Purchasing the rights to license (e.g. rights of first refusal) is different to licensing a product. The former is usually a down payment and in some cases a commitment to help with the costs of running additional clinical trials. The latter is the ultimate prize, secondary only to a full takeover offer.
Aside from the previous reasons I have given, another reason why I don’t think option (a) or (b) are likely outcomes for 2021 is because Novartis and BMS are not technically competing for use for Veyonda. In the case of Novartis, Veyonda is being used with Lu-PSMA-617 to treat late-stage prostate cancer. For BMS, Veyonda is being used with Opdivo to treat mild disease progression for a variety of cancers.
The obvious holy grail will be to partner with both. However, I will acknowledge that anything can happen in biotech. But as a base case scenario, if we were to talk about a takeover, it would make more sense to be acquired by BMS than Novartis since Novartis will have to pay a much higher premium for a product that may only be of use to them for a single indication. Novartis will also likely put more stringent conditions in place, whereas I would expect a deal with BMS to have less conditions.
I’m currently undecided on whether I’ll buy into the company just yet. I have a buy rating because I think the mid-term prospects of the company are promising (and I can give you many reasons for this) but I’m not yet convinced buying in at the current valuation is a good idea. There are currently two main issues I have with investing in NOX and I also expect 2021 to be a somewhat turbulent year for NOX and biotech’s generally, so I will wait until NOX releases their trial details for DARRT-2 and for Redhil Biopharma to release some of their results next quarter.
Also, it looks like there is strong resistance at 50 cents and there might soon be a good buying opportunity in the low 40 cent range.
