Isotechnika Pharma Inc IPHAF

RE: THE DEAL

[macbethorfaust]

Here in a nutshell is the deal. 

Palladin gets:

1.      Canadian (and other small markets: South Africa, Israel, Mexico and Central and South America)  rights to voclo for all indications (other than Lux and Atrium).

2.      The Hellikit diagnostics

3.      19% of the shares in New ISA

4.      12% of New ISA royalties on the remaining world wide rights retained by new ISA

5.      12% of New ISA royalties and milestones under the Lux deal

 

New ISA (of which we own 81%) gets:

1.      A cheque for $7M (probably $6M net after the smoke clears) and another $4.35M over 12 months.  Also New ISA will be debt free.  ISA management says this money plus other remaining cash is enough for us to survive 18 months or more under current business plan.

2.      Worldwide rights to voclosporin in perpetuity (except for the small markets above) subject to Palladin’s 12% cut

3.      The Lux deal in perpetuity (subject to Palladin’s 12% cut)

4.      30% of what Palladin earns from its small market sale, for 7 years.

5.      88% of the Hellikit sales for the next 7 years.

 

Definitely the deal makes ISA worth something.  Looked at from where ISA was a couple of years ago this is a sh*t deal.  Looked at from where it is today it is an excellent deal.  If you are in recently the upside potential is huge.  If you are in at $4.00 harder to say – I would say that if things happen the way they should the long term prospects of getting your money back and even some reasonable profit are quite reasonable.  The problem is that I suspect that if things do go well someone will take us out before we reach that point.  I mean I don’t know, but if things go as well as they should I don’t see Palladin being content with just its 19%