Where are we on a deal?, page-15

Thanks for this Mozz...


@Mozzarc This is really helpful, thank you. If a prospective partner has proceeded to dataroom access, then going by Beverly's own timeline, we must have already received a non-binding offer from them, and ticked the Board Approval box, before they got that access. Therefore, if we follow Beverly's accompanying commentary we can know that it's a serious organisation who have put together terms which are in the ballpark of PAR's valuations (albiet, completely non-binding).

"Once both parties reach agreement on the business case and non-binding terms, the potential partners are given access to the dataroom to validate the information and assumptions in the business case. In this way we limit access to our confidential documents to those companies who are serious about licensing the product, who have the capabilities to commercialise it, and who have shown willingness to engage under terms which are acceptable to us."

The fact that Paul said this at the last AGM (i.e. 2023?) which is the same AGM where Beverly provided this info, you'd hope this gives us a firm idea of where things truly reached. Unfortunately the AGM recording doesn't include the Q&A, but if your notes are accurate, it's pretty encouraging to know.

@kiwiinvestor Paul's comments to the Sharewise interviewer in July 2024 are, in my view, open for interpretation (to some extent). I can see why someone would have the impression that a partner is more or less secured, because he refers to "our partner" at one point. However, under the forward looking statements caveat, they've said all number of things so it remains ambiguous for me. Here's the full transcript of that relevant part:

"That's a very good question [why haven't we had a deal yet?] and, look, we do have interested parties who are starting to prepare term sheets. But, look, the reality is that if you're an investor, or you're going to invest a lot of money in a program, you're going to want to know that it's got clearance through the US FDA. Right? You're not going to invest in a program that's got unspecified delays. So, we're waiting for the clearance, as is our commercial partner waiting for the clearance, to be able to move forward and conclude a deal. That's why we do believe that the funds available from that deal will be able to fund the Phase III program. So, we do have commercial interest and I have to say, as a result of the conferences we've attended this year, we have commercial interest in South America which has been ongoing for some time but those investors also want to know that we've got clearance through the US FDA, same in China, same in the United States. So, we have 3 regions that we're currently looking to do a deal on, but I think those partners are - naturally - going to wait until clearance through the US FDA before they put pen to paper."

So, again, extremely encouraging language, with the hurdle being "clearance" to begin Phase III. So, get the revised protocol submitted, bite our fingernails for 30 days, and if no response, it should be go-time for deals.

Going by all of this, you'd have to conclude that we are all the way up to the Binding Offer square on Beverly's process map (below). Once the IND opens, you'd hope that a binding offer for some territory or another will be forthcoming and receive board approval. Definitely running out of time for this to happen in time for Oppies and 2024 AGM. Will we need some bridging funds from somewhere as Mozz has been suggesting? Maybe. I hope not. But ultimately, if a deal follows shortly afterwards it's not a disaster - after all, what's another small capital-management miss between friends?



@Friendsandco My initial reaction to the SW appointment was worry that it showed we had lacked commercial nous in the company right up until that point. In hindsight, I think we were possibly already down the line with a number of potential partners but management knew that this side of things was ready to ramp towards closing deals and maximising value. They also had a possibly deeply-concerned, maybe even disgruntled, major shareholder and public backer who they wanted to reassure. So, two birds, one stone. Bring him into the tent. The devil is often in the detail with big deals. The last yards in negotiations can have major repercussions and your team needs to be smart, tight, and be on-message with the envisioned future of the company. I think it was a good move to add some extra heft to the team ahead of time.