James - I think your analysis is well thought out and represents a logical path Peregrine (and GILD) may follow.
Couple of thoughts to mix into the pathway and options you listed below;
1. GILD is a high suitor for the reasons you mentioned and, provided the root issue with Bavi and Sunrise is contained within the chemo trial, will likely attempt to strike a deal. A willing Peregrine needs to be on the other side of that negotiations table.
2. AZN may have more to gain with this acquisition. Owning a PDx and an upstream molecule allows you to profit internally (first to market with combo) and externally (further combos outside AZN). It would catapult the company to SOC quickly where now they're a distant 4th (non starter).
3. If any company has the Bavi molecule but does not have a PDx, IDO, CTLA4, etc., they will need to compete with those that have both a PDx and another downstream Checkpoint inhibitor. IO/IO combos with PDx and IDO or other will show 40% to 60% response rates and doubling + of standard MOS. What that means if you're, say, BMS, is that you're going to push and sell your combo. If Bavi + PDx delivers similar results (which are phenomenal), a company that owns a PDx and IDO has no reason to push an internal PDx (income) and external Bavi (no income) based combo.
#3 above is uni dimensional in it's view and the real world is much more complicated. There will be many more cross dependencies and synergistic interests etc. that will create collaborations and couplings we are not able to envision today. But the baseline principles will hold. There will be non-Bavi combos that will likely produce similar outcomes to Bavi combos, and owning both solutions will drive a company to sell more than owning one.
This, of course, does not address viral or other opportunities - but those are not sufficiently developed at this point to garner a valuation and look deserved by a near-term approval potential solution.
The pricing discussion is very reasonable as well and hopefully, if/when it materializes, will resemble an escalation based solution that includes a baseline (some share portion/percent) and premium layer that returns based on performance.
Best,
MH
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