3 years ago BOTA could have negotiated a ROW deal, or an outright sale of the company, with big pharma from a position of strength i.e the LANI compound and 230 million to throw into the bargain. That partnership would be much further along because a large organisation could move more rapidly with trials and it wouldn't have wasted a year moving stock exchanges. If BARDA had pulled funding from Daiicihi Sankyo, what impact would that have had on BOTA? Zip. The Board thought that 80% of the return for 100% of the risk seemed a good deal with the BARDA grant. But the risk calculation was wrong. BOTA's a Cessna not a Jumbo. Losing an engine, no matter how improbable, has different effects.
BOTA will now be negotiating with medium pharma from a position of weakness: no ability to fund and a ticking patent clock. Cap in hand. LANI must go to Phase 3 by Southern Hemisphere 2015 as planned. I know it, and any potential partner knows it. 80 million in the bank doesn't help in that context.
Phase 2 should be positive, but the results are 2 months away. Selling with Phase 2 is (a bit) better than nothing.
But if the BARDA termination has to do with a negative attitude toward NIs from FDA it's bad news from a partnering point of view. The 'best' we can hope for is that they thought the company was mishandling the grant.
BOTAs recent capital raising introduced fund managers that, after the reasons for termination are released, aren't likely to back BOTA now for full funding of Phase 3. Trying would be nuts.
The Board is meant to assist the company as well connected experts. None had any inkling of a change of heart at BARDA. And none could do anything about it. They need to do some work now.
Disparate and small Australian shareholders are easy to push around. Burning US hedge funds' cash is a little harder to hide. The Board needs to express something other than surprise.
Sadly, the only option appears to be to sell or merge the company's assets, even though those enterprise assets are currently valued at almost nothing. Only hubris can get in the way.
This is a failure to commercialise an excellent drug. It's a painful irony in the face of so many examples of successful commercialisation of worthless or dangerous drugs.
Barda was the only upside surprise this company ever delivered. It now joins the rest of the wrecks on the downside surprises.
Other notes
Barda were the ones who sought testing for an 80mg dosage - there was no need to introduce that into the clinical trial mix. Testing only 40mg would have meant an adequate number in the current Phase 2 trial.
Barda's explanation for the termination will make compelling reading.
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