NTII: Neurobiological Technologies Message Board

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Biotech / Medical : NTII: Neurobiological Technologies

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Dec 26 9:30 AM EST

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To: Sam Quentin who wrote (27)	9/19/1997 7:59:00 AM
From: Howard Frederick	of 36

// <<Apparently management isn't going to develop Dynorphin A in-house.>> Is that good or bad? What does that mean? // Whether it is good or bad depends on the correct interpretation. A couple of objective facts: 1) NTII doesn't have enough money currently to fund clinical development of three drugs. 2) NTII currently doesn't have any partners to fund any of their trials. Some possible interpretations: They may only outlicense Dynorphin A as a way of developing it, not get any immediate funding, but at least retain some of the future potential income of the drug. At least that way something will happen with the drug, rather than have it sit and wait for NTII to raise enough funds for the drug to be developed in-house. This may also help raise the stock price a bit. (Some investors will see this as a way of reducing risk in NTII stock - Three drugs in advanced development is less risky than two.) They are outsourcing Dynorphin A as a way of providing funds without incurring further dilution. They are outsourcing Dynorphin A because they don't see it as promising as the other two drugs. They don't have the funds to develop Dynorphin A now and are dangling the drug to see what kind of offers they get. They only have three ways to raise funds 1) Partner development of Xerecept and/or Memantine thereby giving up portions of future profits, 2) Issue more stock (at a currently depressed level) thus undergoing significant dilution, or 3) Give up all/most of the rights to an existing drug for immediate funds There are more possible interpretations, as far as it being good or bad for NTII stock price, that will depend on the deal that is made, if one is made.

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