Highlight for me was that Freiman twice referred
to memantine as a potential cash cow, and if I
understood correctly if everything works out
(the big if I guess) NTI gets a majority
of the revenue in the US and Merz gets a majority
in of the take in Germany--the actual numbers
are a secret, Merz being very private etc, so
worst case, NTI only gets 51% in the US and
next to nothing in Germany.
Well I guess worst case is that Memantine never
gets to PhaseIII. But my limited understanding
of the whole thing is that NTII seems to trade
at an awfully small market cap for phaseIIb...
Okay, back to the call, he was generally very
conservative--they would like about 6M to do
the things they want to do and to get it they
need a deal--or to be more precise, he said they
had a checklist for getting another 6M, which would
be about what they need at the current burn to get
them thru everything they want to do into 1999.
1. Do a deal with a large Pharm co, and there
are ten big names on his list
2. with orphan status for X they can probably
get another 100k to 1M for grants
3. 5M from a private placement
4. Reapply for Nasdaq
(How about number one, drop number 3, thanks.)
I don't know how the last one gets you any money
but I'm not an accountant and am very lazy about
reading the financials, stock price isn't the
same as cash in hand to do trials and pay salaries
--probably by that time in the call he had become
sidetracked about what his checklist was supposed
to be about (how to come up with 6M) and he had
just sort of fallen apart into a list of priorities,
and getting NTII' share price up and the company
back on the Nasdaq was NOT a very high priority.
If this company had nothing to work with, maybe the
priorities would be reversed, so that's a good thing
for investors I think, maybe bad for short term
traders who were counting on more of a follow thru
after the Merz news.
Anyway, I am just trying to relay the mood of
the call, to be honest the science of biotech
pretty much goes over my head, I just hope that
I can find things that are cheap for how far
things are along in the pipeline...
Oh, something important about the deal with
Merz--Mr. Freiman did make it pretty clear that
the deal was done because it is the best way
to get all the pieces together for the FDA,
Merz had a lot NTI needed and NTI had clinical
data that Merz needed (or the other way around).
One thing that stuck in my head was that they
still don't have enough people enrolled in phaseII
trials for Xercept, actually his exact words were
"so far so good" but I'm pretty sure that he
said they only had less than one quarter of the
neccessary enrollment of 30/30/30.
That post probably wasn't too useful, but like I
said I only have a very limited understanding of the
science and pretty much invest by the seat of my
pants. I think I know the risk reward situation
tho. Good luck to all, back to lurker mode for me.
Warning: it is possible that I did not take clean
enough notes and got confused on something, if I
had to give you all a lousy "bottom line" summary
it would be
1. don't count on Xerecept
2. doing a deal with a large Pharma is likely in
the next six months
3. cash and burn rate were much more of a concern
than getting the price of the stock up in order
to get off the pink sheets. |
