re:"Well it's still as negative regardless... You will receive 20% less than you would have before dilution of any market cap that the stock ends up reaching. "
Infinity minus 20% is still infinity. :)
OK. If everything Anavex has in the works comes to fruition, sky's the limit, but let's say new standard of care for just AD. What's that worth, market cap-wise? $5 billion?
One could say Anavex is like a gold mine. Of course investing in mining jrs is tricky as always as with jr biotech. But let me go with the mining analogy for a bit.
Let's say a gold explorer discovers gold and raises $100 million for diamond drilling and dilineates an ore body with $1 billion worth of gold in it. Having the drill cores analyzed to be NI 43-101 compliant is the mining equivalent of clinical testing. It establishes that it is not a scam. If the drill holes are 300 yards apart and hitting decent grades, it's pretty likely that the ore is contiguous. Reserves are categorized by confidence level which is why work continues to increase that.
So it's not a scam. The gold is there. Is the market cap of the gold miner now going to $1 billion. Well, the gold is not going to jump out of the ground on its own. So the would-be investor has to figure out, how much is it going to cost to dig the gold out? If it is going to cost $1 billion or more to get it, then its value is essentially zero. Forget it. Unless the price of gold goes up.
AD continues to be on the rise, more preditable than gold.
So, how much is it going to cost to get Anavex 2-73 to market? We need to subtract that from the $5 billion. It doesn't have to be spent all at once, indeed, pay-as-you-go is a prudent course and we seem to be getting a little help on the way. But to complain about a 20% whatever equity raise now is to assume bringing it to market from present at zero cost, that we can somehow have the full $5 billion with no further investment up front. That's a fallacy.
So, is it going to cost $1 billion more? That would be 20% of the projected $5 billion. No, it's 20% of our current market cap. If we need to raise another $100 million or whatever, $200 million, that would be $200 million to get $4.8 billion.
