Well your book is probably wrong. I'll illustrate why offers for PPHM are not a static thing, and for that matter offers to Small Cap Biotechs in general.
For starters PPHM's business is not a static one. We have Cotara for brain Cancer in PIII approved ready to start with a partner, but Cotara is for ALL solid cancers.
So as it progressed over time it's investment cost and its value changed as we got PI, PII and finally interesting PIII approval with interim look-in and early trial stop possibility, Fast Track and US and Euro Orphan status. Certainly when the long term survivals became known the value changed again. Then comparing partnering Cotara which is at this moment restricted to Brain Cancer is a niche product, and expecting that it is a quick process is not the smartest thing to do. Certainly not in the light of what happened to PPHM in 2012 and the need to finance the company. This slows down everything.
But for Bavituximab it is even a completely different thing. It is like claiming you have land that holds a gold mine. In the beginning interested parties don't give much to partner because it isn't proven there is gold and all the digging still has to be done.
When some later you have a hole and provide some samples that hold some traces of gold the candidates may offer a little more because you did some digging but traces still isn't gold-mine grade. But you now are even more convinced that you have a gold mine so whatever they bid more, you levelled up your partnership price too.
In the next step you walk into artery of gold. Now your price goes up big time, but the candidates will say that the artery doesn't mean there is a gold mine on your land. In the back of their heads they know it doesn't really matter because they'll take the gold from the artery but it allows them to keep the offer low. You on the contrary are in "I told you!" mode.
Finally it looks like there is also silver, and some diamonds are found and the artery is getting larger and larger. The partnership candidates now start to regret they didn't jump on your initial order and they just hope you'll run out of money and will have to accept their offer any-ways. For there CEO's it is very hard to go back home and explain to the board why they didn't sign a contract with you at 100$ while now you ask 10000$ for exactly the same thing.
With Bavituximab it is exactly the same thing. First ONE condition (Breast) then it seems to work for others and you walk the FDA stairs from PI to PIII with another Fast Track granted, it seems to have applications in viral, in inflammatory, Digital Imaging, possibly even Alzheimer now, etc. The MOA gets better understood, it seems to be the ONLY upstream agent on the market, and improvement for MANY existing and also new anti-XYZ technology.
So wouldn't you think that the price gets UP as risk diminishes due to PPHM using our ATM money to pass the FDA approval, as the MOA gets better understood and Bavituximab's field of application broadens with time? Do you think that if you first asked for a 100 Milj upfront payment and now for 500 Milj a BP just swallows and says : OK!
By the way, that is why I always said that to a certain extend the ATM is not dilutive! As long as the money is leveraged. And now one would plead to give PPHM assets away or partner them quick & fast because it takes to long and in the process throw away that leverage that largely compensates money wise for the ATM dilution! That doesn't sound like a good dialogue to hold! First criticize the ATM and when one wants to get the maximum out of it and turn that into a win criticize that too!
So it is hard for the BP's, it is HARD because they see the missed opportunity and know PPHM was satisfied with getting 100 Milj$ up-front. And so, combined with the dose switching, parties leave the table and others came to the table. Others that think they can milk the cow better because a problem with it's milk was detected and assuming the cow will be happy to give it's milk thinking it may be sour anyway, while the partner know he can fix that.
Till past annual there were certain risks with the cow, but today the cow is in charge. Accusing King from not taking offers is simplistic. King, ES and the others try to get the MAXIMUM out of this, for them BUT at the same time for us.
I would be curious to see that if I made an offer on your house for 60% of its value that you would sell it to me because your concierge claims it would take to long to get a fair price. Right, it isn't his house, nor his money! In this PPHM case it is OUR money! Furthermore in your complete reasoning the words "fair offer" should have been key. But fair is a different thing depending on what side of the table you are sitting and what you know about Bavi's potential.
Sure King received offers! There is not even the beginning of a doubt about that. They don't even deny any more since the 24th FEB that Abbvie (ex Abbot Labs) was/has been sitting at the table. Man can we be glad that they didn't sign anything with what we know now about the MOA understanding. Possibly the dose switching did us a BIG favour, no matter how unfortunately that may have been for the time lost and no matter how strange that may sound as a statement!
So pls Mr King, ES, and friends TAKE ALL THE TIME YOU NEED TO DO IT RIGHT and get us the BEST PRICE for our shares!
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