Chistmas Thoughts
well, I know it's Christmas, but still had some thoughts that I wanted to share.
Was thinking about CORT and ICGN, that traded well below 1$ per share and still were able to raise money via stock offering. I mean...CORT and ICGN, go check the pipeline and tell me: if they were able to raise money through stock offering, why wasn't DOVP able to do the same? What went wrong?
Other than that there are 4 business days left to either announce a major partnership (the way Exelixis structured his one would be the best for the re-uptake drugs) or to announce a deal with debenture holders, before being forced into Ch.11. Usually when Ch.11 needs to be short, investment banks are hired long before and a deal (even a deal against shareholders) is announced quite some time before declaring Ch.11. It's working kinda different in here and it's hard to figure out why. I've done some modeling and I am still 99% convinced that if the Company gets into Ch.11 it might be dead for anyone in the medium term, either for current shareholders or for perspective shareholders (that's a personal point of view, of course). The cash burned in Ch.11 would be a real kill from any point of view, and it would take months to reshape the Company for the investment community. Plus the time lost for possible lucrative partnerships could well play against the recent biotech frenzy time.
So I somehow came up with the idea, reinforcing my initial thoughts, that a deal could still be striken before Jan. the 2nd, which is what most of current shareholders are hoping for. Luckily enough (for those who might be hiddenly accumulating), the deadline comes in just as the last days for tax selling approach.
Still if I try to evaluate the Company as for potential partnership deals, it's hard NOT to think that the Company could get as much as $ 120M in upfront payments by licensing all of its compounds in clinical stages, since in my opinion it could at least get:
15M out of DOV 102,677 for a.a. indication only;
35M out of DOV 21,947 and DOV 216,303 (same as Merck, though IMO they would rather split the two agreements now);
25M out of DOV Diltiazem;
45M out of Bicifadine for Chronic and Acute indications.
(The indication for OA or in any combination with ibuprofen remains a big if with much potential, though).
I believe these estimates might be conservative given the recent biotech frenzy, but they are also biased by the fact that DOVP possibly can't negotiate right now in a position of strenght since its liquidity problems.
Don't know why but 'till some days ago I thought DOVP could have partnered DOV 102,677 and DOV 21,947 together and then would have sold DOV 216,303 back to Merck, but then I kind of realized that Merck hasn't been very active with DOV 216,303 lately, so I am not too convinced of this either. Thoughts on this are welcomed.
Please note that it's quite a long time that DOVP doesnt' issue PR's, such as:
- final results of the bicifadine PII in OA;
- their meeting with the FDA for the scope and design of final bicifadine trials;
this makes me think and hope that perhaps they will issue a press release altogether when a final deal will be reached. But it puzzles me that they felt they need to put the very small details in place as for the original deal with Wyeth. I believe it all lies in here:
"DOV has the right to develop products incorporating the three compounds for the treatment of human diseases, disorders and conditions except for treatment of vasomotor symptoms in certain areas of women's health."
It seems to me that this gives public clarification on what you can and can't do with DOV 216,303 , ocinaplon and bicifadine. If they felt the need to seek clarification, perhaps someone asked for clarification on certain compounds' indications...it does make sense doesn't it?
Surely enough, there will be 4 long business days ahead for investors.
Anyhow these are just a few random thoughts, they are not a suggestion to buy or sell the stock, so please do your own research before making a decision.
