GREY:BIOAF - Post by User
Post by
prophetoffactzon Jan 16, 2023 9:53am
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Post# 35225395
Lessons learned:
Lessons learned:What lessons have we learned?
The biggest reason often cited for business failure is undercapitalization. Given the nature of biotech with its high burn rate and long time horizon to cashflow undercapitalization can be particularily risky; particularily due to the very fickle nature of financial markets which can be 'on' or 'off'. Generally two years worth of cash and no debt is the gold standard in biotech to cope with all of the financial risks. Being a severely undercapitalized preclinical company, not in control of its own story, and with significant debt in the worst biotech market in history, is the worst of all possible worlds; especially with partners sworn to silence.
When Mark Day couldn't raise the US$10 million to properly capitalize the business, list on NASDAQ, and let the company control its own destiny that pretty signalled the end of it for shareholders looking back at it. Hutchison couldn't get it done either. We had confirmation of a serious problem with Mark Day.
Rathjen also tried to raise money and couldn't properly capitalize the company either further confirming BTI's financial predicament. BTI couldn't control its own destiny. NASDAQ was dropped from BTI's ambitions. Rathjen was also forced to swear off dilution according to jd handcuffing her to a permanent state of financial emergency and a stock few would touch because of it. The company and its shareholders were living in state of denial not with a properly capitalized business plan that could move forward.
The company lived a hand-to-mouth financial existence, in a state of permanent financial emergency, couldn't advance to an IND, and took on increasing debt thereby living off its credit card, in a sense. The markets also went very fickle as we entered the worst bear market in biotech history. The Crecense deal was tried to transform BTI to a clinical stage drug company and an option with J&J was signed, etc.; but a company with a long history of being unable to properly capitalize, not in control of its own destiny, with increasing debt, and in the worst biotech market in history was not interesting to the market.
Like a cancer patient who ignores the early warning signs BTI's financial emergency grew worse. It often takes a crisis to shake people to do what's always been needed for their proper health. Forced to bite the bullet once and for all BTI is only now trying to pay off its debt, properly capitalize, create a more advanced company of interest in today's market, and pay off Ladenberg Thalmann for the assistance in helping raise the US$10 million Mark Day needed long ago with interest, in a sense.