Mojo
It is strategically smart to keep up corporate financial strength while negotiating as demonstrated by INHX and I also agree completely that a partnership is needed. For PPHM to even think of going it alone in the present biotech universe is close to absurd.
That having been said, there are alternatives to stale, brain dead thinking by mgmt and BOD. As far as the ATM goes, it is really PPHM's problem not Roth's. IMO PPHM management has their head in the sand. There are a number of apologists on this board that suggest silly things like PPHM is preserving the value of the IP while diluting at 10% of the present discounted value risk adjusted. If the ATM were the only way of financing that would be one thing. However, there are many alternatives. Consider the fact that Avid is throwing off at least 8mm/ year in free cash flow. PPHM could leverage that cash flow for 50-80mm and, if necessary, collateralize with the assets of Avid. They would not have to encumber IP or the mother ship. The cash flow at Avid is growing so PPHM is well able to service the debt. Wouldn't it be better to leverage a segregated asset than to sell large percentages of the whole company?? Wouldn't it be better to make an earlier stage deal or a regional deal for less than top dollar on part of the IP than to dilute 100% of the company?? Of course it would. PPHM mgmt is stubbornly clinging to a poor strategy. Worse, it is a self defeating strategy as far as market value for additional financing.
In this area we are in agreement.
Let's hope that if any meeting with Roth is about more than just sponsorship or client introduction, it has some more creative thinking and approach to financing. The only justification for another short term financial fix would be if mgmt had a deal in hand.
This is just a suggestion (one of many alternatives) that I would like the BOD to consider and IMO only, so, unnecessary for all the negs to state how mgmt can never change. I am well aware of the track record.
Regards,
RRdog
