Biotech Values

[DewDiligence]

IDIX – This financing deal is hardly surprising. In #msg-39717323, which is the latest ReadMeFirst entry on liquidity and cash usage, I said:

…IDIX is in no immediate need to raise cash, but a financing transaction during 2009 seems likely if a new partnership deal with upfront cash has not been inked.

The terms of today’s financing are mediocre, IMO, but not awful:

• An 11.5% expansion in the fully-diluted share count for valuation purposes (see #msg-37350098), which brings the new figure to about 70M shares.

• A 14.9% discount to the market price at yesterday’s close.

• No attached warrants, in contrast to most financing deals for small-cap biotechs (e.g. yesterday’s ONTY transaction, which included both a discounted share price and warrants).

At the closing of the new financing, IDIX will have about $68M* in cash, which is enough to cover about five quarters of cash burn. Thus, it’s unlikely that additional financing will be needed during 2009 and the first half of 2010.

*$51.7M at 6/30/09 plus $21.2M in net proceeds from the new financing, less an estimated $5M burned from operations since 6/30/09.