The Galidesivir program: Has ILA got the cash?The Term-Sheet is...

The Galidesivir program: Has ILA got the cash?

The Term-Sheet is a good starting point!
"... would be interesting to see how much cash it will be to buy the rights to it..."

Option Fee: PAID!

• Island Pharmaceuticals have already paid BioCryst a US$50,000 fee for a 12-month exclusive option to acquire the program.

Exercise Fee:

• If ILA decides to proceed with an acquisition, they will need to pay an additional US$500,000 to acquire all rights, title, and interest in the program.

Milestone Payments:

• Upon Completion of Phase 2 Clinical Trials: ILA pays US$500,000
• Upon Approval of a New Drug Application (NDA) in the U.S. or Equivalent: US$1 million payment
• If Approved via the FDA’s Animal Rule Pathway Without a Phase 2 Trial: US$1.5 million payment becomes due

Royalties:

• BioCryst will receive tiered royalties ranging from 5% to 10% of net sales

Priority Review Voucher (PRV) Proceeds:

• If the galidesivir program results in the awarding of a PRV by the FDA, BioCryst is entitled to 25% of the proceeds from the sale of this voucher.

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Is the money there?

The next payment required (if proceeding) is US$500,000. It's a bit unclear to me if this money is considered there! Here is the extract from the Q & A provided by ILA:

• Q:"How will you fund the acquisition of this program?" [Note: this is about the acquisition so it refers to the $500,000 in particular!]
• A: "Given the option has a 12 month expiry, no immediate additional funding is required to service this program. There is significant interest in seeing Island build out its pipeline with a series of assets that develop the company’s value and have potential to support military preparedness efforts. The Board is investigating a number of avenues in this regard and will update the market once further diligence on the asset has been conducted."

I read this message as saying that the acquisition is currently not budgeted for. It may well be that there is enough money to allocate to the acquisition if needed, but that has certainly not been stated!

I have confidence:
a) We know from the enthusiasm that came with the cornerstones injecting $3.5million cash into ILA that the Galidesivir program was seen as not just a pipeline expander, but something of a solid backup plan too, in case ISLA 101 falters. I can't imagine that an unfunded program would be seen, by some really astute biotech investors, as a backup plan of any kind! What if the funding fails?
b) We also note the statements repeated on this 4c: "A$3.5 million secured via a two-tranche placement to sophisticated and specialist biotech investors, funding the Company to achieve its ISLA-101 Phase 2b trial read out and explore pipeline expansion opportunities ..." ... "This investment ensures Island is well-funded, enabling the achievement of critical near-term inflection points and pipeline build..."!

The search for non dilutive funding was always part of the plan, so perhaps it shouldn't be too much of a concern: A statement on the Small Caps website says; “We were seeking a small molecule with antiviral activity which would fit with our interest in supporting national and military preparedness, with potential to attract non-dilutive funding in support of clinical studies.....The identification of this particular antiviral molecule ticked each of these boxes.”

Time is running out!
The target date to acquire this (if proceeding) is the quarter ending September 2025 (July to Sept 2025). So, a decision is coming soon. That's got to be exciting!,
We know that the announcement will come with some details on funding! The word 'funded' will make my day!

The next read out!
Perhaps, all depends on the next results in April, and how the share price responds to it! My guess and hope is that, we will get a flow of news prior to April, otherwise the share price might collapse so low that even the expected good news in April might not give us the size of lift we desire!

Leadership changed!
I hope Al is not feeling too bruised following the spill! A hasty departure, characterised by an offloading of his truckloads of shares to the market, would be terrible to all of us!




REFS
ASX Ann, 3 July 2024; Island signs non-binding term sheet with BioCryst; https://www.islandpharmaceuticals.com/site/pdf/ed1e635e-1357-43c4-9195-edc43a7777ea/Nonbinding-term-sheet-signed-with-BioCryst.pdf?

Island Pharmaceuticals acquires exclusive right to develop antiviral drug galidesivir: Three-year search; SMALL CAP INVESTING