Intellipharmaceutics International Inc. (IPCI)

[AngeloFoca]

I sent these 2 Well reasoned opinions over to Della Penna.

Hopefully they give it due consideration.

p.s. I'm in full agreement with the possible well reasoned solutions expressed here.

grill4thrills  
Wednesday, 08/02/17 02:41:52 PM
Re: vikinggames post# 29068
Post # of 29088 

Hey Vik, if Rexista studies are inexpensive and they feel they can penny pinch their way by on Focalin/Seroquel revenue and use just a little ATM, we probably won’t hear anything at all as they have been doing just that for months I believe.

IMHO it would be downright silly to do an offering here (not impossible, but silly). I say this simply based on the mathematics, whereas say they needed $5M to do complete required Rexista studies and maintain a sufficient cash balance for operations. They would probably have to sell 7M+ shares in order to raise just $5M at these levels after lowering the offer price to generate buyer interest, fees, etc. That’s roughly a 20-25% dilution for just $5M cash…

An alternative may be where they can give a partner say an extra 10% of Rexista profits for the upfront payment of $ 5-10M to help IPCI cross the finish line, which is chump change for big pharma and a good deal for someone to get in this space. I don’t know what those numbers would be, so move them anyway you want, but it would be in the best interest of the company & shareholder value to give up a little more in a partnership agreement than dilute at these prices (ie give up 10% of profits on 1 drug than dilute the company 20+%). It’s very straightforward, so I’m hoping a CFO understands this!

To be short here is simply betting that there is no partner at the table to help with cash concerns, and there is no further development on the ANDA front, which is unfortunately very plausible.

While the adcom surely made the outlook of Rexista look bleak, they were at least consistent voicing the need for safety studies, so if they can complete them and they are favorable… who knows! My best guess is the FDA will delay the PDUFA data if they are close on these studies rather than issue a CRL on Sept 26th. I’m not going to place a bet on that however, I’m just looking at the generic safety net, recognizing that the FDA is making strides on the ANDA front the last few months (average of 69 approvals per month the last 6 months vs just 51 approvals per month the 6 months prior).

To cover all options, let say the sell the rights to Focalin to PAR… let’s just round IPCI revenues to $5M, if PAR we’re to give just $ 30M for those rights, it’s merely a 6X earnings multiple for them since there is no added cost to PAR (which is beyond a great deal btw), and that better be enough cash to operate until more products are commercialized! Just saying… IPCI is undervalued, but unfortunately it is too easy for investors to see the risks at play as well. GLTY

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fred198484  
Wednesday, 08/02/17 03:04:34 PM
Re: vikinggames post# 29068
Post # of 29088 

The chances of an offering have to be low given the price of the stock. But they have to be high given the lack of cash. For IPCI, however, no cash is the norm and they seem to know how to get by. With revenues now flowing in due to Seroquel and Focalin sales, management likely feel things are better than they have ever been.

My best guess is there will not be any offerings until the share price is much higher. It could get much higher based on a possible partnership deal on Regbatin which the company has said it is looking to accomplish, a partnership deal with Rexista (I don't think the negative ADCOM results will prevent this since the panel so clearly lost its way and all knowledgeable parties know the drug is the best option for the patients) or new generics are soon approved/partnered (if not partnered already).

But if any of these things happen and the share price rebounds, I certainly expect a share offering. But it would have to recover a lot - I would think to at least $4 -$5 per share before any offering would be pursued. I could easily see how a Regbatin partnership alone could instantly change the whole complexion of the company in the eyes of investors and push the stock to the $4 - $5 range. Rexista's potential is impressive but Regbatin is even bigger.

I don't see them partnering PODRAS.

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