Nidan,
Thanks for your insight. (How did you copy and paste that section???)
This:
From the transcript. I lack the technical skills to cut and paste, as most are aware - powerwalker!, so I typed this section highlighting their playbook on small deals vs pricey later stage deals and how to explain the big numbers to their shareholders and what they look for in a competitive endgame (jonjones: “he’d be a fool to pigeon hole himself to one company”...exactly! They know it too!)
Here’s how it would work (I cobbled this together with poor dictation, poorer typing, compounded upon their already poor voice to text - I corrected some of their obvious errors, left some in, probably added a few, Capitalized my trigger words, phrases, ideas, and added touch of commentary (you’ll know it). I think it all still makes sense in the final reading.
Also, note: I have been assured that this planned strategy does not apply to Anavex (by a couple of illustrious but diligent message board contributors who are “in the know”) because we are NOT EVEN ON THEIR RADAR!
The thing is: off the top of my head, I can’t think of any other AD drugs in later stages...which are not BP’s and therefore might provide them their desired arbitrage values of commercialization, manufacturing, financing, needs faced by our sigma 1 receptor agonist, which could be something completely different you are looking at in 6 months or 12 months. Perhaps, I’m over reading?
And any large entity which has a promising AD candidate (has a mab, just like them) would never in a million years spin it off (if successful!) to another company - you can bet on it. The old saying “...or, I’ll eat my hat!”
So, here’s your peek at the playbook (it explains a lot if you look at it from the point of view of them wanting to have acquired us in the manner of the previous early stage model, and now, with AUSTRALIA/SPAIN, having to explain the new pricier deal to shareholders. 6-12 months...)
MATTHEW HARRISON Q:
OK great. And then second thing you talk about BD (Business Development) and maybe we can spend couple of minutes talking about some of those things. So I guess the question I get for investors a lot is you put up a big number at J.P. Morgan this year, $37 billion. And we’ve seen you do some transactions this year, but I think in investors’ eyes, most of them are early stage, excluding some of the stroke assets.
And so I guess, and maybe if we can just wait and sort of table and talk about stroke as a separate entity, but how are you thinking about deploying capital in later stage deals as opposed to early stage deals? And how are you - when investors bring up the fact that number is very big? How are you sort of offering them to contextualize? What you meant by talking about $37 billion number?
JEFFREY CAPELLO A:
Sure. So I think it cuts two different ways. I think we need to continue to be opportunistic to look at opportunities that are in the market that allow us to advance our leadership and our opportunities in neurology, and you will get an opportunity, like Ionis transaction, we put $1 billion and $500 million in stock and $500 million in other payments. That has given us the opportunity now to pretty much have exclusive rights to all the main neurological disorders using their ASO technology which is, I’ll remind you and everyone, that the ASO technology is the backbone of the SMA and we think it’s very promising in the neurological space. So a billion seems like a big number, but if you look at the $1 billion and it gives us access to the 50 targets, five per year that we can advance through the clinic, and they are more efficient, then we are kind of identifying a target through IND.
So it’s actually a pretty smart capital deployment strategy that allows us to accelerate a number of compounds early. Now that’s an earlier stage deal, but one we like a lot in the ASO space. (antisense oligonucleotide)
“We continue to look aggressively at the later stage kind of Phase III in commercial opportunities. The challenge there is those opportunities are obviously fairly priced. THOSE OPPORTUNITIES TEND TO BE LOOKED AT BY EVERYONE.”
“WE HAVE TO FIND SITUATIONS WHERE WE CAN FIND SOME TYPE OF ARBITRAGE VALUE, EITHER IN THE SCIENCE, THE COMMERCIAL APPROACH, THE MANUFACTURING APPROACH, OR IN THE FINANCIAL SIDE, WHERE THAT ASSET IS WORTH MORE TO OUR SHAREHOLDERS THAN IT IS TO THE EXISTING SHAREHOLDERS AFTER WE PAY THEM A PREMIUM. (HOOOOOOOLD LOOOOONGS!)
And those deals AT THEIR LATER STAGE TEND TO BE VERY PRICEY. So we’re very disciplined, WE ARE RUNNING HARD IN THAT SPACE, AND HOPE TO GET SOMETHING DONE (!), But we’re going to be disciplined and we’ve got to be smart about how we do it.
And one thing I’ve learned over my career is what you’ve seen in front of you today is not necessarily what will be in front of you in 6 months or 12 months. It could be larger companies that decide to spin-off asset. So being in a position where we are AMPLY CAPITALIZED and we have a LOT OF FLEXIBILITY puts us in a good situation. And we’re going to be AGGRESSIVE looking at them but we’re going to be PATIENT and we’re going to be — we’ll make the right decision for shareholders.”
This section speaks volumes, in my opinion.
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