I beg to differ - I am inclined to think if there is real...

I beg to differ - I am inclined to think if there is real activity on the strategic partnership front, that it is important to show whoever is having interest, that you are not so desperate that you can’t raise any capital yourself. Take Novo Nordisk as an example - both Pharmagang and Phaedrus have used them as examples if I remember correctly. With their share price, they can easily buy a stake, have a good look and take over the company. Given how close the company is to having visible and achievable pathways to approval, and the amount of work they have done to get to where they are, with so many P3 assets, why would they not at least keep a strategic partner at bay for now, if only to do adequate due diligence to make sure it’s not a repeat of the previous debacles and the partner really does have the capabilities to take the company forward, and maximise the price of that initial stake?

From the point of view of a strategic partner, why would they not wait till the FDA comes back with a first approval when we are so close to finding out if it is happening? If an approval materialises, there will be more than one deal partner interested for sure, even if it includes an existing one like Grunenthal becoming more willing to re-negotiate or bring forward the milestone payments in the company’s favour because it has shown itself to be capable of getting an approval in another indication. It can also include someone with a global sales force that can be priced into a deal. The external factors are all lining up to allow both the company and any partner(s) to price the options more easily. Value is more visible, as is the near to mid term optionality.

Ask ourselves, fellow holders, if we have been following the company closely in the last 12 months, do we not think it has arrested a serious decline to oblivion and is now on a much steadier, if not positive, trajectory? If so, are you now willing to accept that it’s game over in three months because a powerful partner came in and took over the company?

In fact, if the company gets its first approval, and turns around to Oaktree to extend the tenor of the loan, I wouldn’t mind at all. It will just mean that any suitor will have to make itself more desirable.

Not financial advice.