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Saturday, 04/15/2017 1:47:00 PM

Saturday, April 15, 2017 1:47:00 PM

Post# of 461946
funding by share sales- good option:
Either partnership or funding trials by selling shares
, could both be equally good ....in fact an argument can be made that selling shares is even better...
The only thing that matters, from a strictly financial point of view, to shareholders is what percentage of the future value of the business (say after phase 3 trials) your shares represent ....

Partner scenario:
I suspect a partner funding in AD will argue for 50% (and try to through in all of the other value in other indications like insomnia, PD, combo potential etc)... So what a partner would likely ask for would end up resulting in the company (and represented by your shares) having half of future value...
AVXL management would likely not hold the cards anymore with this scenario..

Share sale scenario:
Lets assume the worst case scenario with no grants (highly unlikely imo): and they have to issue another 15,000,000 shares at $6 for 90 mill... and the company has shown not only can they create great trial designs but they can do it in a very frugal nature ... The negative ones will say no way can they run a phase 3 trial on 90 m ... but the trial should be no more than 300 (with the great P300 IMO it could be much much lower) and I believe they will stay out of the highest cost trial jurisdiction (or run a smallish US arm).... Anyways in this share issue to finance example as current shareholders you would own 70% (with grants, which are likely, or a smaller trial, this percentage would go up significantly) of the future value (instead of 50% in the partnership example)...and still hold all the cards...

I think some significant, maybe even full trial overage, by grant will develop and jumping into a partnership likely would wipe out this potential... A partnership could be good, but also share issue could be better....There are a lot of unknowns but do not be rattled by the fee mongering of dilution coming talk... its really what percentage of the big pie your shares represent afterwards...
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