To all ALLP investors:
Just spoke with Aliance's investor relations. I have summarized some key points related to the J&J announcement:
1. Phase II results for Oxygent as a blood substitute were satisfactory, both from J&J and ALLP's perspective. Alliance wanted to proceed to Phase III quickly since the review with the FDA was also satisfactory.
2. Based on preliminary results of Oxygent in animal studies for treating heart strokes, J&J wanted Alliance to conduct a full blown Phase II studies for use of Oxygent as a drug to treat heart patients, before moving to Phase III. This could take 2 - 3 years (which dosen't matter much to J&J) which Alliance cannot agree to since it wants to get a drug out as quickly as possible in the marketplace.
3. From J&J's perspective, the financial value of a heart drug would be significantly greater than a blood substitute.
4. Alliance assumes all costs of development. J&J retains marketing rights to Oxygent, however Alliance receives significanlty higher royalties. Oxygent Phase II will most likely commence in Aug.
5. Alliance will have to raise 15 - 20 MM to see through the final development phase of Oxygent and Liquivent.
This is the only risk (in my opinion) of this whole episode.
Once the financing is in place, I expect the stock to rebound. I also think that the PRI arm of J&J, which was responsible for the development aspects related to Oxygent, may have made an uneconomic decision, esp. since they did not have any issues with respect to the efficacy of Oxygent as a blood substitute, and J&J had already invested about 70 MM in this product. They did retain the marketing rights, but at far less attractive terms - if Alliance can find another marketing partner at better terms, J&J has the option to match terms.
The fact that two of Alliance's major partnership agreements have had adverse outcomes without any product issues leads me to wondor if their senior manegement is competent in managing relationships. They certainly have done a good job in marketing the company's technology potential.
Regards
Alok
P.S. I added to my position on Friday. |
