A CR is indeed a possibility. It's not a terrible thing, but it would bring some dilution so naturally shareholders will be nonplussed. People will express their disappointment and those amongst the retailers on HC who have extensive experience of getting INDs for blockbuster indications approved by the FDA at first time of asking will be well within their rights to criticise. However, it'll only be done if it is the smartest move.
The last CR was at the onset of Covid lockdowns when the market was in a panic. The next raise, if required, should be from a position of greater strength. If it is post-IND, that is virtually certain.
Despite cash burn on the submission, clinical studies, and trial preparations, a CR is not a definite though. Morgans apparently believe it is increasing in likelihood, but Paul has intimated differently to those who were listening. Firstly, a partnership is a more than decent chance of arriving first. Post-IND, any CR will be a straight investment in adding ballast to the balance sheet expressly for negotiating leverage (i.e. so as not to be coerced into accepting less than best-value in any partnership arrangement because cash to fund continuation of trials is running low). If the CR were to dilute beyond what any offered arrangement provided, it would simply not be undertaken. If it is, it simply means it has been deemed by the board that there is greater value to holders by accepting the dilution (whatever it may be) a continuing trials, than there is by signing what is in front of them at that point in time.
Paul also previously mentioned the potential for other non-dilutive financing arrangements, so they are not in a position of weakness during partnership negotiations. As a Phase III company, they may indeed find credit financing to be more readily available on favourable terms.
I'm willing to accept dilution, personally. I won't have an issue with it, and it will only be done for the right reasons. The company is on a journey where it does not get to set the timelines. Journey's require fuel. I'm sure anyone who sat down with Paul and got any realistic sense of the size of the undertaking would soon drop their antipathy about 'missed timeframes' and the like. They can't tell the future anymore than we can, and when dealing with external behemoths the goalposts have a nasty little habit of moving. If someone had the kind of life which is full of absolutes, then this all must be frustrating indeed. Most of us realise that intricacy, change, and the unforeseen, plays a part in reality. PAR must bob and weave, roll with the hits, play the game. It'll all be worth it when they bring that big partnership deal over the line alongside our newest bestest Big Pharma buddies.
I should add that none of this is aimed at you Sojourner. Your post simply triggered my thoughts on the issue.
PAR Price at posting:
$1.90 Sentiment: Buy Disclosure: Held
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