Besides caring about NNVC as a source of working capital, do you think Diwan wants to make sure NNVC shareholders are rewarded to the maximum extent for having given the company its cumulative $100 million in working capital?
The problem we have today is that NNVC is running out of money and setting up for a major haircut for equity holders when it does another equity financing. Caring about the shareholders today means getting the share price up.
That is done by removing perceived risks to the business:
- Showing NNVC management can execute to a schedule that moves the company towards human trials.
- Showing that the company can produce drug material in commercial quantities at prices viable to the business.
- Showing that the company can get a drug through FDA approval process. (I know that's a ways off, but maybe it didn't have to be so far off.)
This should be the focus today, instead of developing the science and bringing along all of the risks.
BTW, when cash is so low, should we really be spending so much time developing a shingles indication when we haven't yet been able to come to terms with licensing? Why do you suppose is the sticking point there? Why didn't we simply move ahead with HSV-1 and HSV-2 rather than delay a year working with SUNY and Dr. Moffat on shingles?
Then there's the fact that until NNVC becomes cashflow positive (which is a long ways off), Diwan's 15% royalty on revenues and 30% markup on R&D and Manufacturing services is likely to milk the company dry of working capital.
Diwan has obviously put TheraCour ahead of NNVC. TheraCour (which he owns 70% of) is basically taking no risks. It has a captive customer in NNVC, who must continue to do R&D and Mfg business with TC or forfeit the nanoviricide licenses they have purchased. NNVC is taking all of the risks, and carrying TheraCour on their backs as far as money and risk are concerned.
So, for taking basically no risks, TC is primed to take at least 50% of the profits for the next 20 years, if NNVC survives that long. If Diwan wants to extract the maximum cash from NNVC, I suspect he would actually be better of by lowering the royalty. He is in serious risk of killing his fundraising arm, TC's host.
I think it's clear, between NNVC and TheraCour, where Diwan's loyalties lie. |
