I think a deal is the only PAR-related topic I care about right now. Holders, and the wider market, are desperate to see a partnership agreement with a third-party company willing to back PAR with their cash, to finance trials in return for sales and distribution rights, and ultimately a fat slice of future profits. If PAR cannot monetise their only asset - the supply agreement with Bene pharmaceuticals upon approval of the drug post-trials - the company and it's shareholders are face-down in the water. Alternative funding methods with lenders, or venture capital, just kicks the can down the road and threatens to dilute holders irredeemably. A partnership is needed to validate this entire company's value proposition to future investors, and to build a future which provides hopes of capital growth for shareholders.
Going into this year, the company sought clarity from the FDA on Phase III trial protocol, and was officially (in company presentations to the market, and at their own 2023 AGM) targeting a signed partnership deal by 30 June 2024. "Delays" to the company's own predicted timeframes of the FDA feedback meant the company had, once again, over-promised and under-delivered by forecasting a deal by that date. In a mid-year interview with an external company, Sharewise (and notably, not via ASX announcement), Paul Rennie subsequently attributed that missed target to partners wanting to wait for the FDA feedback, and ultimately, the opening of the Phase III trial / IND.
So, I thought it was worthwhile to go back to those initial predictions to familiarise myself with the wording, and where we had gotten to with a deal. I've transcribed what Beverly Huttman said at the 2023 PAR AGM. Regarding Partner due diligence...
"
It is a resource-intensive undertaking for companies, particularly where there's some financial risk for them in the form of pre-launch milestone payments. After a company has expressed initial interest and signed a confidentiality agreement, we share a document which contains sufficient detailed information for them to conduct a thorough assessment of the product, in order for them to prepare a business case and propose non-binding terms. This is the most resource-intensive part of the process. There may be rounds of questions, further exchange of information, and discussions of draft terms between the two parties. We currently have multiple companies at this stage in China, the Middle-East, and Latin America creating competitive tension which may help us to secure the best terms possible. 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. Now, once the company has validated their business case, we can then proceed to a binding offer, and final negotiation of terms. Many companies are currently reviewing the confidential information across a number of regions, and we are confident that at least one of these will proceed to deal by the end of June 2024."
- Beverly Huttman, PAR Global Head of Business Development, November 2023 AGM
Now, while the company ultimately failed in their timelines, there is a lot of encouraging information in that little speech - at least up to a point. "Multiple" companies had reached the confidential information stage - which meant that they had signed CDA's, been given an information document so that they could prepare a business case and prepare non-binding terms. It would be very helpful for shareholders to understand how many of these enquiries led to the submission of a business case, and non-binding terms?? In November 2023 "many companies are currently reviewing the confidential information across a number of regions" so did it all stop there? Did we receive any business cases or non-binding offers? How far did these discussions progress before things stalled in wait for the Phase III IND?
I feel this is pertinent information. Beverly was happy to lay out the below stages, and update us on where things were at in November 2023 - but I don't think we've ever seen this (below) slide again. I don't see any reason why we cannot be again updated on where interest has reached?
It might be that no companies have yet accessed the dataroom (i.e. our confidential information)? Does anyone with a line to the company feel that this a question which can be answered? On the face of it, it doesn't seem too bold a question. It just shows how in-the-dark holders are on this topic these days. If nobody has prepared a non-binding offer which meets the criteria of "terms that are acceptable to us" then a) there is an almighty way to go for a deal to be concluded, but on the plus side b) it's not dataroom information, confidential documents....such as supply agreement contract...which are putting people off. If they've stalled here, awaiting IND, then one could be confident that indeed business cases and non-binding terms could flow after IND - because why wouldn't they? They have yet to see anything in the small print that has their lawyers screaming 'abort!".
On the other hand, if anyone has reached the dataroom, then a) It's a worry because perhaps they have found something they do not like (e.g. the supply agreement, or something else) but then why would awaiting the IND matter if they'd found anything like that, and b) if anyone has seen the dataroom, we can infer that the company has received a business case and non-binding term sheet from a company which, crucially, include "terms which are acceptable to us (PAR)". This would really be worth knowing, no?
So, can anyone recall any presentations, official or with an interviewer, which talks about potential partners having access to the dataroom? Or is anyone in a position to outright ask the company whether anyone has accessed the dataroom yet?
Any other thoughts?
(20min delay)