Ron,
There is never any guarantee on any product, medical or otherwise, for any company, listed on a stock exchange or otherwise. Your concerns about safety and efficacy are those seen for any company in the medical field with a new product under development. That said, I think that Inflazyme's chances, based on the preclinical studies, are about as good as you can see at that stage of development.
I also spoke with Jeff Bacha, after you did, this afternoon. These financing terms are about as good as any you're ever going to see. Inflazyme doesn't have to request any of the $15 million US buyin unless they need it, and they don't have to request conversion into Inflazyme stock at that time. They can wait, after they're received the financing, until any time at which they see fit. So there is lots of time for stock price appreciation before conversion.
As for the option agreement, this is pretty standard stuff. It simply means that they have entered into an agreement, subject to the scrutiny of each companies' legal personnel to make sure all the details are worded correctly and nothing is overlooked. The agreement was made at the highest levels of both companies.
The percentage royalties to Inflazyme is in the double digit range, although Jeff could reveal the actual percentages to me since Hoechst doesn't want it made public at this time. Inflazyme may eventually have to reveal it if and when they file with the SEC or some other body (my conjecture for some other body), but until then they have to comply with their partner's wishes. Also, Hoechst showed a great deal of confidence in them by wanting Inflazyme to develop Hoechst's own compound for allergy treatment. Not to mention the same royalty structure holds for this one as well. Not a bad add-on IMO.
One more thing. Inflazyme only has to develop these compounds through Phase IIa, then Hoechst completes the studies. If complete development is successful for both drug candidates then milestone payments can total up to $75 million US. Most of these are for the IPL 576 compound.
I don't know what you consider to be a good deal, esp. for a small biotech company, but this looks pretty damn good to me.
Sincerely,
Harold |
