RespireRx Pharmaceuticals Inc (RSPI)

[neuroinv]

I've posted a fair amount about the 'crash' changing the dynamics of the partnering environment, especially vis-a-vis timing. It has slowed down. I'm still not a fan of a PIPE, but I am a pragmatist--and so is Cortex. I am dead certain they will not seek to tap that source first, but they'll tap it if they must.

The M&A principle--and dozens of CNS companies are trying this on for size: A company like Cortex, with two significant indications with POC--ADHD and RD--has a much better pipeline than a lot of its peers. Even dismissing high impacts completely, and in fact they are irrelevant right now. There are other companies, public and private, who have cash but lousy pipelines. There was a lot of debate at the recent meeting about whether one actually gets synergy from such a merger. It obviously is dilutive, and it can be problematic in terms of who is going to be in charge, and what is going to be prioritized. The pipeline poor companies don't always know that their pipelines are poor.

M&A is no panacea. The only dilution-free source of cash is a partnership with upfront cash. Anything else is dilutive. But cash via a merger can be 'cheaper' than a PIPE (no warrants).

But every company that has cash, particularly if they have more than say, eighteen months worth, right now is fielding more calls than they can count.

I'm still hoping for a partnership. But a small PIPE would not be the end of creation as we know it; a merger would in fact be, overall, more dilutive, though it could conceivably bring in more.

NeuroInvestment