I have to clarify my earlier post: If the upfront money from a deal were only, say, $25MM, that would not be free cash flow to shareholders since that is conceivably the amount of additional development funds Cellceutix needs to fund trials for the next few years.
The point is that a small payment or small future dilution themselves are, from a finance perspective, equivalent. If you don't see this, keep in mind that the first $25MM in payment from a big pharmas is not 'free'. It is not a gift. It is in exchange for some value that will be extracted (from CTIX and hence from shareholders) in a future commercial deal, since it must go toward necessary development.
This is why I don't 'fear' future dilution. We have to get $25MM more in funds somewhere, and the market won't care if it is from a pharma company or new shares, and should we.
Now if the upfront money were $250MM, clearly $225M or so of those funds would be free cash flow to our shares, because that is above our foreseeable cash needs.
Btw, this is why the company's strategy is to enter into a partnership or issue shares as far into development as possible. The more we can demonstrate efficacy of our compounds, the lesser the future dilution or the richer the deals will be. This is better for shareholders and share price.
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