By Seth Yakatan
In no particular order, two Chimeric Antigen Receptor (“CARs”) companies are seeking to go public, while Juno Therapeutics is signaling that it is filing a $150 million offering and Bellicum announced an offering for $115M. Too bad that we don't have any companies pursuing this pathway in the portfolio or we jump in on the action!!
Unfortunately, my friends at CytRx suffered a significant setback this week which is too bad for we believe this is a company doing good work. The geniuses at The Tufts Center for the Study of Drug Development created the industry standard on R&D budgets when it pegged average R&D costs at close to $1 billion for each new drug. Today, Tufts researchers updated their figures and boosted the total to $2.9 billion. I'm really glad that I'm not an academic.
I have not yet read the study or the publication, but that number is just staggering. It makes me think that anyone who can figure out how to repurpose a drug should allow Pharma to spend $2.9 billion and pick up as many drug candidates as they can for free.
I am glad that the executives at privately held Purdue Pharma can sleep well at night knowing they basically sell a legalized form of heroin. They announced this week that they got approval for a tamper proof form of oxycodone. I'm sure that no one who is an oxycodone addict is going to figure out how to use that drug in anyway shape or form.
Glad to see that the Valeant Pharmaceuticals International, Inc., (NYSE: VRX) and Allergan, Inc. (NYSE: AGN) saga has finally ended proving once and for all that the guy with the most money is, one, not the smartest guy in the room, and two, doesn’t always win. Too bad for me that activist investor Bill Ackman, of Pershing Square’s Capital Management Fund (Pershing is a BNY Mellon company) and Valeant made about $2 billion for losing.
How does this affect MicroCaps?
The market has been quite robust for biotech for the past 18 months, now some are struggling to get liquidity and deals done. Many mid-cap investment banks on the street seem now to be reticent to undertake deals, which even 6 months ago, they were drooling over. When the window closes and this round of irrational exuberance cools off, it is going to be a nuclear winter like one we have not seen before.
For more information about Seth Yakatan and Katan Associates, click here: www.KatanAssociates.com
Editor's Note: Seth Yakatan is a founder of Katan Associates and is currently serving as Vice-President of Business Development for Invion, Ltd. (ASX:IVX). Seth has been professionally involved in the biotechnology industry for the past 15 years. Seth, and his late father, Stan Yakatan, started Katan Associates over 15 years ago parlaying Stan’s work as a thought leader in the nascent industry from the late 1980’s to this year. Katan Associates provides strategic advice to leading corporate biotech companies. It’s early work with emerging growth small cap companies led to creation of the Technology Corridor of Southern California and continues to this day. Look anywhere in San Diego, Orange County, Los Angeles, Boston, Israel, Canada, etc., and you can see the work of Katan Associates.
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