Hi @FreeFromStyle,My thoughts and pardon me if I do not answer...

Hi @FreeFromStyle,

My thoughts and pardon me if I do not answer specifically to your question.

A 45% dilution via the current CR is and always will be just massive. Particularly as it is concerns a late stage company (P3 results out in 10 months only) that realistically was in a situation to compare to a pharmaceuticalpartnership as an alternative to the ongoing CR.

So why did such a partnership kind of $300M upfront + ROY for ex US/CA/NZ/AU rights not materialize?

I see twopossible explanations:

1.New management did just not have enough time to get the potential pharmaceutical partner onboard as decision taking in large pharmaceutical world takes too long. Fred was appointed CEO of OPT on Oct 27, 2023 and despite his very strong ties into NOVN et al. his 7 months tenure at OPT was just not enough to finalize such a deal in time. That’s why financial needs required action now and could just not wait another 3 or 4 months of further partnering discussions.

2. Other possibility is that partnering talks were well advanced but did not find common ground on upfront payment and royalty rate as both sides assumed very different estimates on peak sales and profitability margins.

To put some numbers around possibility #2:

Let‘s assume 40% of peak sales being in US/CA/NZ/AU and 60% in RoW.

OPT says P3 will show 5.x letters delta over mono.
Therefore ww peak sales will be $5.0B with RoW doing $3.0B at a 80% pretax margin.
OPT demands $300M upfront + 20% of revenue from the partner, thinking that upfront is only 1/10th of peak sales (cheap) and 3/4 of RoW value staying with the pharmaceutical partner.
„Great deal for the partner“, is what OPT are thinking, „And we stay with 55% of the value = 40% of US + 1/4 of RoW value.“ But this a based on OPT‘s assumptions only.

As the pharmaceutical partner says P3 will who only show 3.x letters over mono.
Therefore ww peak sales will be $1.0B only with RoW doing $0.6B at a 40% pretax margin only.
Now OPT demanding $300M upfront + 20% of revenue would mean upfront being 50% of peak sales (too expensive) and only 50% of RoW value staying with the partner.
„No way“, is what the partner is thinking.
That‘s why the partners now offers 1/10th of his own peak sales assumptions (=$60M upfront) and 1/4 of value via royalties (10% of revenue).

Now again OPT: „No way! $60M does not solve our short term financing needs through readout and a 10% royalty rate is a joke. We‘ll prove you being too cautious on peak sales estimates and profitability margins. And therefore we‘ll go on our own with a CR instead. Speak to you again in a year‘s time.“

And that‘s where we are today. And that‘s why eventually OPT consider a 45% dilution being more or less close to what they’d expected from a pharma deal („keeping 55% of the value“).

A possibility only. But maybe a combination of #1 and #2 is what would come closest to reality.

Net/net I‘d say the CR is clearly a disappointment for existing holders (depending on their APP) that were betting on a partnership deal (as I was) but very compelling for any new entrant.