Biotech Values

[tinkershaw]

I haven't figured it out what EXEL really intends to do after HRPC data, partner XL184, sell the company, go alone at least until XL184 in last line mHRPC phase III result? If the later, they certainly will need money. I don't know whether they will finance via debt or equity.

Exel is in the cat bird seat if this drug works. They have nearly a billion marketcap, which means they can easily do a secondary and raise $100-$150 million with no problem at all, they can partner out XL-184 indications for another 9 figures, they have $166 million in cash above and beyond that.

There is time for skepticism. I think the rapidity of the proposed clinical trials, given the realities and history of such claims is something to be skeptical about. But as for EXEL running out of money and not being able to profit from this drug is not one of them. Iffff, the drug works in any fashion like EXEL thinks it will (as they bet the whole company on it, and they did not have to) funding will not be a problem, finding a partner will not be a problem.

This is not a diabetic indication, or an HCV indication, where the FDA will require enormous clinical trials, and 5 plus years of trials. This is to treat walking dead people, who are in great pain and suffering, who have no really good medical option. They can get it to market by themselves, without a partner if they need to. Iffff, the drug works as they believe it does.

And if it does not work like they think it does (and you know what, we will know a heck of a lot more about this in February with 50 patients being reported, and many others with over a 4 month follow-up being reported) then it will bite the dust, the share price will collapse, and EXEL will salvage what it can.

The fact is, we will know by February, with a good degree of confidence, if this drug is really working (not certainty yet, but a good degree of confidence) whether or the original 19/20 data, and the companies decision to become the XL-184 company was worthwhile.

If the drug shows efficacy, the share price is going to have another substantial rise, and funding and financing and partnering (on Exel's terms - possibly do a deal like with VRTX, selling European rights and keeping domestic rights or something like that) are not going to be an issue.

So, sit back, lets see what February's results bring. They should prove very important. They can come back and show the original findings a fluke, ambiguous, or consistent. If consistent, the share price will rocket, if ambiguous, well most cancer agents are ambiguous, and if a fluke, it happens.

Tinker