You're right, my model is overly simplistic. I stopped refining it when it was clear to me that we were going to lose all of our money.
My model:
- over-charges for R&D, and maybe manufacturing.
- under-charges for a whole bunch of other factors: [licensing payments ($9 Mn for VZV, series A shares that dilute the common shares) ineffective management, corruption, conflicts of interest, higher financing costs due to recurring ethical lapses, a yes-men board, requirement to use TheraCour as a sole supplier of R&D and Mfg, an utter disregard for the common shareholders' interests, a CFO who is in cahoots with the CEO, etc.]
If you're going to make refinements to my simple model (which is fair), you should build a better model that takes these numerous, highly negative factors into consideration. Otherwise, all you have is a fairy tale...written to end hapily ever after.
Remember, you're in business with an utter crook, who thinks nothing of changing a contract so he can charge us again for something he already licensed to us (and for which he now "can't find" the original license). Only this time he's charging more than the current market capitalization of the company, for one crappy little indication that caused us to delay development a year or more to develop a new model rather than pursuing an HSV-1 or HSV-2 indications with ample animal models.
Think of it this way. You hop into a cab with a sleezy driver (Diwan) who starts the meter and takes you whatever way he wants...while the meter is running on your dime. How do you model Diwan's level of corruption? I model it this way: Diwan directs ALL of the money towards what he believes are in his best interests. He feels no obligation to make sure you (the shareholder) make any profit whatsoever. Yes, Diwan made a deal with himself, and your money. He will honor that deal until it's inconvenient, and then he will negotiate with himself again.
I don't think you've modelled that into your response. So share with me your modelling of those factors. Perhaps I can suggest my own refinements to your model. |
