Hi Wolf,
"What is clear to me is that Ms Keeler is either very
confident that she can satisfy FDA requirements - or that
she may have over reached."
100% Agreed.
This whole deal hinges on Pennsaid getting FDA. As you say, without FDA the money to finance this deal in cash is not there. Period.
As for a share swap, there is one reason the good doc will tender his Oxo shares for DMX shares - his combined investment in Pennsaid and WF10 is more lucrative than his 80% investment in WF10 alone. Without Pennsaid selling in the US, the swap simply does not bear fruit for him. Pennsaid selling all around the world is the obvious bone in any share transaction.
Furthermore, implicit in any acceptance of a share swap, is an expression of Dr. K's confidence that there IS a big market for Pennsaid and that it will sell very successfully on approval. All the approvals in the world won't do a thing for Pennsaid's sales or Dimethaid's share price appreciation, if nobody wants to buy the goop. And if DMX's share price does not appreciate than taking DMX shares for Oxo would be suicide for Dr. K. I imagine he has a better idea than we do of how the goop is selling in the UK.
Given the fact that Rebecca anticipates closing the deal in fQ2, I imagine this means she anticipates FDA approval this fall.
As for the dilution everyone is fearing, I don't see that as an issue. Rebecca will not buy Oxo if the WF10 results are not there. That's a given. IMO, the asset value of acquiring Oxo will, in a very short period of time, well exceed the dilution. If the deal closes, I don't think the dilution will be a worry.
joe |
