Ayala Pharmaceuticals Inc (ADXS)

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Gantor,

My guess regarding a 50 to 100 million upfront payment is only for EU. But I think there's a good chance we won't see an EU-only deal for AXAL to begin with. A combined EU-US deal is more likely in my opinion and get a significantly higher upfront payment - north of 200 million, which should remove the market's dilution concerns going forward. If we mimic ADRO's Novartis deal, revenue sharing after this kind of upfront payment will be something like 55% BP and 45% ADXS. However, I do admit that I am being conservative here, given that we are in Phase 3 and have an SPA/ATMP.

Whether ADXS will sign away much more than 50-55% of future revenues in order to receive an even larger upfront payment - something like 500 million - will, I think, depend on whether management intends to sell the company in the near future using the higher SP floor resulting from an AXAL deal. In that case, we may get (who knows) the half billion upfront payment and agree to reduce our revenue sharing percentage to the teens.

We would still have ADXS-PSA, HER2 and HOT to strike deals for and a solid AXAL deal would greatly increase market anticipation for them. But I seriously doubt we would do any of those deals then. Management will simply use the higher floor (which I'm guessing would be in the mid 20s) resulting from the AXAL deal to negotiate a fair buyout for the entire company.

Let's hope these things happen, since this is all speculation anyway. All we can do is to hope that management uses partnerships/buyouts other good companies had made as guardrails to make our own.