"Partnerships can provide non-dilutive up-front funding, which is IMO what MSB will be seeking. So they can either hold out and simply raise dilutive capital from the market, or get a partner in an get non-dilutive capital."
The issue of "dilutive" as opposed to "non-dilutive" capital is one of the most abused, least understood topic of valuation theory.
People (including company management) say that if the company raises capital at the prevailing share price, but not lower than it, at the time of such a raising, then that is considered to be "non-dilutive".
But this is a bit of a furphy, I think. For, if the fundamental value of the company is higher than the share price (i.e., the stock is fundamentally undervalued) then selling new shares at a price that is lower than the value of the business, is clearly dilutive to the value that is held by existing shareholders.
Which is why I believe that any issuance of new equity should always be done on the basis of a renounceable entitlement offers to existing shareholders: that way, any dilution of shareholder value is able to be fully offset by the ability for shareholders to be part of the capital raising and to therefore be both sides of any value transfer from dilution, i.e., to end up in a neutral position from a shareholder value standpoint.
As for the Go-It-Alone or Partner trade-off in relation to aGVHD and back pain, the way I look at the situation is as follows:
From a total supply chain perspective - from:
1. the design of the treatment (i.e., the intellectual property), through to
2. regulatory approvals,
3. licencing,
4. manufacturing,
5. market awareness and marketing,
6. distribution, logistic & warehousing,
7. compliance,
8. administering to patients
.... steps 4 to 8 are what I consider to commoditised activities which can be procured from a number of competing service providers. As such the inherent value in this part of the supply chain are low.
Whereas stages 1 to 3 represent unique, highly-differentiated activities, which are hard-to-replicate (especially Step 1, witnessed by MSB trying for more than a decade - and, its precursor, Angioblast - another half a decade prior to that).
Applying this generic supply chain model to the MSB/Mallinckrodt situation in relation to AGVHD and back paid, MSB currently operates in Stages 1 and 2, and to a lesser extent Stage 3.
What MNK would bring to the table - as you point out - are described by points 5 and 6.
But those services are not unique in the marketplace; any of a number of industry participants could do the job of accessing market for MSB (and many companies with far greater market access, too, than just a relatively small operator with just one or two major product lines which are unrelated to the MSB product suites in question.)
So why MSB would partner with a sub-scale, narrow-channel operator like MNK, and in doing so forego equity share in MSB's very high-value IP (assuming it is successful in developing it) in exchange for a modest sum of capital plus some access to a low-value, commoditised part of the supply chain, is beyond me. Especially with MNK, which is somewhat of a bit player in the distribution channels that MSB would be wanting to access.
If MSB is as close as you say to the finish line as you say, then I believe it would be a far better - and, importantly, a far more shareholder-friendly strategy - to raise $100m (would that be enough, do you think?) via a 1-for-10 renounceable entitlement offer made to existing shareholders without having to give away any IP equity to some random interloper.
Surely - based on the scenario you have sketched about being so close to finishing completing the trials - any self-respecting and long-term shareholders would only be too happy to add to their existing holdings by just 10% for the prize that they would believe was at hand?
I mean, wouldn't you?
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