Here is the GOOD and the BAD.
This shelf offering is consistent with what should be done, and with what Dr.M has said. Here is why. THE GOOD
1) We have had enough money to fund the current trials and maintain THIS status quo. Consistent with what Dr.M has said. True. But Dr.M must see those days are coming to an end!
2) However, Anavex is about to move to the next stage, and needs more capital. Cant get a loan, no income, so sell stock, that is a major purpose of stock.
We cannot advance as a 20(?) employee company, with one financial person, no accounting dept, Dr.M going to ERP consortium meetings instead of an engineer, and a high school kid doing our website(maybe
Seriously, we will need an accounts
receivable group, a professional IT group, legal team, chemists, engineers, HR, a PR group and so on, just like the big boys. This shelf offering is because Dr.M realizes that in a few months we may be in the big leagues and need to be ready to play.
3) This offering has nothing to do with takeover, or partnership. Consistent with what Dr.M has said. The only partnership that Dr.M has been discussed is for distribution and MAYBE manufacturing. This is exactly the best path.
DISTRIBUTION: We do not have distribution networks, so we will need 'partners' for that. With positive AD results, we will be the most sought after company on earth.
We will not need any partner, except as Dr.M has discussed. These arrangements are usually simple, the distributing company gets a percentage of their sales. They will balk at providing a bundle of money to Anavex for the privilege of working with us. We wont need it anyhow.
MANUFACTURING: As Dr.M has done, contracted out manufacturing of current drug 2-73. This is not a partnership, but could develop more.
4) This has nothing to do with buyout. Period. THE BAD
1) Dilution. Yes this is dilution. But $250M hopefully can get us several steps closer to the $10B(?) company Dr.M has discussed. Then it will seem like a drop in the bucket.
In conclusion, if you believe Dr.M has been frugal, and a good manager, then this should be seen as good news, as he must see good news already, or expects it in the next 6 months.
If you think Dr.M is a liar, then you will see this as lifetime haircuts.
Also, I realize several MB contributors have come to some of these conclusions also. Hopefully, I have added to their contributions, and correlated their comments. I truly believe the MB collective wisdom is better for ALL the commentors, both positive and negative. And Xenas compiled DD is a great example of that.
Not trying to rival Bio here in length