shipbuilder, the cash collected by the ATM will have TWO and ONLY TWO goals.
Depending on the income(Avid)/Burn rate balance PPHM may, since they are currently not yet profitable, have to raise money to keep aligned with the new regulation requiring them to have a certain amount of operational autonomy (read- cash to keep things going if NO OTHER cash could be raise anymore) for a certain amount of time. This avoids going concern.
The second reason is indeed to sponsor new investments and make the difference in cash needed.
The first reason is no problem because the cash they raise within that goal can also be used. It is not that thye have to set it apart on a count they do not have to use.
The cash raised for investments is also no problem because they get a full equipped factory for it and as we know now, one based on their no 7 Award winning methods. The LEVERAGE is VERY high on that because PPHM/Avid announced they build these factories at 10% of the price that others build them. That is IMMEDIATE LEVERAGE because the value of a factory is not its building cost but the cost one would have to spend if he wants to build an equivalent factory. Furthermore the LEVERAGE isn't only in that but also in the revenue this factories will bring in. PPHM/Avid said they can produce GRAMS of substance in those factories where OTHER can only produce MILLI-GRAMS. That is a HUGE x1000 difference.
Furthermore the FORMULA has been proven because the AWARDS were won with AVid II and Avid III will even be an improvement of AVid II.
Last but not least all this leverages in that PPHM doesn't more and more in-house (an example is their distilled water facility where distilled water costs between 100K$ and 150K$). So the margin now goes in their pockets and they have LESS DEPENDENCE on 3rd parties which have caused problems in the past. In start-up the gross margin may be as low as 10% but we have seen that in normal operation mode (that is NOT the FDA test runs) it is near 50% (see statement of PPHM/PL on the subject). AND...THAT INCLUDES THE HIDDEN BAVITUXIMAB PRODUCTION COST.
SO the only leaking money at this time is the ATM cash raised to finance all the rest (Salaries of researchers, UTSW/NCCN/MSK sponsoring programs, Bavituximab production given for free for pre-clinical and clinical trials, participation/booths at events such as ACCR/ASCO/..., PR's, IP cost, etc). In a way these are investments that will/should yield in the future.
But the REAL GOOD NEWS is that PPHM/Avid announced to be profitable in a SUSTAINED WAY in, now, 14 months and that they consistently confirmed it during 3 consecutive quarters.
AVID SPUN AWAY FROM PPHM would be the "IDIOCY" of the century or the "SCAM" of the century. Avid generates income, give a strategic advantage and allows to full-fill FDA requirements related to drug production. It is an in terms UNIMPORTANT revenue generator as the main revenue will come from the exosome blood test, the PS-targeting applications and possibly other PS targeting related stuff.
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