$45Mn Offering

[holdencf]

E2W said:

Dig, I don't know the answer to your question, "The question in my mind is will big pharmaceutical companies see 200 people being dosed with the IV version of DPC as enough evidence to spring for big upfront payments." However, getting "big upfront payments" from a preclinical collaboration does not seem likely to me and I did not understand that to be the "target" or goal that CA was discussing. A money raise is not out of the question, but the size and nature of the raise would depend on the type and nature of the collaboration. I would expect more potential income from a license, or a partnership, than from merely a collaboration, but one needs to know details of the deal.

Bold and italicized.  Do I even have to say it?  Are you kidding me?  Do you not know that collaboration, license agreement and partnership are all the same thing? The distinction CA is making is the stage of development; preclinical versus clinical.  Its right in the text!!!

Jefferies Analyst:
"Hi. Thanks for taking the question. I was wondering if you could give us any more color on what kind of qualities you would be looking in a preclinical partner? And if discussions continue to be ongoing for a clinical collaboration in HBV.
"

Partner, Collaborator, ARE THE SAME THING.

Thanks very much, Carmen,. So for a preclinical, discovery-stage collaboration, we are looking for a strong partner with a target that looks interesting to us. If it is -- if the target is coming from them. If we're talking about one of our targets, we're certainly interested in speaking with people about some of our earlier-stage discovery activities. So we really view those on a case-by-case basis. Regarding clinical collaborations, that is a match higher bar for us and I will tell you why.



We think we are building an awful lot of value with our clinical programs and while we're certainly happy to talk to companies about partnering on these, either geographically or worldwide, we take that very seriously and we view that as potentially strategically dilutive and so should those partnerships happen, we take a very close view at what the upside is for our shareholders. And so really, right now we are more interested in discovery-stage collaborations."

On the subject of whether DPC is ready for primetime, I think it is a proven delivery method to the liver only so far, but it is ready for collaborations and deals in which ARWR licenses it to a collaborator for use. It could be a two step process of first do the collaboration and show the utility of DPC, followed thereafter with a deal, such as a license or partnership.


No it can't be a two step process "of first do the collaboration and show the utility of DPC, followed thereafter with a deal such as a license or partnership."

ARWR is NEVER going to incur the cost of a collaboration to generate someone else's proof of concept.  Do you think Boeing would ever design and build a prototype plane before signing a design and development contract?  ARWR has completed its DPC platform.  If someone wants to use the delivery platform for an otherwise inefficiently or undeliverable drug, they will have to sign a license agreement before ARWR lifts a finger to help them (other than to sit down and discuss the project).  The license agreement will delineate exactly what the partner drug is and what the application will be (If the license is exclusively for humans, the licensee can't turn around and develop an application for farm animals or pets.  Once a License Agreement is signed a collaborative/partnership agreement will be signed that will state exactly what responsibilities each party has under the Agreement and what each party pays to the other and when for the above delineated services and achievements.

Another shining example of pathological posting.  The list goes on and on and on and on and on and.......

E2W...Just stop posting on this thread.  Start your own thread.  I promise you won't hear a peep out of me on any thread you start.  

[Think2Succeed]

For those who don't know the weight and quality of our recent private investors here's a few highlights:

Orbimed Advisors is led by Samuel Isaly and is the largest healthcare dedicated fund with assets in excess of $15 billions !

Perceptive Advisors is led by Joseph Edelman and it manages a fund with $2 billion in assets. It was the TOP biotech hedge fund of 2015 per Bloomberg : www.insidermonkey.com/blog/top-biotech-picks-of-best-performing-hedge-fund-of-2015-435499/ and a coincidence or not but they also have a MONARCH butterfly on their website : www.perceptivelife.com/our-dna/

RA Capital Management is a biotech hedge fund led by Peter Kolchinsky and it manages about $800m. Kolchinsky is a very smart guy with a PHD from Harvard in Virology !! You can bet this guy understands how ARC 520/1 works and its chances of success if he invested in it. His fund was also long during ARWR's first run to $28 but sold with everybody else when the company didn't achieve 1 log from its initial 1-2mg/dose results.

These hedge funds have lots of informational power and connections and once they give the green light to a small bio like ARWR other big and smaller hedge fund follow as well...just at it happened here during ARWR's first run to $28: www.insidermonkey.com/blog/ridgeback-capital-follows-steven-cohen-into-arrowhead-research-266730/

Longs should buy more here while the price is still near their initial investment (btw they often add to their positions) while shorts should start covering fast before they lose the grip completely.

T2S

[end2war]

T2S, That is very helpful information to know, as I personally view the buy in as an endorsement and anticipate more Tuts will follow suit: and, incidentally, that bit about the Monarch butterfly "coincidence" may just signal some larger cosmic clue that reductionist thinking will miss, but it is somehow part of the big picture. Thanks.

[mudbug021]

Aug 9, 2016 14:19:39 GMT -5 end2war said:

I guess if you read the entire PR, "the Company" might refer to ARWR, not the buyer of the stock, in which case, I am jumping to the wrong conclusion. It could be multiple buyers, the PR is ambiguous. If they meant ARWR when they wrote "the Company" why in the hell didn't they say so, LOL.

They did end2war, from the last 8-k filing:

Item 3.02 Unregistered Sales of Equity Securities.
On August 8, 2016, Arrowhead Pharmaceuticals, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain institutional investors (the “Purchasers”), pursuant to which the Company agreed to issue and sell to the Purchasers an aggregate of 7,627,119 shares of common stock, $0.001 par value per share (the “Shares”), at a purchase price of $5.90 per share (the “Offering”). The aggregate purchase price to be paid by the Purchasers for the Shares is approximately $45,000,000, and the Company expects to receive net proceeds of approximately $43,200,000, after deducting commissions and offering expenses. The closing of the Offering (the “Closing”) is expected to occur on August 11, 2016.


This is common language for filings. The reason for this is to help eliminate confusion, possible clutter and/or shorten the document. This in general is lawyer speak to simplify the understanding of what and who is being referenced too. Basically a legend of sorts.  

Also note, when another company is referenced too, the specific company name will be given. Again this is to eliminate possible confusion.

[end2war]

For those with a possible interest in how to interpret CA when he spoke about "collaborations" or "collaborative agreements", you might wish to search ARWRs SEC filings, such as the latest 10Q or 10K documents on those terms, as those terms appear in the SEC filings because they are connected with a range of possible deals, not just Licenses or Partnerships.

Here is one example from the latest 10K:

"We have focused our resources primarily on the DPC™ platform and on advancing our proprietary DPC™-enabled RNAi therapeutic candidates through clinical trials. Additionally, with our increased R&D headcount, Arrowhead now has the infrastructure, expertise, IP portfolio, chemistry, manufacturing and control (CMC) capabilities, and management that we believe is necessary to support potential partnerships and research collaborations with large biopharma companies from discovery stage through commercialization."

It also is worthwhile to look at the Roche contract for how those terms are used as some definitions of "collaborations" identify types that are not subject to the ROFN, in the sense that they don't have to be offered to Roche first, and others are subject to it.

When ARWR set out its goals for 2016 and stated they were going to seek at least one "collaboration" in 2016, they did not define which type they meant, and I don't think CA did so in the CC section I quoted, either.

While the term collaboration can be used interchangeably in some contexts with Licenses and Partnerships, those are more nuanced terms that can have different meanings depending on the context. I would not be too quick to conclude these terms were used interchangeable in CAs comments during the CC.

If someone has a special relationship with CA, they might ask him what he meant by a pre-clinical collaboration, and whether he had onlyh licenses and partnerships in mind, or something different, such as an experimental collaboration or a developmental collaboration.

In reviewing the use of those terms in the SEC documents you will find some concerns expressed by ARWR about collaborations that necessarily disclose confidential information to the collaborator. When you get to thinking about that problem, you might come to an understanding why they are looking for pre-clinical collaborations, or at least what one of the issues might be in trying to do a collaboration with ARC-520 at this early juncture in the experimental work.

[watopguy]

Holdencf,
thanks for the extended reply.  I'm glad you'll still be participating "in this thread" = maybe I'll just keep this thread going so you can't leave !!?

So, a few quick comments:


There's probably a negative pejorative to "paint themselves into a corner" - but I think the point was - surprise that the amount of the PP was so relatively low when it had been fully subscribed - therefore not giving themselves too much time - conclusion has to be management confidence;

If we conclude that management has seen any offers for 520/521 then they must have to use your term - flipped the egg timer with Roche and were similarly disappointed in what they were offered from them - that's disappointing;

I found the "grace-period" for the PP investors to receive acknowledgement that the Company has material information that has not been revealed to the public, curious.  Is this unusual?  I wonder if it's the sort of clause that gets added during negotiations - we want a seat on the Board.  Nope, can't have it.  We want your hat.  Nope, I like my hat.  We want a heads up that you've received material information, good or bad.  Uh, ok.

[holdencf]

watop
Disappointment comes in different shades. I knew Roche would never step up to the plate with a serious offer. How? They are Europeans. More specifically they are Swiss. What position did Switzerland take in WWII? Do you need to know more? Why swing for the fences with a huge offer that may cost me my very lucrative job. Not a European mentality. JNJ and GILD are the American cowboys. Just a question of more data.

The answer to the above paragraph 5 is that when an investment bank does a PP, they need buyers. Buyers have to be sold. Bankers operate under the "feed em' what they wanna eat," rule of thumb. Since Canter's research analyst hadn't yet published research, I suspect the bankers asked him what he would need to sell the deal. I am sure he gave them a shopping list. They approached management and served up the list. They had a discussion about what would be provided and what could not. Much of the information would be material and non-public. Thus the need for an NDA.

This is a fairly standard process because what the analyst, bankers and capital markets desk need to sell a deal is information that has not yet cleared the market. Why? Because Orbimed, Perceptive, RA and Baker Brothers, etc... know more about this company than everyone on this MB combined and yet they are not enticed to go out into the open market to buy registered shares. And yet, they bought unregistered shares (liquidity risk) at the market price. Why would they do that? Must be because they have a greater level of confidence than the "market" that the company will be able to get products partnered or to market. To gain that level of confidence (via asymmetric information), they must first sign an NDA. I suspect the duration of the NDA matches the expected time it will take to register the shares. There is a legal definition concerning when information is "stale." When information becomes "stale" is open to interpretation but after 60 days or so the entire landscape might have changed so the info would be stale at that point. Unlikely (but possible) the registration statement becomes effective in that time frame.

Anyway...this deal with these players gives me all the more confidence in what I already know which is that DPCs work and, are safe and that the drugs ARWR has in the clinic and in its pipeline are all blockbusters and will be commercialized. Fifty scientists with insider information just reaffirmed my conclusion.