Update of info.
Please read this completely if you are a lidak follower, and give comments if you have other info.
From reading and asking around, the following impressions emerge (and I know there are other ways of seeing things, but I think the following is close enough).
Katz, as he has previously indicated, was concerned he would lose control of Lidak. I don't know why, but it seems there were difficulties. The HealthMed deal was to try to get control or keep control of Lidak. Katz very well may have misrepresented his standing with Lidak (as HealthMed has indicated), and the attempt to get control fell through, and HealthMed, along with other shareholders did settle the potential proxy fight by agreeing to the increase in board members.
I don't understand Stein and some of his comments. He seems to have gotten quite emotional over his experience with Katz, and has made some embarrassing statements. It seems Katz did lead on somewhat and was desperate enough to make was seems a bad deal with HealthMed (to get control of Lidak). On the other hand, it also seems possible that HealthMed was taking advantage of the situation, or was hoping to, until it became clear that their proposed deal wasn't going anywhere.
Of course, almost all of the info. about these events has been released in very public comments between Katz and Stein and HealthMed. Very little from Lidak. This has resulted in our picture of what's happening being from the point of view of Katz and Stein, and it hasn't been a good picture. And it seems like info is being feed through some posters on the Yahoo thread, with Katz being one acknowledged source.
This has led to rumors, and worse, the framing of the debate in a manner that's skewed to certain interests. The rumors of particular concern are those that paraphrase what certain Lidak board members are saying. Such as "so and so said Lidakol is only a 50 million dollar drug" and "Yakatan hasn't ruled out a deal with Stein". Naturally, this has led to a debate if Lidak's board and CEO has any vision amoung other things. How are they going to raise more money? Etc.
Lidak may have been a little too quite during this time since it has allowed these rumors to expand (by not putting enough info out), but of course a lot has been going on lately.
I have talked with Yakatan and Weinress recently.
First, I don't think they lack vision. Though it may be indicated that 50 to 100 million in sales is possible, they are aware of the potential size of the herpes market. I discussed taking market share from acyclovir and if the market could be expanded for herpes drugs. If a good drug is introduced and works in the real world, better than the various acyclivirs, then the market could expand. It's possible a drug 2 days better could be a 1 or 2 billion dollar drug, but much of that would depend on marketing, side effects, and how hard it is to use and if it works well outside a study. This answer to my hypothetical query adequately shows they understand the market. I don't know if they think Lidakol can be this successful, but they do understand the herpes market IMO.
Second, they will discuss the Lidakol study at the annual meeting. Yakatan isn't sure why people are concerned so much with Lidakol versus placebo (but of course he knows and we don't). His point of view is the study is good and the numbers are good.
Third, financing. They are aware of bad deals in biotech. There is no bias against HealthMed, but I believe there are no talks going on.
But they are being presented by a number of options by a good number of financers. Nothing out of the ordinary as far as I can tell. I think we have to trust them to get a good deal if they raise some money.
Forth, distribution. They are examining codistribution agreements. In this area, Yakatan seemed to really know all about it. There is interest by these companies. Lidak is also thinking about selling (this will take money of course). Perhaps upfront payments could help.
Fifth, Yamanuchi. It seems something is going on, but I couldn't tell what that means, but maybe, they will have something to say at the annual meeting if they are ready.
Sixth, Katz. One thing I liked is nothing ill was said about him and there was no negative tone to the voice. Professional. I was wondering about the date MBI let Katz go, the newspaper said March, but that was a typo because it was a couple of weeks ago.
Seventh, LMI. Again, Yakatan is very familiar with this area. Possible nonexclusive licenses to all companies developing antitumor vaccines to potentiate their products (somehow, I wondered if this idea was presented and explained and sold to Yakatan by me over the phone, but on the other hand, he might have been planning this and was wondering how I came up with it----because it's the best business and moral plan to get this possibly important technology used quickly in a competative situation among all the companies working in this promising area).
Eighth, why insiders haven't been buying. I am getting the impression that most of these insiders don't have a lot of descressinary funds and most of their future net worth is tied up in hoping their options will be worth something one day. The newest board nominees do have plenty of money and have bought shares on the open market (or at least from someone).
One negative is that Lidak did not release info earlier, and won't for 2 more weeks. This has made it very difficult to tell what's going on in Lidak's time of turmoil. I think they realize this now.
As you know, I think Lidak is 1-3 days better than placebo (and that would be even better when corrected for spontaneously aborted episodes as the intelligent rat post on yahoo described). If this is true, we probably have a top drug here. I think Yakatan is likely to make good distribution agreements, hopefully he will take his time. If Lidakol is 2 days better, then I think he can hold out for upfront payments and a larger percentage, maybe up to 40 or 50%( including manufacturing profits), but he ought to be able to get close to this area in any case. Since Lidakol won't be looking at approval till the end of the year, he can hold out for a while, and the money can be conserved till next year. I think when the lidakol study comes out, it will make more people seriously interested in negotiating a good deal. I wouldn't be surprised to see the stock price do quite a bit better. The news has been dominated by such odd and negative things for so long, that buy on the rumor and sell on the news may not apply to Lidak (unless it decides to spike before the meeting).
To summarize,,I don't know what will happen with Lidak, but they seem to have a chance to come out of this. Maybe they can pull a centacor. I plan on hanging around to find out. |
