As a news starved shareholder, I don't find this NR strange. Although I do agree with you, most LOI I have known, do not have enough meat that on the surface so it could appear strange. I did however, glean and learn a few new things from the NR.
1. this was issued out of New York ( Mr. Bruce Voss reports ) Usually, Rebecca's name is posted and NR coming out of toronto.
2. Rebecca is triggering a clause in an agreement with OXO (Dimethaid will have the option of acquiring)
3. one shareholder to deal with (representing 80% of Oxo Chemie, from its founder Dr. Friedrich Wilhelm Kuhne), this is very new info and good to learn. IMO OXO has always been dealing exclusively with DMX in a well structured long term plan. There was never any need for other private partners for support, financing, etc. ( "This is the culmination of the close working relationship we have established throughout the clinical development
of WF10) Of course, I don't pretend to know if they've ever tried looking elsewhere. I hope they did, but the evidence is that they did not have to.
4. IMO, they have the option of acquiring the remaining shares, meaning from 0 to 80% (Under the milestone-driven letter of intent) A smart arrangement that accounts for business risk.
5. DMX decides the mix and terms. Hopefully to optimize its current resources (which at the discretion of Dimethaid will be a cash or a non-cash transaction.) I would be inclined to agree with others that this can be negative dilution given the following scenario. Hypotheticaly, if Phase III turns out poor and DMX was forced to take some additional ownership with shares, then that's definitely dilution. But this is not how the NR is worded. I see it as a great investment and not dilution if in fact Phase III turns out great and the terms are in the existing shareholders' favor. I'll stick my neck out and say I trust Rebecca to do a good dd and negotiate good terms that do no hurt existing shareholders.
6. Expected to close 2Q. Now some speculation.
For more impact this could possibly coincide with other events such as:
a. annual meeting
b. publication of unblinded and analyzed report
c. following Wolf's speculating on a NAZ listing
d. enough time to allow people to come back from vacation so no one misses any of the excitement and sock away more shares, ie HC, the Chief, Wily? <gg>
e. enough time for the share price to spike way up!! <giddy gg>
The downside to this is, too much time which allows more market positioning. Pushing down the share price to effect more shares going to the good Dr.
7. Correct me if I'm wrong, but this is the first public announcement that WF10 has indeed completed clinicals (As WF10 has now completed a pivotal Phase III study in late-stage AIDS patients)
Last I knew was full enrollment milestone, through the low key, I believe, the President's message, and that was weeks after the fact. And unblinding will take several weeks to analyse, so its release or publication is expected in the October time frame.
Other items to anticipate:
- to have, as pointed out earlier, 100% ownership in 2 platforms.
- gain scientists. If good Phase III, then gain very famous scientists
- gain 100% of future potential revenues from WF10 and derivatives
- gain publicity (hopefully a lot of Free publicity), higher profile (WSJ, Times, BW, .......)
- hoping NY is getting ready to promote
- saves spending money to commercialize or duplications of operations. Perhaps the Quebec plant can produce WF10. Another wish I knew item.
The downside, with such low share price, the dreaded early take out with little premium.
So, you see, not too strange a NR. At least not in my mind. But thanks for your opinion, it made me write down my thoughts.
Dimethaid Research Inc
DMX
Shares issued 41,478,033
2001-07-18 close $6.07
Wednesday Jul 18 2001
News Release
Mr. Bruce Voss reports
Dimethaid Research has signed a letter of intent to acquire privately held Oxo Chemie
AG of Switzerland, subject to a due diligence by Dimethaid.
Under the milestone-driven letter of intent, Dimethaid will have the option of acquiring
all of the shares of Oxo it does not already own, representing 80 per cent of Oxo
Chemie, from its founder Dr. Friedrich Wilhelm Kuhne, which at the discretion of
Dimethaid will be a cash or a non-cash transaction. Dimethaid currently holds a
20-per-cent equity ownership interest in Oxo Chemie. The company expects to enter
into a definitive purchase agreement during its second fiscal quarter, at which time
further details of the transaction will be made available.
Dimethaid first acquired an interest in Oxo Chemie in 1996, and has held a 20-per-cent
equity interest since 1997. "This is the culmination of the close working relationship
we have established throughout the clinical development of WF10, Oxo Chemie's lead
compound. As WF10 has now completed a pivotal phase III study in late-stage AIDS
patients, we are confident that Dimethaid's clinical and regulatory affairs departments
can capitalize on the experience gained in the development and commercialization of
Pennsaid, to bring WF10 to market," said Rebecca Keeler, president and chief
executive officer of Dimethaid.
WF10 is a proprietary immune-regulating drug that specifically targets the
macrophage, a key conducting white blood cell in the complex orchestra that is the
human immune system. The proposed investment in Oxo will significantly expand the
company's product pipeline in a new and exciting field of scientific knowledge.
WARNING: The company relies upon litigation protection for "forward-looking"
statements.
(c) Copyright 2001 Canjex Publishing Ltd. canada-stockwatch.com
|
