Hi
@ddwn,
the problem in these threads that I'm seeing is that posters are tempted to look at these funding options available to Mesoblast Ltd in the
alternative , or at best with a capital raise as a 'hard' choice to be avoided.
Why are we doing that? There's no reason IMO for the company to take any such approach. CEO Itescu is on record as saying - as recently as last Tuesday - that the company would like to have 2 years of cash runway available to it.
I think it's going to do absolutely
everything for financial strength purposes i.e. as CEO Itescu said at the AGM "
We're working and we have very advanced discussions on corporate initiatives to strengthen our balance sheet, including royalty monetization, including strategic partnerships and including access to capital markets."
Lets do the math on 2 years cash. I think we'll find that the company needs more than just the small AUD36.6m placement & the AUD61.1m rights issue. BTW, I think the size of these issues is fine i.e. both the placement and the rights issue, and the rights issue is very good for ordinary shareholders. And since BP is managing the placement I see nothing in it that would be appealing to short-sellers, except through backdoor sub-underwriting on the rights issue. I'm not sure if BP may be intending to cover that without sub-underwriting (any ideas on that
@Lopez?).
As other posters have remarked, it's best to approach partnership negotiations without needing money. So, that explains why the CR is being done first.
OK then, what's next. Well, I've already suggested why I think the timing of TEMCELL royalty monetization may be serendipitous. I just don't see that the company would derive a relative advantage by holding onto it now, when already identified indications for remestemcel-l will open up so quickly after approval (even without off-label uses), and the post-approval cash flows on ANY SINGLE indication will dwarf the current royalties.
So if it were me, I might tackle the royalty monetization next, all the while talking to potential partners & telling them that we're probably going to run off those indication partnerships in a Dutch auction - should be good for a laugh (but, of course, I wouldn't actually do that - I'd try to find another Teva if I could).
So, as I see it, Mesoblast Ltd has said nothing to indicate it won't pursue
all these options at the same time & has every reason to do so.
There is no "betrayal" IMO. We are loved IMO. It's all good from where I sit.
Cheers
A great day for a walk in a park.
GLTAH
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(20min delay)