation than when treated with placebo. In addition, CytoFab™ showed an encouraging trend suggesting a survival benefit compared to placebo and a favourable side-effect profile.
Approximately one third of patients with severe sepsis die from major organ failure. Patients typically require mechanical ventilation and intensive care. There is only one product currently available for the treatment of severe sepsis and there remains a considerable unmet need for treatment of this life-threatening condition.
Dr John Patterson, Executive Director of Development, AstraZeneca, said: “ CytoFab™ is an exciting opportunity for AstraZeneca to extend its infection franchise. By working together with Protherics, we now have the opportunity to build on the excellent phase IIb data already generated. Our goal is to make CytoFab™ the standard of care for patients with sepsis, improving their chances of recovery and reducing their length of stay in intensive care. We hope it will provide clinicians with a new means of addressing this devastating condition and ultimately, help save lives.”
Dr Andrew Heath, Chief Executive of Protherics, said: “We are delighted to announce a major licensing deal with AstraZeneca for CytoFab™. AstraZeneca has proven to be a focused and agile partner and as one of the leading pharmaceutical companies in the world, it has the clinical, regulatory and marketing strength to maximize the potential of CytoFab™. ”
