I'm expecting to be shot, but with the euphoria swamping the board on ever more remote pretexts, it seemed sensible to reflect on that old adage. What might happen should Elixia fail?
First, define 'failure'. The Company has always said the point of the cosmeceuticals is to fund the pharma development. The $7m fund raiser will only see them through a few months, assuming outflows of $700k a month & the launch costs. So Elixia will need to be generating, net, enough to cover $700k a month by the autumn.
That's a tall order, in double quick time, in a cut throat consumer market with a shoestring launch budget and resources. If they fall short, they're back to raising cash - from a weak position.
Would 'failure' be an entirely bad thing?
We know the technology is looking pretty good & has a much bigger profile than say a year ago. The company reported it was considering a number of routes forward before going for the recent funding route. These may well have included suggestions of one sort or another from big pharma. Obviously, any 'sell out' would be at a (big) discount to believed potential. Hence perhaps the big gamble scenario we currently have.
But even at a big discount, the state achieved with TPM is surely worth a deal more than the Company's c.$80m current valuation? POH has promised a lot for a long time but always disappointed. Why not the minimum 40c or so, perhaps even a bit more, that SCE premised a year ago? I for one would be delighted if somebody took them out at that price.
Given the price of the last three fundings, a substantial block of the shares in issue might well agree if the launch fails to meet the needs by say September.
POH Price at posting:
11.5¢ Sentiment: Hold Disclosure: Held
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