Great point you make, both on the funds safety front but also the returns,
5% on $20M is $1M profit, which pays for our corporate overheads for an entire year. Certainly not something to sniff at,
A key differentiator for biotechs, particularly in Phase IIs, is the future cash requirements even if they are successful. You see many trading below cash levels and negative enterprise value at the moment and many are screaming that they are bargains, but all that cash is being burnt with future revenues so far away that even if their Phase II is relatively successful, if it is a unforgiving indication area with 20% Phase III success, they would be hard pressed to find investors for that capital raise when they can get 6%+ on risk free bonds.....
Really goes to show how fully funded Phase IIIs have the keys to the castle and have escape velocity from this macroeconomic sh*tshow. The IXC stock may trade low due to this wider macroeconomic issues, but the business itself is top 5% to its peers merely from the fact of having no future funding requirements and that if the trial is a success having close to immediate revenues and default alive status via Peptron manufacturing contract fulfilling demand on potential FDA approval. Just pure luck it has panned out this way, alongside strong management conservatism.
IXC Price at posting:
45.0¢ Sentiment: Buy Disclosure: Held
(20min delay)