NB caution !! ... I only keep these preliminary notes on my website so I don't lose them !
Thinking about Evolution & Economics and Some Notes on the Natural Selection of Ideas
Part 19 - I Want so much to Live - Human Ignorance & Learning
Trials & Errors of BioTech
Now Xenophanes said, and we agreed with him -
'The Gods did not reveal, from the beginning, all things to us, but in the course of time through seeking we may learn & know things better. But as for certain truth no man knows it, nor shall he know it, neither of the Gods nor yet of all things that I speak. For even if by chance he were to utter The Final Truth, he would himself not know it: for all is but a woven web of guesses’
In 2006 JJ went for gold and joined the biotech industry just off Silicon Valley in the sun, sand & surf of Californian where he discovered real wealth from proper science.
He also met up with horrors of the 'Washington Swamp' which could lead to tragic events amongst the bribery & corruption on the Belt Way.
Then there was the intrigue & folly associated with how best to fund the impossible gaps between up front costs and eventual revenues from sales. A frantic frenzy of financial & bureaucratic kludge in the mad world of exorbitantly costly regulatory oversight?
And along the way he bumped up against lytics Patent Law.
4 fascinating case studies -
1. I want so much to Live - a story of the creative people and the science behind Herceptin.
How do companies continuously innovate?
Genentech was founded in 1976 and spawned an entire industry. Anyone who was anyone in Bio Tech had been in & out of Genentech.
2. Suicide on the Beltway - a story of the Washington swamp.
How do the politised Laws of the Land drain the swamp?
Checks & balances, separation of powers, bills of rights, term limits, second chamber?
3. PhaseBio and Bentracimab - a story of risk finance as impossible gaps got bigger!
How do start up companies fund the impossible gaps?
Claris was founded in 2005 and became Blackstone Life Sciences in 2018 -
'Successful Biotech companies soon outgrow Venture Capital funds, and need serious money to run late-phase trials & regulatory costs. Typically they either go public or seek a partner to shoulder some of the financial burden'.
Big Pharma has the same funding hole, more late stage prospects than they can handle.
SFJ was founded in January 2009 - 'premise that there was a better way to fund and conduct clinical trials globally'. Investors in SFJ Pleasanton Pharma Ventures, Blackstone & Abingworth.
PhaseBio Co-Development Agreement 9 Jan 2020
Going Concern Notice 24 March 2022
Programme Transfer Agreement 21 Sept 2022 ... following 180 day cure period
Chapter 11 Bankruptcy - 'Hail Mary'
The proposed bidding procedures, if approved by the
court, required interested parties to submit binding offers to
acquire PhaseBio’s bentracimab program assets, which would be purchased free
and clear of liens and interests.
Chiesi 'Stalking Horse Bidder' $100mn plus cure amounts plus liabilities plus consideration.
Break up fee $2mn + $750,000 expenses.
All bids required SFJ to waive the terms of their co-development agreement.
PhaseBio supported by JMB Capital Partners with a financing commitment of $15 million. Providing sufficient liquidity to conduct business in an uninterrupted manner, fund its Chapter 11 proceedings, including the sale of its assets, and to continue to meet its operational and financial obligations.
Berkeley Research suggest the Hail Mary
Gordian Group - experts on equity & debt
Stalking Horse - Chiesi Farmaceutici $100 million
DIP loan - Miller Buckfire Investment Bank $32.9 million
Court Case 13 Dec 2022 ... prior warning 'court judgment was a 'blunt tool', issue cries out for negotiated agreement'.
Was PhaseBio a going concern? Did SFJ have a valid claim? Debt or Equity stake? Bentracimab ownership? Trial Data Package ownership? Ownership of other assets?
(Enterprise Laboratory Platform (ELP) polypeptides?)?
Settlement & Transfer Agreement - 13 Dec 2022 terms agreed for completion by 31 Dec 2022 ... just before court proceedings commence.
i. owns the Trial Data Package
ii. holds an allowed secured claim in the amount of $120 million
iii. acquires the Bentracimab Assets free and clear in exchange for -
(a) satisfaction of the SFJ Secured Claim, plus
(b) payment of the SFJ Consideration (as defined below) and the other consideration set forth below, plus
payment of the Cure Amounts in connection with the Assumed and Assigned
iv. upon the closing of the Transaction,
(a) releases all security interests in the Debtor’s remaining assets (those other than the Bentracimab assets);
(b) releases and waives all claims in the Chapter 11 Case; and
(c) dismisses with prejudice its Counterclaims in the Adversary Proceeding (with the Debtor’s Complaint to be dismissed with prejudice) and its action pending in the U.S. District Court for the Eastern District of Pennsylvania
Consideration - $32.9 million to repay the DebtorInPossession finance, Stalking Horse costs, Bentracimab costs (excluding BioVectra) and wind down of chapter 11 plan.
SFJ will negotiate a new BioVectra contract, pay all outstanding Bentracimab related costs,
and pay Cure Amounts to cure any defaults ...
and 2.5% of world wide net sales > $300 million pa
and $2.5 million for authorisation of FDA communications
and employment of certain identified employees
and no disparagement
4. Lytics Patents - another story of risk finance.
How do companies protect intellectual property rights from thieves?
'As soon as there were stocks there were thieves'.
Bill Anderson, 'where do I sign'?
back to some fun