RE:Some very interesting readingIt's hillarious that hopeforthebest is finally figuring out that building a biotech company is very risky, can burn a lot of cash, and the risk and cashburn can require share roll-backs; especially in the worst biotech bear market in history. His understanding is a first step to uderstanding Gilles genius with CZO. Gilles built a profitable base business to finance the development of a cash burning and risky pipeline. This helped limit the number of CZO shares that have needed to be issued. With the cash burn and clinical trial risk of developing AEZS's diagnostic virtually eliminated this asset is now expected to generate material cash. Combining the revenue from CZO's base business with CZO's near-term revenue generating opportunities that will be fueled by AEZS's capital and the revenue from AEZS's diagnostic Gilles has the objective creating a self-sustaining company.
News release:
"The combination is attractive for shareholders of both companies, as it is expected to create a long-term sustainable business, which is optimally positioned to deliver value as the biopharma sector recovers from its current levels."
By combining AEZS's and CZO's pipelines the merger further diversifies pipeline risk over additional assets. AEZS's pipeline has been groomed over time and the hyper-risky preclinical phase and associated cash burn is essentially behind it. It is now onto human clinical trials and a potential acceleration in value accretive milestones. Risk management of the pipeline can further be managed by partnering assets. Human data can allow for material partnerships. Lastly, Gilles is acquiring AEZS's assets below cash. The biotech market has materially recovered since the merger was being put in place. As what Gilles knows about the diagnostic deal and pipeline advance into human trials the move in the share price could be significant. H.C. Wainwright has a US$15 target for AEZS.