Cytodyn Inc (CYDY)

[BlackDoggie]

Still have to bring it to market. The ideal is strong cancer data precipitating a very, very friendly partnership deal with BP. Which I think is the most likely outcome by far, despite my earlier questions about going it alone strategies.

But if I were CYDY's management right now... I'd be presenting Gilead with a take it or (permanently) leave it offer. Couple billion (maybe $3-5b) up front, they get the lion's share of HIV revenue (call it 70/30 for GILD), CYDY gets the lion's share of all other revenue (70/30 for CYDY). Tell them they have 48 hours, counterproposals or amendments will be considered outright rejections, and they'll never be negotiated with again after this offer. You're offering them the chance to save their HIV franchise - which they will otherwise lose the majority of - and likely get an all but free significant revenue stream on other indications (cancer, GvHD, maybe NASH?). Put their backs to the wall and soak them on the cancer revenue for better revenue split terms than the company would likely get elsewhere. They're over a barrel with the KITE acquisition falling apart and their late-stage NASH program failing. They'd have to pull the trigger. And even getting soaked on terms and with the up front money, it would be the best deal they've made in years. Plus, it would leave them cash to continue to pursue other pipeline options, rather than trying to buy CYDY outright and putting all of their eggs in one (damn good) basket.

GILD would hate it, but they'd take it, and the reality is that everyone would win.