@stockrock I believe MSB board should have had the insight to...

@stockrock


I believe MSB board should have had the insight to recognise the unsuitability of MNK as a potential partner and avoided entering into an exclusive period of 9 months to conclude a potential partnership.

After all, MSB board is comprised of many people with long and distinguished careers in the pharmaceutical industry. They should have known that MNK is not in the position to deliver the millions of dollars still needed to bring the programs to market.

MSB could have brought forward and increased the size of the rights issue to solve the liquidity problem at that time. With SI claiming that there were plenty of existing and new investors who were lining up to soak up MSB shares, I'm quite sure that the larger rights issue would have been just as successful.

I also disagree with your assertion that MSB is funded for the next 12 months. They've just borrowed money to keep the lights on and at this very point in time, I simply can not see how they are going to be able to repay the loan as there is simply no likelihood of significant revenue flowing in the next 12 months.

The best case scenario for MSB is to have a new partner who is willing to cough up hundreds of millions of dollars in return for some stake either directly in MSB or in some of MSB programs. In this scenario, MSB would then have the money to extinguish the loan. However, as existing shareholders, you are still likely to be subjected to significant degree of dilution.

The other thing that I don't understand is this, if your belief that MSB is on the cusp of breakthrough in various programs is correct, even if they don't want to become an active partner because they are not willing to fork out the money to bring the programs to the next stage, why won't a GIANT pharma such as Celgene just stay on as a MSB shareholder?

After all:
1. The size of their MSB stake is peanut to them. Cashing out their MSB investment won't make any difference to their financials at all. And yet, they still moved on.
2. Their MSB investment was well and truly under water. If MSB is indeed about to announce a breakthrough, they could have very easily recouped their losses and more.
3. By staying on as one of the major shareholders of MSB, they already secured a seat on the table which in the future might decide the future of a global leader in stem cell research. Why walk away from the highly coveted table now?

In my opinion, the answers to these questions are more important than all of the media releases and company announcements that MSB make.

Announcements can be written in various ways to make them sound exciting or promising, actions or lack of actions by a knowledgeable big pharma speak a thousand words because they are based on incentives to make money (or prevent further loss of money).