RE:RE:RE:RE:I see the Vetoquinol release
so let me get this straight....BNC had an asset generating $8 million per year in cash flow, but the company was spending $6 million per year in interest and $14 million per year in excessive spending/burning so was losing around $12 million per year in total. It has a very attractive phase 3 cancer drug with substantial upside, but had no way to get that drug to market because it had $60 million in debt and was losing $8 million per year and the stock was at .30 so they could never raise the money to pay off the debt or develop the drug.They have $20 million in the bank which they cling to for dear life. They look at interest expense and spend $10 million of that in the bank to pay off $10 million of the $60 million so now they have $10 million left in cash and $50 million in debt.
So they sell the asset for $61 million. They have a very good chance to reduce $20 of the remaining $50 million debt from government forgiveness. IF they can do that they can pay off all the debt and still have $40 million left over, and not have to spend the $6 million on interest anymore. Now they reduce the burn rate to $6 million per year, and have a very good chance to reduce the debt to $40 million.
This enables them to take this phase 3 cancer drug asset and develop it. What do other cancer drugs sell for in the stock market nowadays? Oncolitics trades at $160 million. That is the only other one in Canada I know of. I have read of a few in the $150 million range in the US.
So what if BNC traded at $150 million? That would be worth $1. Oh, but what about that $40 million in cash they will have after paying off all the debt and getting the government loans forgiven, oh that is another .30. So to be priced like its peers, BNC is no longer a mish mash of divisions generating small margins and going nowhere that have no correlation to each other. They are a cashed up pure play phase 3 cancer biotech company with an excellent prospect for a partnership to pay for developing phase 3 and enough money to last 8 years without having to do a financing.
And this is bad news?
You guys are nuts. I bet this stock gaps up around .50 and doesn't go much below it ever again. Let the process for another partnership for Urocidin begin now and by Christmas we should still have $30-35 million in the bank and hopefully get $25-50 up front, $150-250 in milestones and a $20 royalty on future sales, and a $1.25 share price for Christmas. I think this was a good buy today, a good buy tomorrow and a good buy all the way to $1.25.
Too bad for the guy who sold 90% of his holdings at .34 the last 3 months, except I don't believe he had any and just likes to complain on bullboards for the hell of it, or only had 1000 shares.