Fair enough, and I respect your opinion. But a little transparency on your comparisons may change the calculus a bit.
- EXEL currently has two approved drugs, and my brief research indicates that they only collect milestones and royalties on sales due to partnerships. Their most recent 10-Q stated that they collected $225.4mm in total revenues for net income of $126.6mm for the three months ended 9/30/2018. Their current market cap is $6.4B. CYDY currently owns the majority (less small royalties to precursor companies) of all future cash flows. When you consider that the third party market reports on just HIV indications suggest potential annual revenues of (roughly) $1B on combo and $3-4B on mono, your comparison starts to make a stronger case than I believe you intended for a $10B+ market valuation. That's not even considering cancer. Who needs a buyout? Obviously I'm glossing over the need to get approval and market the drug effectively. I'm well aware of that, just comping EXEL against theoretical/potential future cash flows for CYDY.
- AVEO may be a better comparison for your purposes here, with an approved cancer therapy and a $257mm market cap. However, they're also engaged in several partnerships (I didn't look up the details...) and the drug is only approved in the European Economic Zone. Total revenue for the three months ended 9/30/2018? $2.5mm. Not to say that this isn't a decent comp in some ways, but their are details to consider.
Generally, I agree with you in terms of the value of the HIV franchise in the case of a buyout prior to full marketing. Of course, this (or a partnership) would have to happen prior to marketing since CYDY has no capacity to market the drug once approved. This is a reduction in leverage for CYDY, no doubt. I think where we truly differ in our assessments is the potential value of the cancer franchise. Understanding that premiums vary based on the playing field (e.g. CAR-T being hot for a time), cash flow is still king, and the potential cash flows from approval for cancer could be significant. Don't forget that colon trials are supposedly next. The indications are likely to continue expanding, since it acts on the mechanism of metastasis. I believe that mechanism to be fairly common across solid tumor cancers, though I'm no oncologist.
Do I think the very high end of your BO range is exceptionally likely? I don't know, a lot has to happen. The company lacks leverage since it can't currently operationalize any drug, which would make it dependent on multiple suitors to drive up a price. I have unresolved questions about the IP protection, although it doesn't keep me up at night and nobody has ever presented anything particularly troubling in this regard. And let's be real - we're sitting at $0.60/share, so all of this talk is meaningless until something happens to break the cycle we're in. But I think that it's completely reasonable to point out that based on value of future cash flows, which is ostensibly how a suitor would view an acquisition... your examples actually make a decent case for CYDY to be closer to the top of your range than the middle or bottom.
First things first, though. Let's break this financing cycle, and maybe we can start to see where an actual functioning market would value the company. That's all that matters at the end of the day - what someone will pay for it!
Which right now is $0.60 or so.
