Comment by LeanderK
what am I missing? Isn't this good news (the positive phase 2 results)?
what am I missing? Isn't this good news (the positive phase 2 results)?
Phase 2 is not a slam dunk. Much more work remains, and under the guidance of a CEO who has zero drug development experience and a track record of management incompetence:
- lying about growth
- pushing out the cofounder
- never making a profit
- hack that went undiscovered for months
About the only area she's had success is raising money and that's in large part thanks to being a member of the Silicon Valley elite.
Mathematically, the chance of a drug going from phase 2 to phase 3 is roughly 30%
This can be modeled with a binomial distribution as 1-probability of both failing. That comes out to 1-(.7^2) which is 51% of at least one drug reaching phase 3.
There is literally a coin flip chance the company will reach the stage where there is another coin flip it will be worth billions (I believe ~50% of phase 3 drugs go to market), but thanks to the messaging of the CEO, right now it seems like there is a near 0% chance investors (which include former company employees) would benefit from this.
The board is making it clear that they don't think the CEO/largest shareholder is making good on their duty (as CEO) to the other shareholders.
"Good luck ......" or so.
Yes, but the CEO was trying to take those profits for herself by biding to take the company private, which the Board of Directors refused to put up with