Thanks for your thoughts WAG. It’s refreshing to have an alternative perspective provided with logical reasoning and without malice, barbs or condescension.
What I take from the announcements over the past year is that it has clearly been the preferred option of the Board to partner in some way prior to Phase 3. But I also think that the following comment in late August - Following the (FDA) meeting, the Directors will consider options, including partnering, to fund and execute the Phase 3 trial - indicates somewhat less certain preference.
For me, a pivotal event has been the share consolidation. Although the consolidation was executed fairly rapidly in November, it was clearly already decided on in June or before.
The stated purpose pf the consolidation was to allow investment by US institutions. This begs the question - why, after all these years, did the NEU Board suddenly perceive the need to have US institutions on board? A few possible explanations come to mind. Perhaps as part of the financing deal with Lanstead, this was a requirement to allow Lanstead to exit its position. Or perhaps it had become crucial by the end of November to both substantially raise and put a floor under the share price. Or perhaps a NEU register of 100m vs 2bn shares and sp of $3+ vs $0.15 can more appropriately accommodate any company wishing to take a substantial equity stake as part of a partnering deal.
If the answer is that the Board wanted to raise the share price substantially, this begs the question - why, after all of these years, is the Board suddenly acting on the share price? Two possibilities come to mind. Perhaps to raise the price to an appropriate level, pre-acquisition. Or perhaps to raise the price to an appropriate level, pre- CR.
And now we have another question to ponder – why the sudden exit of Lang Walker’s man on the Board? I’m certain it’s related in some way ….. but how? Perhaps it’s Walker intention to exit soon by transferring his sizeable stake to another willing party. Or perhaps there’s been a disagreement over the company’s strategic direction. Or perhaps at this point, Hancox’s presence on the Board is perceived as an impediment to negotiation/investment by another important party.
At this year’s AGM, Richard Treagus said that putting funding in place was important for Neuren to approach partnering discussions in a strong position. No doubt, improving the share price/market cap of the company also helps to strengthen the company’s bargaining position.
What I do know is that the Number 1 rule in bargaining is to be prepared to walk away if satisfactory terms can’t be reached.
If one considers all of the measures that have been put in place by the NEU Board, the company is now well-positioned to freely choose whether it will agree to a partnership, or whether it will walk away (i.e. go it alone to end of Phase 3).
Perhaps equally important, a clear message has now been sent to those on the other side of the bargaining table - Neuren has a choice.
NEU Price at posting:
$3.23 Sentiment: Hold Disclosure: Held
(20min delay)