Hi Grain of Sand the possible $100’s of million dollar revenue question.
I think both Botanix and Brickell needed something from each other at the right time.
Botanix needed a commercial product to add to its pipeline – I think COVID added a legitimate time delay to Botanix’s original pipeline plans.
A faster pathway to revenue generation would help the market to regain faith in Botanix and hopefully increase the share price and investor returns. A commercial drug plus a phase III and multiple phase II drugs is a much more attractive buyout target for big pharma than just a clinical company.
Brickell Biotech was a small US clinical stage company. Brickell listed on the NASDAQ in 2019. Prior to this it was valued between $50 to $100 million privately in 2015.
Brickell underwent 5 funding rounds totalling $33.5 million. The biggest investor were Amorepacific Ventures, Charlie Steifel and Pallisades.
2010 Funding Round 1 - $6.2 million
2013 Funding Round 2 - $7.0 million
2014 Funding Round 3 - $2.2 million
2015 Funding Round 4 - $10 million
2021 Funding Round 5 - $8.1 million
Bodor Labs licenced SB to Brickell and in 2015 Brickell licenced SB to Kaken for Japan and parts of Asia. Brickell got upfront payments and milestones and tiered royalties which were undisclosed.
2015 also saw Brickell expand its drug offerings into Posoriasis and Auto-immune disease. In 2019 Brickell acquired Vical for its DNA delivery tech for an undisclosed amount. Needless to say Brickell was a clinical stage company relying on funding rounds and small licensing revenue for SB from Kaken.
Nasdaq listing was successful and saw Brickell Biotech’s (BBI) SP soar. Positive Phase IIB results for 15% SB impressed the market and the stock hit $3.39. COVID affected biotech badly. In October 2020 the stock price was down to 0.56c and in Nov 2020 the Brickell CFO resigned.
Final funding round in 2021 for $8.1 million kept Brickell afloat. In Sept 2021 Brickell bought another drug DYRKA program in clinical stages.
The stock price dropped again and by May 2022 it was as low as $0.29c. The problem was that SB would take too long to get FDA approval so there was no immediate revenue possibility. I speculate that with Brickell collecting immunology assets and inflammatory assets that it needed to offload the most advanced sellable asset to inject some enthusiasm back into the share price and to fund the rest of the pipeline.
However the sale of SB to Botanixfor $9 million upfront and $168 million in future sales and milestones did little for the Brickell share price. FDA approval would be 12 months plus away and so there would be a lag before any future revenue or milestone payments were achieved.
One June 30th2022 it looks like the Brickell Board made a decision to do a reverse stock split 1-45 in an attempt to lift the minimum share price bid back above $1.00, as per NASDAQ compliance requirements.
After the stock split BBI returned to NASDAQ compliance in July of 2022 but that was short lived and Brickell again faced delisting in August, 2022. It was in September this same year that Brickell rebranded and announced a strategic shift into immunology and inflammation fields and away from dermatology.
I feel like as a clinical stage company Brickell was struggling financially during COVID like most of the market and BOTANIX came along at the right time with a chunk of cash and a possible injection of life back into the stock price which was ailing around and below the $1.00 minimum bid price.
I suspect Botanix ultimately ended up with the better end of the deal.
Botanix is now 2-3 months away from potential FDA approval and transition to a commercial pharmaceutical company. All just speculation on my part but I think we will look back at this time as a very strange era in biotech history. I think Vinnie was there with a nice price at the right time and Brickell looks like they needed this.
(20min delay)