$500M is low, remember that Humira sells 14B/yr so what's the value of a drug that potentially could match that. Additionally, the science behind Brilacidin is unmatched and BP will pay up once the risk of failure is diminished (on any of the drugs).
Within six months we'll either be in a world of hurt (all three platform drugs failing or we'll be on our way to the fabled 100x+ return). Could CTIX be the next CELG or 100B company? Personally, I think the potential is there. But much will be determined by Leo's goals. He may want to hang up the sneakers with a 10 figure payday but it would be better for us to have him to turn the company over to a young, capable team and ride this to the end. I'd be thrilled holding for the next decade or two if the end result leads to a 50-100B market cap. I don't think one must stretch too far to see that happen.
For example:
1) If the CTIX's balance sheet needs help (which it does) and trials are running longer than expected (which has been the case). It would make sense to do a small deal ASAP, perhaps out-of-the-country, for one indication (maybe B-OM in Europe or Asia). The deal could be very limited and not a lot of cash for a BP, say $10-30M up front and a single digit royalty. Or if P PIIb comes in positive (soon enough) sell the entire platform for 2-8B depending on results.
2) Use those funds to maximize the return on the remaining assets of Brilaciden and Kevetrin by expanding the formulations and indications. Both B and K could realistically be in 3-7 powered PII trials if CTIX had the funds and manpower.
3) If those subsequent trials prove out, I'd like to see CTIX merge with a BF, not just sell outright. This merger would be significant for wealth creation for CTIX owners and allow significant upside for the merged business. I think this strategy would maximize the long-term value of CTIX's assets by continuing to grow rather than just a quick payday.
In summary, instead of selling off assets for a total exit of 3-10B, go for the gold and try and build the next BP with an exit of 50B+.
It is hard to find deals that have as much upside and as little risk as CTIX. Most venture deals that have 100x possible returns fail (usually 9 out of 10) but CTIX is way past that in terms of progress. The only way CTIX fails is if it cannot fund operations before one of the drugs proves out (which I don't think is likely), but it is critical to get operating funds on the BS. I'm looking forward to the day when we get a PR announcing such a deal!
Either way, I think next year at this time CTIX will be a major player in the Bio-tech world and I have a significant bet on the table backing up my beliefs.
