brilliant - direction set towards delivery

This is exactly what Consegna promised and as always with biotech's you need to read between the lines to see how much more.

First lets call a spade a spade. This is a backdoor IPO with a few bonuses. Do some research on IMU. If I'm not mistaken they are sitting on $1.5m cash. After the deal is done and an extra $1m capital is booked (might I add, at a PREMIUM to IMU SP) they are sitting on $2.5m. With CGP owning about a 1/3rd of it. Unless they were selling for $100m cash I'd would have been very dissappointed to see this sold without CGP keeping a hefty portion of future potential and clearly Fabio wants to keep our fingers in the pie so I couldn't be happier.

Secondly lets look at WHO we are getting as part of the deal. IMU's chart looks a bit sick but if you read through their history you can see a clear record of DELIVERY in a very high risk play. The story in brief is that they had IP for a couple of pig and poultry vaccines. In an early stage of research they aquired a license arrangement with a multi national. After some further research the multi national backed out but not until IMU was paid for the privilege and got the results of the multi national's research. They did this a 2nd time with another multi national. And the same thing happened, but again not without IMU getting the benefit of further free research and $2m cash. Now then end result is not ideal, boh deals were terminated but this is somewhat analogous to drilling an oil well that comes up a duster. There's risk in this research and it didn't pay off this time but what's far more important is how IMU management handled things. They steered some feldgling IP through two deals with huge players in both cases came off on the best end of the deal. Risky plays like that pay off sometimes and other times don't, what matters is how risk is managed so you can keep going until you hit a gusher. I'm pretty happy to have a team like that on board and 100% focussed on delivering one of CGP's products to market. Take a look at their history of capital raising, through all this they've managed to keep a very tight register which is very attractive for CGP.

I see some questions being asked about the point of moving assets around into new vehicles. Well I can see only upside to this. Linguet patent is due any day now and that's the catalyst for a lot of action on this product. CGP has some crackers in it's portfolio but imagine the scenario where one of them gets some attention from a big pharma. IMU as a single product vehicle is FAR more attractive as a takeover target that being forced to aquire all of CGP with a bunch of other products in various stages of development that they may not be interested in. It also keeps a team specifically focussed on this one product, a team with all eggs in one basket that NEEDS to get it market ASAP. One thing this announcement indicates but doesn't say is that things are moving behind the scenes.

The other benefit of course is the ability to raise capital without blowing out CGP's share registry. We've added a few lately but that has all been announced and we knew it was going to happen since 2010. The cleanup is finished now so we can expect very little further issues in future.

The most important part about this announcement like the last one is what it DOESNT say. Does anyone really believe IMU didn't do due dilligence on the Linguet IP? The grant of patents is IMMINENT imho (see my previous posts). And that means commercialisation is not far behind it and what matters most about IP is what makes it unique. Comparitavely perfect dosing, much easier and more pleasant to take and it leverages pre-existing drugs. i.e. no long regulatory cycles. I invented something myself once that I didn't think I could patent but in the process of investigating I found out something that is extremely relevant to Linguet. You can put a patent on the unique combination of existing IP. That means for example Nurofen kids lolly lozenges, patentable!... If I owned the Nurofen brand I'd be pretty interested in that. Low cost, tasty nutritional supplements perhaps also targetted at kids, patentable! Now that's a fast route to market if I ever saw one.