Thanks for your analysis Madam. Based on your findings, it certainly creates a lot of doubt about the quality of MSK as a potential partner for MSB, and if I'm reading your post right, it is what you are alluding to, isn't it?
Each will no doubt come to their own assessment of the quality of MSK as a potential partner for MSB. All I sought to do was to distill what I thought were some salient facts surrounding MSK's financial positio.
But yes, you are right, from my vantage point for a company that is lauded as the world's leading regenerative company, I would have thought that MSB would have been expected by its supporters to have courted more eminent funding partners (like Celgene, for example).
Because a business whose earnings today are almost 20% lower than when they were before $5bn was spent on acquisitions, which have the company in a position where 67 cents out every dollar of EBIT has to go to service the interest on the debt is not the kind of business that I would see as being financially robust enough to help MSB get to where it needs to be in terms of commercial self-sustainability.
In fact, I find myself thinking, "Gee, with the umpteen high-quality, well-capitalised and large pharma companies around the globe, MSB went with a somewhat challenged company that is, objectively, in a bit of a financial bind?"
Another way to look at it too is MSK having the vision to get in early into ground breaking technology that will change their fortunes and has the potential to help provide more effective methods for treating unmet medical needs.
Sure, that is indeed another way to look at it. From a big picture point of view.
The not-so-small problem with that thinking is when it comes to some of the financial practicalities behind actually executing on that "vision to get in early into ground breaking technology that will change their fortunes and has the potential... etc. etc."
Getting to play this game doesn't happen for free, as the ~$550m investment that MSB has made over the past five and a half years demonstrates.
So how does MSK pay MSB if they want to get on board the dream [*]?
Promissory Notes? Crates of Bananas? Or does MSK raise capital from its shareholders, thereby diluting them so that MSB's shareholders aren't?
It's a tough one, I think.
But like I say, all I've tried to do is make the relevant information available.
Each may interpret it in the manner of their choosing.
[*] And remember, what MSB really needs from a funding partner is not some small piecemeal disbursement like the MSK deal, that merely keeps the lights on for another quarter; what MSB needs is a partner who will cut it a cheque so large that it provides cash runway that is measured in years, not just months or quarters. Financially MSK, is not in a position to do so. (In fact, it was Silvu himself who opined in presentations some years back that, because of the long lead times involved in product development, one of the key requirements for success was a long, multi-year cash runway. Evidently, he has fallen a tad short of heeding his own advice.)
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