My first response to seeing this--and it's early here--was unprintable, So was my second response. I'll say something about what it does and doesn't appear to mean, but I simply do not see why this financing had to be done now, prior to the IND filing, at such a poor price (more than a 20% discount from the previous day: 10-15% is not unusual, but this is ridiculous--plus warrants ...ugh). Clearly--the investors said the money might not be here if you don't take it--and if it were me, I would have walked away.
What it does NOT mean--so far as I know:
1) That the FDA has 'killed' CX717. That would be material, and would have been included in the PR.
2) That the IND is in trouble. Not that I can tell--Cortex would have been foolish to file in August, because if a vacation short-staffed FDA felt time pressured by the 30 day frame, they simply would respond --need more info--and then there is no clock. No reason to corner them, and one does want every aspect correct (and since Cortex relies on outside vendors for all sorts of manufacturing and preclinical work, it's not all under their control).
3) That a BP deal fell through. No. I kept posting that there was no BP deal. There will be--in four or five months.
What it does mean:
1) Stoll wants to put more money into the Ampakine backups, the high-impacts, and pushing that new respiratory depression indication. A worthy goal.
2) He wants to have enough cash on hand to have more flexibility in doing an inlicensing. IMHO, that is not a sufficient justification for the financing at this level.
3) Until the IND is filed, the Market is going to take this as indicating trouble.
4) Stoll will have enough cash to not be pressured into a BP deal. But that could have been done after the IND, IMHO.
Given that the number of fully-diluted shares has gone up about 16%, if I recall correctly, the price drop is excessive, particularly since Cortex now has roughly tripled its cash.
But I strongly disagree with the timing and terms of the financing--five months of cash on hand was not sufficient, but this had not yet reached crisis stage.
NeuroInvestment
