No more clinical trials neededThis is so different from what we were expecting, it's hard to get your mind around the implications.
For BNC, it means no more money to spend on clinical trials. In fact, we may have enough cash in the bank to get us through to the marketing stage. That means no more dilutive share issues. It also means a stronger bargaining position vs potential partners.
For Potential Partners, it means no huge up-front money needed. Milestone payments only upon successful completion of steps means dramatically lower risk. Palladin signed up for $16m to get marketing rights to Canada/Mexico/South-Africa. This represents 5% of the world market (per a Bioniche newsletter about a year ago). Therefore the world total would be worth $320m milestone payments. With this risk profile, I expect there will be some competition to be BNC's partner. Therefore they will have to pay more than Palladin, who signed their deal when BNC was in financial distress.
For Endo/Palladin, it means a sinking feeling. They spent over $100m on a clinical trial which is no longer needed. They also have only 5% of the world rights locked up. It would be awkward if another company got the US market rights while Endo held only Canada. Its a tail and dog thing.
For everyone, it means far fewer years in their Discounted Cash Flow models to value their investment. Closer-in cash flows mean bigger present value.
Bottom-line, I expect a hostile takeover offer for BNC in the next 30 days (most likely from Endo). Why pay $320m of milestones (= $2.30 per share) for marketing profit but not manufacturing profit, when you can buy the whole company for under $50m at this point. I would be astonished if anyone signed up to be a partner when they could buy the whole company for far less.