Normally I pride myself on being reasonably thorough when I comment on a company. In this instance (my prior post), I was sloppy and I apologise, I did not look closely at the other ASX disclosures around the deal and missed the Appendix 3B filing. I will not make excuses but I figure if paid-up analysts are allowed to retract shoddy research, I should be allowed the occasional screw-up.
Besides, I get a couple of thousand views a week, which keeps me in line, pretty much in real time. Thank you.
The truth is, all the accusations of unnecessary negativity and bearishness that I receive every week, are pretty unfounded. In fact, it was truly with rose-tinted glasses that I read the ANP press release because I was focused on understanding the valuation of the transaction with Cortendo, not the valuation of the company. In a way, my mistake is forgivable because I was looking for payment for pipeline, and so a cash/stock deal seemed to fit, if a little odd perhaps for a licensing deal (though perhaps not for a small-cap company with limited financial resources).
Given that I was dead wrong on the equity part, I need to correct my 3rd point (only my 3rd point). Unfortunately, I can only adjust the tone of my sentiment to a limited extent because I now like the deal even less than I did before. The equity in a public company is always up for sale, that’s the whole point. The implication of an equity investment in Antisense Therapeutics as part of the Cortendo deal is that they gave up unnecessary value in a negotiation in order to facilitate the licensing deal. Quite frankly, no public company should ever use ownership as a tool in a partnering negotiation – it’s a betrayal to existing shareholders.
If Cortendo wanted to have a strategic stake in ANP, it should have been decoupled from the licensing deal. In my view, the worst licensing deals or co-development deals are when your partner also becomes a shareholder as part of the deal. No matter what sophistication a strategic investor may bring.
So… ANP shareholders should be irritated with me for messing up part of my last post. But you should be more irritated with ANP’s management for complicating an asset partnership with equity ownership.