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Exactly!
Bradfordbros, you may have gotten me wrong. I still think that there is possibility that
A. IPIX made a purchase order which will take Aspire days to execute: "Dear Aspire, we need X million dollars. Please don't cry."
B. According to Purchase Agreement IPIX is obliged to provide Aspire immediately enough shares to cover the whole purchase order: "This should make you feel better. Here are the Y number of shares we think will be sufficient to get us that X million dollars. Now blow your nose and go to work."
C. Money starts to trickle back to IPIX.
10-Q uses the word 'proceedings' to describe the transaction. That's a tricky word and can mean a lump sum payment for 8 million shares or so far received payment from ongoing purchase of 8 million shares.
In any case, I think it would be beneficial to IPIX if Leo would provide clarification.
TIAB, dear brother in Boston area, you seem to ignore one crucial fact. CRO is running the show with prurisol. Leo is in about as naturally fertilized place with this as we are. What could he say that would make anybody feel better or more importantly improve share price: "I am so [long list of expletives] sorry, but that those dune humpers at [list of heavy expletives] CRO is making me [from the sulphurous guts of hell level expletives] mad."
Of course, you may assume that Leo has committed a crime and lied in PR and SEC filings. In that case I recommend you talk to some lawyers, preferably possessing more talent that those at Rosen.
Hi, LR, Its me, PP, annoying you, again. Not intentionally, believe me. I did read again the Purchase Agreements (2012 and 2015) and have concluded, in agreement with you, that Leo owes us at least an explanation about how the latest sale was constructed. But being me there seems to be always this: However, as far as I am able to tell 2017 version of the agreement has not been filed, but some changes from previous ones were incorporated in the September 2017 prospectus. I could not help but notice this new wording in the prospectus (underline is mine):
"The purchase price per Purchase Share pursuant to such VWAP Purchase Notice (the “VWAP Purchase Price”) shall be the lesser of the closing sale on the VWAP Purchase Date or 95% of the volume weighted average price for our common stock traded on (i) the VWAP Purchase Date if the aggregate shares to be purchased on that date does not exceed the VWAP Purchase Share Volume Maximum, or (ii) the portion of such business day until such time as the aggregate shares to be purchased will equal the VWAP Purchase Share Volume Maximum."
To me it looks like they modified agreement language to allow VWAP purchase notice covering multi-day buying execution by Aspire. But I may be wrong. However, if the modification allows such purchase orders Leo may have his hindquarters 'technically covered' because in the previous agreements there is this language about VWAP purchase orders:
"Each VWAP Purchase Notice must be accompanied by instructions to the Company’s Transfer Agent to immediately issue to the Buyer an amount of Common Stock equal to the VWAP Purchase Share Estimate, a good faith estimate by the Company of the number of Purchase Shares that the Buyer shall have the obligation to buy pursuant to the VWAP Purchase Notice"
What is your take on this? This stuff has given me a blistering headache. I go and convalesce now. For those interested in a good melee over financial legalese the links to relevant documents are just below:
2012 Agreement
2015 Agreement
2017 Prospectus
So, what kind of payment schedules from Aspire to IPIX are specified in the current agreement? Can you tell me, please? According to you, if one is not specified then it should not be considered. That logic leads to this: if none is specified none should be considered. Right? If that's is right, which seems to be your position, then we both should be quiet about this matter. I am agreeable to that.
So, you admit that specifics of payments to IPIX are left to be agreed between parties case by case basis. Somehow, you seems to regard this as unimportant.
Also, do you happen to dispute that the agreement specifies a multi-day purchase order by IPIX for which the actual average price per share can be determined only after the completion of the whole order. That sort of provides underlying 'mechanics' for my proposal.
How about this. Let's assume that the raising of $2M was done according the existing agreement. I am going to put some assumptions below.
1. IPIX needed around $2M for an unanticipated payment (either for unanticipated purpose or changed schedule of payment(s)). I am not going to speculate for what the money was needed. Only this: the monies were needed on tight timetable.
2. Aspire was/is able to sell no more than 200,000 shares per day without bringing the share price seriously down. I personally think that 200,000 is too high number for stable share price.
3. Assuming $ 0.40 average share price it would have taken the sale of 5 million shares over 25 business days to generate 2M$. Not good even for paying net30 bill in time. And this assuming that Aspire would have been able to to pull off over month long sale without going below $0.25 share price, which is doubtful.
What would be a solution that would still fall under the existing agreement?
I think this would:
Aspire agrees to forward IPIX $2M against the sale of 8 million shares. Shares to amount ratio is based on the bottom share price at which Aspire is obliged to provide purchase services in the current agreement. The actual 'purchase order' can be worded so that Aspire is to sell 8 million shares total at share price 'conserving' pace and Aspire will pay IPIX the proceedings above $2M forward payment as the sale of shares progresses. The numbers in the latest 10 Q would represent the factual situation as of early May 2018: IPIX had received $2M against the ongoing sale of 8 million shares.
I see nothing in the current agreement that would prevent this arrangement. Maybe others are smarter and do. Furthermore, if the arrangement complies with the current agreement (as I think it does) it does not require any new SEC filings before the coming quarterly report.
Also this: I think any honest and objective person should consider the above possibility as viable as any other unless somebody is able to prove that the above possibility is in violation of the existing agreement. For the hasty ones: saying that it is in violation does not count - needs a proof like a quote from the agreement that specifies how the payments to IPIX are to be made. So, before that proof shows up - good luck with your aspirations of taking IPIX to court.
Yes there would. It depends on the deal. I have explained this before but memory here seems to be on the short side (pun intended). The deal can be constructed so that
1. BP takes over further development and commercialization. IPIX get payments and there would be no need to make a deal with Evonik. One may think that this deal structure looks good for IPIX - money will flow in and IPIX is free to use it as it pleases. But think this - Payments to IPIX will happen on schedule that depends completely on the BP. It may re-target the development effort and go back to phase 1/2 trials --> no payments for a long, long time. And IPIX goes broke. If you think this is BS, check what is going on with CYTR.
2. BP provides funding and expert support. IPIX is responsible for development up to commercialization, at which point BP usually takes over. In this case a good portion of the payment schedule depends only on actions by IPIX.
Which one you would prefer, if you were in Leo's shoes?
Might happen. It looks like if Aspire was selling (a guess) it is done for the day. I am assuming (read: a big time guess) Aspire limits daily selling below 200,000 shares to preserve share price and by 11.30 am we had about 300,000 shares changing hands.
Nope, pissed because people seemed to assume that Aspire had sold all its shares. Which, considering the total volume and price action from April 1st to May 11th was a sheer impossibility. Also, I was expecting price going down today without any news - it usually does after a jump of the size we witnessed yesterday. Waves.
ffrol, I agree, especially with what you are saying about buying during the last few market days. There is new interest around.
No so smart, just pissed. And I did not say people here are dunces. I asked if there are any dunces around i.e. persons who believe that all shares traded between April 1 and last friday (effectively) originated from Aspire. A difference.
I honestly believe that Aspire is still holding a good pile of IPIX shares.
Occam's razor: simple answer is usually the best
Surprising how little math is practised around here - Between April 1, 2018 and May 15 2018 (that is yesterday, in case also calendar is bit too complicated to understand) grand total of 8,212,200 IPIX shares were traded.
What was the number of shares handed over to Aspire? Oh, it was 8 million. Does some nitwit here assume that all shares that changed hands between April 1 and yesterday were sold by Aspire? Hands up - there is dunce corner waiting.
No conspiracy necessary. Maybe Aspire took a break from selling and resumed today.
Does not need even that - just Aspire to resume selling the 8 million share batch, unless all selling since April 1st was by Aspire (and with all I mean every share that changed hands), which I doubt.
If the 'sale' to Aspire was done the way most around here think, meaning at fixed price of $ 0.25 for 8 M shares Aspire has a good reason to sit on the remaining shares - maximize its profits.
If, however, the 2 $M was just prepayment portion for the sales proceeds from per-agreement multi-day purchase order we may see Aspire resuming. Just my thinking.
Not really. See second paragraph in Plan of Distribution.
It looks to me like a multi-day purchase order to Aspire where each day purchase is limited by volume to 30 % of the day's market volume. Also pricing is specified based on daily market value. One would not know the final value or the average price per share before the whole transaction is completed.
IPIX needed, for some reason 2 M$ asap. (may even be payment to CRO, 10Q specifies MINIMUM commitment for 1 M$, billing may be more). I see two ways to get the money from Aspire:
1. Ex-agreement: Aspire buying 8 million shares at $ 0.25 per share.
2. Per-agreement: IPIX issues Aspire multi-day purchase order for 8 millions shares. Aspire forwards IPIX 2 M$ based on $ 0.25 share price floor. Difference to be settled when the purchase is completed by Aspire at some future date.
In both cases IPIX would factually report having received 2 M$ against the sale of 8 million shares by May 8, 2018.
Hopefully Leo will provide you a clarification.
Karin, the same agreement also seems to allow multi-day purchase orders where the final dollar amount or price per share will be known only after Aspire has purchased all shares in question. The volume and share price for each day's purchase seems to be calculated daily based on market volume and price on the day until the whole purchase is completed. That stuff is in VWAP paragraphs. It is convoluted enough to give me a headache - so I am not totally certain of my conclusions.
Then the question becomes how you report final price if the sale is not yet completed? Since April 1, 2018 total sales volume is about 7.5 million shares. There is no way to price all 8 million shares on that.
ffrol, I suspect that there is mechanism of action based on the Aspire agreement that made it possible for IPIX to get 2M$ very rapidly (as to why
- no clue). I also suspect that the said 2 M$ might not be the full final payment for those 8 million shares. But I tend to suspect many things present only in my febrile mind. Hence my nom de plume.
The way you put it it sound like there is an agreement and the wait is for official translation to legalese. Would be great.
'Strategic partnership' has been used to describe exactly what you are looking for, but also a subcontractor.
Evonik has formulation services. That puts a strange twist on things. Why not Evonik's formulation services? / Are they having additional negotiations with Evonik / Maybe Leo's entry in 10Q meant a partner in the sense you are defining it.
As the agreement is written it allows for some kind of reset - volume weighted price for batches over 200000 shares a day. I suspect, also, that no disclosure was needed because the transaction was covered by the agreement already made public.
Who knows what happened, but 5 million shares at 40 cents for 2 M$ would square with total dollars, time frame and 200000 shares per day constraint that is also in the agreement:
"we have the right, in our sole discretion, to present Aspire Capital with a purchase notice (each, a “Purchase Notice”) directing Aspire Capital to purchase up to 200,000 Purchase Shares per business day; however, no sale pursuant to such a Purchase Notice may exceed five hundred thousand dollars ($500,000) per business day, unless we and Aspire Capital mutually agree."
Of course, because Leo is such a nice man he could have gone financially extra deficient and propose super discounted big pile sale to Aspire instead of making them buy 200000 shares a day for 25 business days per agreement.
Noretreat, the share price is defined in the new current agreement as follows:
The purchase price per Purchase Share pursuant to such Purchase Notice (the “Purchase Price”) is the lower of:
(i) the lowest sale price for our common stock on the date of sale; or
(ii) the average of the three lowest closing sale prices for our common stock during the 12 consecutive business days ending on the business day immediately preceding the purchase date.
The applicable Purchase Price will be determined prior to delivery of any Purchase Notice.
LR, I did a little calculation based on two latest IPIX 10Q. Under the new agreement with Aspire
Sep 2017 - Dec 2017
6.6 million shares sold, 4.4 M$ received at average price of 0.67 per share. During the period IPIX market SP low was ~ 0.67.
Jan 2018 - March 2018
2.1 million shares sold, 1.3 M$ received at average price of 0.62 per share. During the period IPIX market SP low was ~ 0.50.
April 2018 - Now
8 million shares sold, 2 M$ received at average price of 0.25 per share. During the period IPIX market SP low was ~ 0.37.
I am starting to think like you: It does not add up.
Sheesh. I forgot the formulator. Thanks. And yes, I meant advisory services in licensing negotiations.
I see what you mean. Would you accept wordings:
'contractual obligation for services yet to be rendered' i.e submitting the freaking data with analysis (service) to IPIX
and
'contractual obligation for future financial advisory services'
BTW. Is a retainer as liability or contractual commitment in the books of a payer?
I disagree slightly. I don't think they were counting of deals being done that fast. I think they expected to be carried by prurisol results (better share price, less selling) until a deal was signed. Then came the monkey wrench.
Would also mean that the residual monetary obligation to CRO is less than it looks at first sight. Being a simpleton I can see only two reasons for selling 2 million worth of shares between now and April - they need to pay something and soon. It can either be
1. final payment to CRO
2. fees for financial advisory services.
3. combination of the above.
But what do I know.
I did not say or even hint to company being disingenuous. What I believe is that Leo & Co
1. expected to have prurisol results at hand during Q1 2018
2. they also expected and probably still expect those results to be good.
3. And finally, they expected that when prurisol results come out that piece of news will stop (maybe even reverse) the downward trend in share price.
Make any one of the above statements false (and that does not mean somebody is a crook. LOGICAL FALSE) and you have a good reason and actual need to sell a pile of company shares to Aspire during Q4 2017 and Q1 2018 at better price than they are getting now. One might say that not selling then would have been financially irresponsible and a solid proof of stupendous lack of foresight. Well, that selling did not happen.
Should we also assume that Leo is an idiot. I don't think so.
Lr, If IPIX is in partnership negotiations or even preparing for them, some of the contractual obligations may be new, presenting 'obligatory' advisory services.
Serious. It is obvious that IPIX management did not anticipate being in the situation where they are now. Otherwise Leo &Co would have sold shares to Aspire earlier and at better price. That means:
1. Leo & Co assumed that share price will hold up better than it has done. Why? Just because they are idiots? I don't think so.
2. Brilacidin news were all practically out by the end 2017. What was left? Prurisol p2b. It follows:
3. As far as the IPIX management knew late 2017 (what little they knew) prurisol was on track for Q1 2018 and they had reasons to believe that the results were going to be good. Had things gone down as excepted it probably would have hold share price steady if not moved it up. -->
They did not feel that there was a need to build a financial buffer at that time. If they had anticipated prurisol results being on the weak side or even this late there would have been heavier selling to Aspire during Q4 2017 and Q1 2018.
Just my thinking. And that does not mean that IPIX is not running out of money and time. Going to be a close call. Feel free to disagree.
Thanks, Amateur17, for stating things so clearly. This makes me a bit more optimistics about prurisol.
Great post, petemantx. I learned a few things. Thanks.
I did long time ago. I did some backtesting and came to conclusion that direction indicators in ADX combined with slightly off tuned fast stochastics and volume might be useful. I still use that stuff for swing trading. As to market, I guess you have heard that often told story about Mr. Market.
Sixpence, I recommend you do a following experiment.
1. Start a biotech company
2. Discover a drug and nurse it to phase 2
3. Submit a trial protocol to FDA (required for p2) and get a go ahead.
4. Then shit all over the protocol while running the trial.
Wait what happens.
BTW. Orexigen case actually enforces what I have been saying. But you already knew that. Didn't you?
Sorry, I did not understand that you asked me to comment if there was or was not an interim report.
It looks like there were plans for interim report, but was it done? I have said before that I do not see much point of doing interim analysis in short duration, smallish, phase 2 trials, because sufficient statistical power becomes available so late in trial that it renders an interim report near useless. Therefore these reports are very rarely seen (especially in psoriasis trials)- almost like Dodo bird, but not quite as extinct, more stupid, thou.
Scottsmith,
Let's start with FDA referring to both safety and efficacy reporting in part (c) of your post. Efficacy is there because in this document FDA does not make difference between blinded and open label trials.
Otherwise, this is my understanding:
Open label: continuous monitoring of safety and efficacy --> sponsor is aware of both in 'near real time', regardless if the trial is run by CRO or not.
Blinded trials - need data monitoring committee to monitor safety and possibly also efficacy. It is not given that DMC follows efficacy during a trial.
Double blind: subjects and investigators are blinded. - prurisol trial, reportedly.
Triple blind: data monitoring committee is also blinded.
Quadruple blind: data analysis is also blinded - group identities are revealed after analysis is done.
The above applies if a trial is run by CRO or not. But using CRO simplifies setting blinding up considerably. No sponsor mentioned in the definitions, not at all. THE POINT: in blinded trials the sponsor is ALWAYS blinded beyond getting event counts. The exception are pre-specified interim reports which usually serve as stop/go decision points - most of the time reports are very minimal - number of evaluated subjects, main efficacy measures with probabilities if even that.
I once listened Charles Link of NewLink Genetics getting aggravated with an analyst asking more info for certain cancer vaccine trial. CRO had only stop/go interim reporting responsibility and that was exactly what got reported: "No stopping rule met at xxx events - trial will continue". One analyst did not get it. Dr. Link explained the stopping rules. It was not enough. Finally the good doctor got flustered:" Look, we are as blind about this as you are. Do you get it!"
The same goes here, I think. So, did Leo get a peek? Not in his life!
Scottsmith, I am interested. What kind of data you think Leo might have seen?
'Being aware' is nice turn of the words, I admit. Still, no pharma co has resources to truly evaluate even 20 % of currently on-going research. Sometimes they don't have enough resources or smarts to properly evaluate even their own research (Gleevec wasting some years in a lab freezer comes to mind) Prove me wrong please, but not just with your 'reasonable' deductions. And having people to read publications does not count - that is called competitive intelligence and may count as 'being aware', and only that.
Fact: Prurisol phase 2a was not designed for statistical significance. It was dose ranging and 'trend' finding study using sPGA/IGA 0/1 with 2 point reduction as an indicator. 'Meeting primary' as you word it has significance only if the trial is designed for significance i.e. at least 80 % power for alpha 0.05. But you knew that already. Didn't you?
BTW: prurisol 2b has the statistical power of 80 % to reach alpha 0.05 with prurisol's PASI 75 rate at 32 % or higher, even if placebo's PASI 75 rate stays as high as 13 % as it was in p2a (historically on the high side). Meaning: prurisol's PASI 75 response rate does not need to go up with dose increase from 200 mg to 300 mg. It is enough for success if it stays the same. But having sufficient statistical power also means if prurisol fails in p2b then it is a failed drug (my opinion).
Fact: The only SAE, increased hepatic enzyme, was in 50 mg group - it happened at lowest dose - no indication of dose dependency. But you already knew that. Didn't you? That lone SAE in p2a gives SAE rate of 1.2 %. Otezla's SAE rate in Esteem 2 was 4.4 %. Did not piss off FDA. I guess prurisol has some room to grow its SAE rate. But you did know that one already. Didn't you?
There is nothing wrong of having an opinion that prurisol will fail (even I give failure about 30 to 40 % chance), but use 'reasonable' arguments to support your opinion. Misstatements are so juvenile and lazy.
Well done, indeed. Slcimmuno. Let's see what happens next.
Yes, it is true that prurisol is a prodrug of abacavir, a HIV drug. But that is missing the point. The active moiety of prurisol is not abacavir but prurisol or possible intermediate molecule between prurisol and abacavir (I am too lazy to check it now). Sixpence knows this. Also, it should be obvious that one can not patent old compounds - the legal concept of prior art prevents it. IPIX has a patent on prurisol. Sixpence knows this also.