You're correct, the secondary at $30 was a bleak day for AGPH. However, Johnson et al. knew that they needed the cash to bring Viracept home, and we're all holding the issue today at $70 plus. Another sign that management has kept the company on course.
Why would they choose to do another follow-on now? First, let me say that I've pulled the concept out of thin air, that I've not talked to anyone relevant about such. However, I don't think it would be such a bad idea, even though cash on hand is sufficient for commercialization. Why? The name of the game right now in biotech is to capitalize on success, to grab big chunks of money while the grabbing is hot. AGPH now has this huge sales force, pushing a single product......... it may now be time to give them additional products to push, as GILD did with Roche and Roferon-A. The additional money would lend flexibility for licensing. Look at what VRTX did with their recent offering. Another $200 million, at this point, would provide tremendous flexibility for the business plan.
An alternative, of course, would be to do a Chiron-like deal for up to 49% of the company. I presume that this option has been discussed with at least two suitors, but it's presumption only.
Just a thought.......
Rick |
