Biotech Values

[iwfal]

if the company were confident about trial result, they wouldn't have raised money; if the company were confident about FDA approval,

And how do most of those binaries turn out?

It's about managing risk. Even if you are sure about something 90% - not many things in biotech come close to 90% sure thing IMO - you still have to manage the 10% risk.

Based upon the answer to my first question I think it is reasonable to say that most companies aren't doing these kinds of offerings when they really believe that there is a 90% chance of the binary going their way. It is only what they SAY is their confidence. To Momenta's credit they haven't, so far as I know, trumpeted massive confidence followed by a belying offering.

Ok, that said, is 1% risk worth a secondary (yes, I know I am using the term incorrectly)? 5%? 10%? Not clear to me offhand what logic to use in deciding how much to ask for and at what risk level since risks are inherently driven by the worst case. But my guess is that they consider the risk more than 10%.