I listened to the call, my impression of the call were as follow:
Cypress Bioscience (CB) thinks the Indaflex product is promising, certain amount of additional phase II work has to be completed before they move it to phase III, CB intends to pursue this product, although, there is a likelihood that it will be licensed or sold to a larger pharma company because this type of product is marketed via larger physician population. The valuation of the deal is based on $37.5 Million being for the diagnostic products instead of therapeutic products including Indaflex. Clearly, the $20M future milestone payment relates to Indaflex. It was commented that the value of products that are in the future are heavily discounted because of the risk, and as a result, there is big upside for the acquiring company. In addition, it was commented that CB has good experience in appropriately designing the appropriate clinical trials to properly define the end points, and CB will only, advance products to phase III once they are very comfortable instead of rushing in and possibly not doing it right.As to the cash, the company should have about $144 to $145 million after paying the $37.5M payment for the acquisition. The run expenditure expense including the incremental expense as result of the acquisition for the current year is estimated to be about $20M this includes work on the Indaflex product. It appears to me the company has quite a bit of cash to make good progress on the clinical products including Indaflex. The CEO of CB also said that, he hoped they have proven in the past how expeditiously the company likes to move. Finally, the company acknowledged the fact the obligations to AlphaRx have been assumed by the Company.
I just hope they move forward quickly on Indaflex!!!!
