HDGabor,
In my humble opinion, I have a hunch this is a result of the pharmakon loan. I had forgotten how aggressive the pay-back schedule became over time.
The fact is, even if we double our rx's, it appears we won't hit the $80M burn rate due to what will be rising interest expenses -- to the tune of close to $30M this year alone.
This means rx's need to go from 7k to (fill in the blank). I'd say 20k. Can we do it?
Now, the caveat is we have a "quarterly cap" option and can pay a percentage of revenue instead of the $8M/Q scheduled and push the remainder in the future (paying interest on interest). What's the % we pay? It's listed as *** on the 8-K.
*** is defined as:
CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE
SECURITIES EXCHANGE ACT OF 1934
Might anyone else know this number or is it a well-kept secret?
So why didn't they wait for Kowa? It appears amrn has accepted the fact it will pay the portion of revenue vs scheduled payment. It's possible Pharmakon forced the issue, recognizing amrn may not have the $ to pay them when the big pmts start kicking in based on the fact that large pmts to both them and the convertible guys would coincide.
Think about it.
You're logic is correct. It's hard for people to understand the cost because the raw number isn't staring them in the face. It's like an internal fee that looks puny on the surface but shocks you when broken out and valued over time.
In terms of communication, it could be two-fold.
1) They really are playing this by ear and hoping sales save the day before they have to make another big decision.
2) They are attempting to overcompensate for a previously boisterous guy (JZ) who certainly irked the legal dept and put the co. in harms way.
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