India combo trial is a huge value driver.
Sunstar, I agree. My understanding is that the BPs who produce each of the three SOC chemo drugs are already asking for more dialogue with us.
Imagine the leverage SK will have in license negotiations if Bavi enhances all three chemo drugs. No BP can afford to let another BP get an exclusive that covers their own tumor indications. All of them will have to pay PPHM top dollar just to stay in the cancer game and not get taken out by the competition. As more Phase II data rolls in, the BP bidding war will get very fierce.
THERE’S NO WAY WE’LL SEE ANOTHER PIPE. The two most likely scenarios for raising cash in April/May to fund the Bavi Phase II trials are:
Scenario I. Cotara for brain cancer is licensed off. Why do you think SK went into the $600 million market value of GBM and the speed at which India can enroll 40 patients? We only have to treat 20 of the 40 patients to be in a position to license Cotara for GBM at a fair price that could fund all of the Bavi Phase II cancer and Phase II HCV trials and still leave plenty of free cash after that. We’re not going to get much more by waiting to complete the Cotara trial than we will by cutting a deal in Feb or March when the trial is one-third or one-half complete. But the leverage we would gain from being able to fund Phase II Cancer and HCV trials without further dilution is staggering.
Scenario II. The 1B data for HCV repeat dose and India combo patients will all be on the table by Jan. or Feb. At that time the Bavi story is not only ready to be told by major media, it’s also ready to be bought and resold by major investment banks. Before the IB data was on the table, a PIPE without commissions made more sense than a secondary offering by a major house. With efficacy data from 12 cancer combo patients and 24 HCV repeat dose patients, investment banks will trip over themselves to give us $40 million at $2.50/share for private placement shares they pump and resell at $5.00 six months later in a secondary offering.
Investment banks have analysts who can see clearly the intense bidding war that will emerge among the BPs for control of the different slices of the Bavi cancer market. There are huge investment banking fees to be made as this stock moves from $2 to $20. If the India trial goes well, there will be plenty of time in Feb, Mar. Apr. to close the right investment bank deal on the right terms.
If either the HCV or the India Ph 1B data comes in strong, or if the first 20 GBM patients go well, the days of the PIPE are over and our short friends will be hung out to dry.
