James - I think (stating the obvious again as that is my key skill set) that both options or any variation of the full or partial acquisition is possible.
Question to think about - why would either option be chosen and, conversely, why would the other not.
My opinion is - unformed..
There are a few reasons that keep me on the fence. But will mend the fence soon.
What happens with other pipeline items for Peregrine, should they sell. If the sale goes with Beta Bodies, then I would say full scale transfer of assets is what would make most sense. Peregrine will not be in the manufacturing business after some time, allowing for full scale development of the Bavi product and finally absorption of the company into GILD.
If Beta Bodies are to remain with Peregrine permanently, or with a different proof/timescale of acquisition (more likely scenario) - Peregrine would need to maintain some manufacturing capabilities for its own clinical and manufacturing scale up efforts.
Overall, I am not personally in favor (no one asked me yet - waiting by the phone and crunching on my nails :) of Peregrine keeping AVID for the sake of having a manufacturing capability (without a product portfolio). If they ever intend to look at chem/pharma/biotech manufacturing as an equally compelling line of business - they'd be waaay of the mark. High risk low reward from total revenue perspective if your foundation is focused on discovery/development/commercialization of product. Waste of time. But to be clear - only waste of time once they give up/sell their IP. Currently - it's the best thing they could have done to advance their platform.
So - why make either choice?
For GILD - having full control of Bavi but no control of AVID (other then collaborative contractual) is likely too high a risk. If they're paying the equivalent of multiple arms and legs and some organs into Bavi - more control will be desired. Or at least the internl capacity to augment manufacturing.
For Peregrine - see above. If Beta Bodies stay - makes sense to keep. Otherwise, it's a burden for little $$ (decent margins but mickey mouse revenues).
Summarizing - I think the entire thing goes if IP is sold (with contingencies) in it's entirety. Otherwise, with portions of IP remaining, AVID must stay to give Peregrine stability for maintaining course of research while helping commercialize and scale up Bavi. GILD are big boys (and girls) and will likely rely on Peregrine some for manufacturing Bavi, and work on technology Transfer to absorb some capacity in their own existing underutilized space or build a new one within 12-18 months.
Best,
MH
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