RE:RE:RE:RE:RE:RE:RE:Merck buys Velosbio I think given the cost of the cancer trial, they will get a lot more value post any kind of human trial. There's the obvious risk of failure, but as we've said, this is not about the chemo agent being used, it's about attaching to the SORT1 receptor, internalizing it, and seeing the toxin work. That seems to be a lot less risky kind of trial in my view. So to get the best value they should wait.
They should also just license out the two they are working on now and not the whole platform. Seatle Genetics (SeaGen) is doing it indication by indication it seems. That looks smart to me as a way to maximize and also get the right sales partner for each. So there's really no need to partner for the whole platform or even the whole company. There may be someone better in TNBC and Ovarian versus Lung or Colon. Also, remember I found that article that said SORT1 overexpressed in leukemia too.
I know Boards want to see a financial path out 2-3 years and that encompasses the cvt bond coming due. But they do have a bit of time to learn things first and get it all lined up. There's no debt due until 2023 and the cost of oncology trial is low and they have the cash for the NASH trial for first 2 years (most costs will be in year 2 post-signing up patients). So they can go for a while without worrying too much. Costs are under control and they have revenues to pay for a lot of the ongoing SGA. I'm sure they hope they can see in the next 12-18 months whether the bond will convert. If not, in 2021 or 2022 when you start thinking about financing, you would obviously include the bond payoff if it's not over the convertible price and if you do a deal early you could even tender for them or just buy them in the market if they're below par.
I guess my point is you do have time at this point. Time for more information and time until any debt is due. Having any kind of data on the human trials would be most beneficial for getting the proper value for the initial SORT1 indications. But keep your hands on all the other indications. No need to give them away for nothing.