Yet Another Value Podcast - A threesome so nice, we did it twice: talking $BMYRT with Matt and Dan (again)

Episode Date: October 8, 2020

Our first threesome was such a success, we decided to do it again! Dan and Matt come back on to discuss all of the updates on the BMY CVR since our first post; in particular, we discuss Dan's due diligence that suggests an FDA inspection is on going. PS- CVR's are risky and nothing on here is investing advice.You can find our first threesome here: https://twitter.com/AndrewRangeley/status/1305835912975261697?s=20My updated take on the CVR here: https://yetanothervalueblog.com/2020/10/bmy-cvr-an-inspection-inflection-bmyrt.htmlTwitter handles: Matt: Given2Tweet (https://twitter.com/given2tweet)Dan: Sheep of Wall Street (https://twitter.com/Biohazard3737)

All right. Hello and welcome to yet another value podcast. Today I'm excited to have my first return guests, Matt, Matt Turk and Daniel Snigberger. How are you guys doing? Very well. Thank you. How are you? It's been an adventurous 24 hours. Great. Well, hey, I'm going to start this pod the way I do every pod and that's by pitching the two of you again. But, you know, given we're going to talk about the CVR again today, I'm just going to start this up front with the disclaimer. You know, nothing on this pod is investing. advice. No one should rely on anything in this pod. And CVRs are extremely risky. There's a real chance of zero here. So that out the way, let me start by pitching the two of you. People can go back to the

first pod for the original pitch, but I'm going to update it a little bit since September 15th. You know, Matt, I'll start with you. I think of you as the Kim Kardashian to my, to my Paris Hilton. You know, you come on my podcast one time. We do a threesome together. We post an interview. You're just going off to wild success in the YouTube world. You've got your own channel now. I'm just so proud to be the Parasultans to your Kim Kardashian. You're still in royalties, aren't you, Andrew? Maybe at some point I'll put it to X on you, I'm fire. And then, Dan, more seriously, you know, the work you've done on the CVR the whole time has been fantastic.

Both of you on the last pot, I got so many comments on how deep and how good the work you were. But what we're going to talk about today, the work you did on this check, it's one of the best checks and edge I've ever gotten. So it's creative. it really speaks to how much work you're putting into this. So, you know, I think it's awesome. So that pitch out the way, I'll turn it over to you guys, and especially Dan, you know, we talked about the CVR September 15th, that it was around $2 per share. Today it's around 3.30.

What's happened since the last time we talked? Sure. So I think the big question of the CVR has always been, or, you know, at least in the last two months, has been whether or not, the FDA will be able to inspect those facilities for approval. It was very clear from all the communication from Bristol-Myers that this was the main risk, that the review was going well otherwise. And, you know, the other reason why this is so important is that we've seen from the

Bayamarin, PDUFA, and CRL, that if the FDA doesn't plan to approve a drug, they don't inspect in this environment, you know, amid this pandemic. So knowing whether or not those facilities get inspected became very, very important to the whole CVR story, right? And it's not just about the one-day move, but for me it was always clear that this would be a security that would be very, very hard to own going into October, going into November if you don't have clarity on the inspections. Right? That's why I thought it would be so important to know. And again, it's not about the pop. It's not about the move from, you know, to 60 to 70 to $3.30. It's really important for us, you know, how can you own the security in size going into the Liza Selper? If you don't know, you know, where those plans got inspected or not. And, you know, we started thinking, about this, how can you approach this problem, right? And, you know, we had this hypothesis that an FDA inspection would be potentially, you know, we potentially would be able to identify FDA inspectors on the parking lot just based on patterns

if we observe, because employees would usually arrive in their car alone. So we also observed that June employees would, you know, dress very, very casually. They would usually wear t-shirts coming to work and, you know, potentially also arrive at different times. So this was our hypothesis. Now, how are we going to do it? You know, we looked at different options. At some point, you know, we became creative. We even thought about there's a fire department right next door.

So we were thinking, you know, can we ask those guys to attach a camera to their building to, you know, monitor it remotely? We were thinking about some kind of contest, you know, like for the firemen, you get $10,000 or $20,000 reward if you, you know, bring us proof. But then I sort of thought about the risk in that, you know, we didn't want to create any kind of difficult situations either for Juno or, you know, for the firemen. And so we found another plan and we had somebody watch the facility actually or the parking lot from a public road for the last two months and, you know, the hope that we would be able to identify the FDA once they show up. And it was a very interesting process. We didn't know what the outcome would be here.

But to us, it was always very important to, I think every time you do a research project like that. More broadly, the most important thing is to do it in a way, you know, that's ethically and legally crystal clear. You know, you don't want to get into any kind of gray zone. That's why we also made it very clear that we would never, you know, talk to junior employees, for instance, because we just didn't want to get in any kind of drone. Okay, so we are watching this parking lot from a public road. And, you know, this is something that anybody can do. And as a matter of fact, I think we were first on site, but in the last few weeks, there were at least three crews,

or you know, two other PIs watching that parking lot. So it was, we were not the only ones having that idea. That's phrased it that way. So what have we observed? We were tracking patterns for quite some time. So we had a database of, you know, license plates, for instance, so that, you know, when a new car would show up, it would be able to quickly check whether this is a car that's new or existing.

And, you know, that was very helpful in finding this. And what happened yesterday is that, you know, we had a car show up that has never before been on that parking lot. and we had two people in that car, dressed business casual. They parked their car on the lot. They went to the trunk, you know, opened that trunk and got two suitcases out of it, which, you know, we've never observed before from any kind of, you know, drew an employee.

So at that point, we were on high alert. And then, you know, we had a private investigator run the license plate and came back with a name. And, you know, it is one of those names where when you type it in into Google, the first thing that pops up is the LinkedIn page of a FDA inspector. So, you know, at this point, to me, it was proven beyond reasonable doubt that. that the FDA was there. And I also, you know, got, I also heard from indirectly from one of the other teams that were on side. I think they didn't spot the FDA, but they spot senior Bristol Myers-QC people on site.

So, you know, everything lines up at that point. So we were very certain that the FDA inspection was actually. taking place. And I should maybe add to that, you know, everything also lines up because actually one of the first signs that we were watching for is they had those two visitor parking spots right in front of the facility and they had covers on them that said open parking okay and they were there for I mean all the time for for six weeks we never saw them remove those covers so the first sign that we observed early last week is that at some point those covers got removed okay and we always

thought that this would be one of the earliest signs that the FDA you know that an FDA inspection might be imminent okay and And I think this is one of those things that's probably very sensitive, but it's not very specific, right? I mean, they could remove it for a number of other reasons. But that sort of put us on high alert. And then the next thing that happened is that CFTN article came out that said, you know, there's no inspection schedule yet. But, you know, here's the plan, how they're going to do it. It's going to be a local inspector that goes there and somebody from SEPER will be on the phone.

and, you know, to me, everything makes sense. Maybe at that point in time when the CFTN article came out, which, by the way, I know they don't have a great reputation, but, you know, I think the article itself, the content was very credible. It was all lined up. You know, at that point, maybe the inspection wasn't scheduled yet, but we were in high alert watching out for this.

And, you know, I think yesterday, you know, what we were waiting for happened was, a local inspection team. I should also say that we were able to find the owner of the car in the FDA employee database. He works for the Baffle field office and is a very senior inspector there. My favorite part of the story is if we didn't have the CTFN article, we would have almost assumed with real certainty, I think, that it was going to be a rental call. and somebody coming from Maryland.

So, I mean, yes, I'm sure Dan would have ran the plate, but I wouldn't have thought there was a very high probability we would have gotten anything back on the plate. I wouldn't have thought it would have been a local person's car. You guys are truly doing spycraft out here. Let me, Dan gets all the credit for this. I told him, I said this yesterday on my YouTube video, but I thought this idea was crazy.

When he first started doing this two months ago, there wasn't any reason. to think Bristol Myers wasn't going to inspect. So I just thought he was wasting his time. And for him, he thought if you can see an inspection, he can get ahead of it and make the position bigger. It changed over time. It went from that.

I can make this bigger once we see an inspection to, we have to see this because if we don't see this happen within, you know, 30 days before, 40 days before, he was going to sell his whole position. He was nervous. And I was, as recently as a few days ago, Dan, I were talking about this. He was wondering if we get to the end of next week

and we don't see an inspection, what do we do? And I told him, he'll tell you this. I mean, I told him I was not selling under any scenario because I'm so confident that this is going to be approved by the pedufidate that I'm not going to find out one day that they decide to do a virtual inspection and just because your guy didn't catch a car that we got freaked out.

He hadn't decided, I don't think he would have sold either, but he hadn't decide yet what he was going to do by the end of next week, right, Dan? Yeah, I think that's more or less correct. And I think, you know, you're pointing out an important point. you have to be you know you have to have enough evidence and enough confidence to hold a position that is as binary as this one and if that inspection hadn't happened you know let's say 30 or 25 days prior to pedufa I think I would have probably sized my position down a little bit just to be able to sleep so hey I think you said something that this just applies to all investing like I think investing is a lot of game of building confidence and conviction in a position I think there's a lot of game of building confidence and conviction in a position I think the reason a lot of people kind of underperform is some bad news comes out if you don't have confidence or conviction in the position, you say, oh, this blows my pieces up and you just

can't excel at a loss. But let me just summarize what I think I heard. So basically for the CBR to be off, ISO cell, which is the drug we're talking about here, needs to be approved by the end of the year. It has a Padua date in November, and the gating factor to approval seems to be they need a successful inspection of two facilities, right? And what you did is you hired a private investigator to sit in the parking lot, basically, of one of these facilities, or sit outside the parking lot, but kind of monitor the parking lot. And that investigator saw what you believe is an FDA inspector on site. And you're kind of listening, you saw the person, you ran their license plate and everything. So you think this was an FDA inspector. And it lines up with the timeline

for an inspection, lines up with this getting approved on time. Am I kind of summarizing that correctly? Correct. Yeah. And I mean, we ran the license plate. We know that the car. that parked in the Juneau parking lot is registered in the name of an FDA inspector that works for the Baffle Field Office. We saw him and the colleague of him, or somebody who we believe as a colleague of him, walk into the front entrance of the facility.

We also know that senior QC personnel from Bristol was on site. So, I mean, I think... They might have... I mean, if this was a jury trial for murder, I would vote guilty. They might be hand-delivering a complete response letter. Just a courtesy. So let's, and I think one of the big debates, and I tweeted this, I sent this to you guys,

I think one of the big debates is the stock went from 270 to 330 on you tweeting out that you saw an inspector, and I've heard a lot of pushback from a lot of people. You know, your Twitter account is anonymous, though at this point, this will be the second podcast you've done with your name and face out there, like people never can see who it is. But a lot of people are saying an anonymous Twitter account tweeting at what the time was a grainy photo, and I think you believe that for privacy reasons. but you said, there's an FDA inspector on set, an anonymous Twitter account posting this. I mean, that is someone, a lot of people are putting, saying that's more in line with someone trying to pump than real serious information.

I do think a lot of people are kind of questioning, hey, is this a trustworthy source? I mean, I think you're trustworthy. Matt thinks you're trustworthy, but I do think that's a question. But let's put that aside. People can make that decision on their own based on what you said. If an inspector was on site, what are the odds of LISO getting approved by the end of the year? Okay, so I think we already heard from Bristol Myers that the rest of the review was going well. And I think the biggest challenge for Liza cell was the CMC part, the CMC review, because it is a more difficult or, you know, more complex process compared to those other Cartes where they separate the CD4 and CD8 cells. and, you know, that just adds a whole another layer of complexity, okay? But we've been able to see from the FDA that they don't perform those inspections

if they haven't, you know, arrived at the conclusion that they plan to approve a drug. So for me, this has, you know, for me, this de-risk the CVR in two ways. It's not just that the inspection couldn't happen in time for logistical reasons, you know, In fact, we know it did now, or it is still going on, but we also know that there is very little other risk in terms of the review. So I think the only risk that's left here is that, you know, those inspectors, they will most likely make some observations, issue a 483 letter, and Bristol Myers, you know, and Lanza for Houston, they will have, 15 days to respond to that and come up with some kind of, you know, who cause analysis and plan how to resolve that in the future, right? And, you know, I think the only risk is that they find something that's, you know, very severe and major observation that they would not be able to

address in that format and in that time frame. And that would, you know, sort of result in a CRL and you know that that will kill the CVR I think you have to be realistic that that risk exists but I will put that at maybe 5%. So my probability for Lyself to get approved went up to 95%. Matt, do you have anything you would add there? I 100% agree with everything he just said. I'm a 95%. my 95% are like you can't be ever higher than 95% especially in this situation because

you definitely don't know the unknowns yeah there could be a problem in the plant that we can't even imagine and of course that could be there so you can you can you'd be impossible behind that I would like to say that every single stat you look at is higher than 90% if you just look at a generic drug that has the same qualifications as LISO cell. So breakthrough designation, 90 plus percent, get approved. Major amendments are a positive thing. 90 plus percent major amendment drugs get approved. I believe 12 out of 12 breakthrough designation drugs that got a major amendment all got

approved. So 100 percent of breakthrough designation that got a major amendment got approved. And finally, LISO cells a good drug. This is a safe, excuse me, the, the, best in class differentiated product of these three cartis. There's a reason it should be approved. So it's not, you know,

we're not just looking at something in a vacuum with facts. So yes, I'm at 95% and I'm very excited. Dan, do you know anything on the, on the stats for when an inspection happens, what percent of complete response letters or rejections happen after an inspection?

Does that make sense? I can answer that. When there's no COVID, there's always inspections. So, so you, Even a company that they're planning on giving a complete response to, he still inspect.

This is important, actually, because you can say, well, they're inspecting right now. How does that mean that they haven't gotten rejected for other reasons? But as Dan pointed out, we have a comp in COVID, which is biomarin in July, got a complete response letter for safety and efficacy, clinical profile. And the FDA did not send in inspectors as a result. this check by the way is we spoke to a former FDA official and she said that the whole idea of a complete response is even if you know you're going to reject from a clinical profile and you say let's say hey we need another trial it's the FDA owes it to the company to inspect because maybe there's also deficiencies in the manufacturing so when you give the complete response you say

oh and you also have to get the rats out of the you know kitchen so no that's an important point and that's actually not what it was driving in but what you're saying is hey the fact that they're inspecting is a bullish sign because if they were going to turn this drug down in COVID times, they would just reject it. That's what I was saying. We can answer your question because every drug gets inspected and we don't know how many get CROD the cost of manufacturing. Is that your question?

Yeah. That's a complex manufacturing. It would be unfair to give you. It's a very low percentage, I think, Dan would probably say, but this is a much more complex manufacturing than a small molecule, some pill or something. Dan, you have anything to add there? Well, I think, you know, most things have been said, I will say, I feel pretty good about the fact that, you know, that the vector manufacturer is Lonsa. They've, you know, they've, are very reputable for quality nowadays.

And, you know, they had a few issues in the past a few years ago, you know, in cell therapy. But they specifically then went on this initiative where, you know, they, you know, they, they, they put quality above everything else and build those new facilities. I have a ton of customers, you know, and they're sort of in the cell therapy and gene therapy space. And I also want to add that I think Lanza is one, you know, the Lanza facility is one that could probably be inspected virtually if it's difficult to travel to Houston.

Bristol Myers has said that those plans need to be inspected physically, but I could see the FDA compromised there. And I've heard that Lonsa had virtual inspections before, not at a site. That's the point of clarification. Bristol Myers has not said publicly that there has to be physical inspections. They refuse to comment on that exact line. Some of the investor relations people have insinuated it on some private phone calls, but it actually has never been said that they have to physically inspect.

They just said the FDA has said they have to inspect their plans. So they definitely could do virtual. And Dan and I, not to put it in his mouth, but there's no way they physically went into that brothel. Is it Botthal? Mothal? Them going into our brothel is a completely different issue here. You know what it is?

It's the threesome that's on my mind. So I'm thinking about it. There you go. There you go. Them going into the Bothell facility, I mean, I actually do put a hundred percent chance they'll inspect the Texas facility. It doesn't make any logical sense why they would two one

and then say they can't put a perspective do the other. Agreed. And then I'll just say, like, I have some background in healthcare. For me, like Bristol Myers with a, you know, this is a multi-billion dollar drug. Like, in my prior background in healthcare, if you were like, hey, this is safe, this is efficacious, what are the odds that they're going to, Bristol Myers, with this huge drug is going to fail in manufacturing and they're going to give a complete response letter for a drug that could really

help a lot of people with cancer? I would have thought the odds were, you know, would round to zero, to be honest with you. Now, one more thing to add, you asked historically about any manufacturing CRLs. Well, there's only been three cartis ever filed for approval. And all three got approved in the first round. And the last one just got approved in July, didn't have to get inspected because it's being manufactured at the same plant as the previous cartee that's been approved. And Dan said many times in the previous podcast, both of those cartis had major deficiencies

at their plants in the first review cycle, form 43s. Is I going to write this time? I mean, I wouldn't call it major deficiencies, but there were five factory inspections performed for those two products, and they resulted in 5483 letters that had, you know, numerous observations. But in all those cases, you know, the companies were able to respond within 15 days, the written response, and that was deemed to be sufficient for the drugs to get it. And it was approved five, six weeks early, both of them.

Yeah, a little more than that. I think. Perfect. Let's see. So I think we've covered, I mean, you know, again, I'll say this was, Dan, this is incredible work. This is one of the edgiest checks I've seen and heard of. I'll reiterate, people can judge for themselves if they think you're credible or not.

I think you're credible personally. I, you know, anything else on Lysosso we should be talking about or thinking about because I do want to update IdaSL real quick as well. I think, sure, but actually, go ahead. I believe Dan's not credible. He's committing fraud and could put to jail. So I don't know what the upside would. be for him to not be credible.

I never want to bring fraud and jail up on this, probably as blue. He's already got his, for the YouTubers, he's already got his I'm on the run beard growing, so maybe it works. Look, I want to comment on that because I appreciate, you know, that the pictures that were sent around yesterday were blurry, right, and they didn't have to write date on it. I get it.

But at the same time, it's a little interesting, you know, to see that much pushback because it's not that hard, especially after that first podcast, to find me. I had numerous people who contacted me on LinkedIn. So, you know, I have, you know, two degrees, MD and MBA. I run a fund. Oh, we don't need your bio again, Dan. I'm not going to need my bio, but I'm running a fund. I have a family.

interesting in going to jail. I would never post something like that, you know, if it were not 100% truthful. And yeah, it's interesting that still people think it could be some kind of pump. But, you know, I think if you, yeah, I don't really know what to say, but other than that, I'm 100% certain that this is proof of information. Nothing on this pod's investing advice, but I think you're credible. I just, you know, I think all of us know the big pushback has been, hey, who is this guy? You know, he's not a Wall Street Journal reporter breaking this story. And people can judge for themselves if they think incredible or not.

I think I just want to make clear that, you know, I sort of want to share this with the investment community because I think that there are a lot of people, you know, that I know that are in the CVR, that a lot of people are interested. I think a lot of people are nervous around those inspections. That's why, you know, I didn't want to sit on that for any kind of prolonged period of time. I want to, you know, I added a little bit to my position, and then I shared it with other people. And, you know, maybe it's people are not used to this kind of diligence, or maybe people are not used to people sharing it publicly. But, you know, I sort of wanted to share it with the broader investment community.

You know, I do have better pictures. I don't think there's any point in sharing them because I don't think those FDA inspectors would appreciate. pictures of the, you know, pictures of them circulating on social media. And, you know, I mean, if you want to see it, I mean, we have pictures of the car driving on the parking lot. I have covered the license plate here. You know, we have non-blurry pictures of the people getting out of the car and walking. You guys are getting me nervous, man. I don't want any more pictures. But, you know, this doesn't have to be on Twitter, I think.

And I want to say, I have tremendous respect for those inspectors, for the FDA. I think it's great, the work that they're doing. They haven't missed a single pedouffer today. I think, you know, I made this pandemic doing great work, you know, also evaluating COVID therapeutics in parallel. And, you know, nothing but respect. And, you know, I don't want anybody to be upset here. I think it's a great outcome from everybody. We all win.

patients win, so if y'all holders win, Bristol Meyer wins. So I'm just happy. I think, Andrew, I think it would make a great case study and what happened the last 24 hours. And usually what happens is when somebody puts out a fake article or fake press release that you want to acquire a company, whatever it is, it's all anonymous. And the stock pops. And the person, of course, sells it anonymously into that pop.

And you find out it was fraud or fake. The reason why this is so interesting to me is, is, right, Dan's not anonymous at all. And he's very easy to see that he's a reputable, legitimate investor. And we are still now 24 hours later, and the stock's not where I think it will be once it's actually proven they'd inspect. So that to me is a fascinating situation. Basically, you have two groups to people. You have people that know Dan and trust him. And then you have everybody else. And they're selling stock right now as we speak. And the people that know Dan and trust him are buying it right now at 3.30. And one is definitively right and one is definitively wrong. It's not

even debatable. It's a fact. So we will find out in the next 24, 48 hours, I'm guessing, an article will come out by CTFN or something. And we will see the stock go up. It'll go up to 360, probably, or 375. And it'll be proven that there was a discount still as of right now. Maybe this will do it. Maybe your podcast will do it. I'm a little skeptical of this podcast will take it to that level. I think it might go up, but not to the actual level when you get a third-party published report that says this is true. So I majored in psychology in college, and to me, this is the psychology behind the last three hours is as fascinating as the edge that Dan got. Well, look, again, I think this is great work. Nothing here is investing in vice,

but let's talk next step. So will Bristol put out a PR if there's a successful inspection, or do you guys think we're going to have to wait until, hey, Padoufa approved? Absolutely won't put out a PR. They won't know there's a successful inspection until they get the report back from the FDA, which won't even be for a week or two at the earliest. And there definitely will be something in that report that probably requires Bristol to respond to. So they have no idea after that response is going to be acceptable. So basically anything that they do to signal that an inspection happened,

which in turn the market would interpret as, they're going to get approved could be false to the market. So I think the next step will be one of two things. We either get this article that comes out to confirm what we already know, or we will find out at the 10Q, when the 10Q comes out in earnings in November, they will change the language that inspections have occurred for LisoSill. There's also a third possibility.

They regularly do these private, you know, as I've talked about before, Bristol-Mars does these private investor calls or with dial-ups or whatever. And I could see them disclosing on that. a call that an inspection has occurred or that it's been scheduled. It's kind of hard for them not to do that because they've said so many times every call, no inspection has been scheduled, no inspection has been scheduled, no inspection is scheduled. And then just to go silent, if they have one of those calls, it would be unlikely. But they also might just not schedule anything for the next week. The only thing I'd push back on is they're going to be in a quiet date

starting basically right now for earning. So I'd be surprised, I'd be surprised if they were doing private calls like that. I agree, not alone do anything. Yeah. Dan, anything else to add on the the next steps for Lysosso? No, I think, you know, I think we probably get some kind of article in the next few days. I would expect that, you know, CFTN or somebody else. Given CFTN all they need to get this article out there. You've given them everything. Yeah, yeah.

And, you know, like the thing, though, is that CFTN, they don't take investors as a source. And, you know, I would assume that they would have to verify everything that I have to say. at with their sources. And to be clear, they only have one source. So if that source refuses to comment, then they can't put an article out. Yeah, but I do think from a, from a journalist standpoint, there's, it's one thing to call and say, hey, has an inspection happening. And then it's another thing to say, someone saw an FDA inspector in your parking lot. Like, you know, sometimes that kind of juices and opens the doors, I do think. There wasn't no yesterday, and Bristol declined to comment on the rumors. Uh, cool. So I think both of you guys have said 95%

chance of a licensell getting approved at this point is kind of where you're thinking. Let's talk idicel real quick, because there has been a little bit of information on idicel since the last podcast, too. You know, I, I to sell just for everyone to remember, it needs to get approved by the end of March in order for the CVR to pay off. If it doesn't, it's a zero. And I'll let you guys like, how are you guys thinking about idicel? What are the odds of idicel approval at this point? You want to start off sheep? technology sheep, Dan? Sure.

Ida cell. I think very few people would disagree with the fact that the clinical profile of idicel is to be favorable and those patients don't have a lot of other options. I think the only questions there are, again, around manufacturing, although the manufacturing process is simpler compared to Liza cell. And I think the other risk is just timelines that somehow they will get a major amendment. I think overall the drug is probably 95% likely to get approved during the first review. But I will acknowledge there's some risk of a major amendment or an extension that would push the pedoufa date beyond GAP 31st.

you know and that's anybody's guess I think some people might think that there's a substantial probability of that because they got an RTF before I think it's the opposite I think the RTF de-risks that and I think it makes it less likely they will get a major amendment

because a major amendment is what you get when you have to submit additional data to FTA reviewers and that process where they had the RTF, the FDA basically told them everything that I didn't like about the application, or, you know, they told them where all the holes were. They also had an additional meeting with the FDA.

They took their time to put together a better application. So I would personally say that the risk of an RTF here is maybe 10%, sorry, not of an RTF, but of a major members, maybe 10%. So I put it at 85% likelihood of approval. Where do I think the CVR will trade? I don't think it will trade there. because, you know, I think a lot of institutional investors have trouble getting the CVR past their risk committees. In size, I think there might also be some selling pressure, you know, or some people might be forced to reduce their position size if this goes, you know, if Lysol gets approved and the CBR trades up.

So I would personally see it may be traded around $6 once Lysol is approved. Matt might be a little more cautious here, but I think at $6. you're basically underwriting a 66% probability of an approval during the first review without a major amendment. And I bet that at 66% people, there will be people that are willing to take that bet. There's a lot of liquidity right now in the markets, a lot of people that are looking for uncorrelated returns. And I can see how so far the CVR might have been too complex because, you know, we had to analyze multiple drugs. We had all this overhang with the inspections with COVID, Lysa cell and IdaSel. But once Lysol is approved, you will have a precedent.

You will have, you know, I think there's some conditional probably a play as well that, you know, if Lysol cell facilities at Juneau were good enough for approval, you know, chances are that the IdaCell facilities in New Jersey will be up to the same standards as well. because again it's the same company so if i'm right here you and matt both think liso sell at this point 95 percent odds of approval why to sell it sounds like you think based on everything about 85 percent chance of approval correct uh if the cvr pays off that's uh it's a nine dollar payout so you think fair value for the cvr today is probably a little bit above seven dollars is what it sounds like you're adjusting for hey you know there's some there might be a

little bit of illiquidity and just like people don't like to buy CBR risk, but you kind of think if Liso sells approved, this is heading towards $6 is kind of where you're thinking, if I'm summarizing correctly. Correct. Matt, anything else from you on IDICEL or kind of fair value? I agree with everything you said with IDSL. I definitely think it will not trade a $6, though I think it should. So, and I have friends that own the CVR that think even I'm optimistic for a trade.

So I have long thought of trades in a band. I'll give a band of between five and five. 50, which is pretty precise. So if I'm right, that'll be pretty cool. I don't think it will trade below 475. I actually have been in a bet with somebody recently that it will not trade below 475. Oh, I think my bet was for 450. I'm as confident as anything, anything, it will not trade below 450. Happy to take bets. I'll pay two to one odds to anybody that wants them. I will give you two to one. I'm not like we're done. We're not going into fraud and processing bets here. But no, I hear you. I hear you. Anyway, right, I don't want to get Andrew in trouble.

You're okay taking royalties from me, but you won't give you 5% commission and all the best that The lawyers are going through the paperwork on the royalties. That's going to be all figured out. I can't be running a booking a bookie website here. I think 5 to 550, but to be clear, I will be extremely overweight this at 5 to 550 going into I to sell. I think it's, I think 85% is probably conservative. I just threw out some odds to you before. 90% of breakthrough designation drugs get approved in the first cycle. This is not only a breakthroughsination drug, but a first market unmet need where you can call 100 oncologists, and all of them will tell you that this is an approvable drug with a really good clinical profile. So your risk is in the manufacturing side. And I say 10%, you know, you have a 10% risk there. But, you know, 85, 90, whatever. I think the risk for major amendment is low, very low, because they had an RTF and they were given a list of everything that was missing in this application.

and they resubmitted it. So unless they somehow can thin this very thin line or, sorry, thread a very thin needle where they put in just enough information to get the RTF, you know, the application through the next to be accepted, but not enough to where the FDA is going to say, hey, we're going to deem you a major amendment. I just don't know how that's possible. Yes, they can get a major amendment for something else that was not part of the RTF. But again, the letter they get when they get an RTF goes through the entire application and says what's deficient and what's not.

So they had kind of like a free look. It's not a free look. It costs us three months. But you know what I'm saying. So I think major amendment risk is 5% or less. Only 10% of drugs get major amendments. And that's without RTFs. So if you just look at that perspective, there's a 10% chance there.

I also think there could be a huge lawsuit if it goes from an RTF to a major amendment and you would have contingent value from a liability, a liability perspective. from Bristol Myers. Well, look, Matt, I got to thank you. You brought up gambling, you brought up fraud, and you brought up lawsuits on this podcast. So you're really hit for the trifecta there. I'm going to, I'm just going to disclose one more time. CVRs are risky. Nothing here's investing advice. All of us have positions in these in these securities. Dan, Matt, anything else you guys want to say before we wrap it up? Yeah, I mean, maybe the only thing I want to add is we've been through this RTF

argument before with Ozanima. It was actually the first milestone in this in this CDR, right? And I think a lot of people perceived that as being very risky as well. The history there was Ozanimov before under cell gene got an RTF because

they did not characterize a major metabolite of the drug. And the FDA basically told them what they have to do you know, and agreed that bridging studies in that case would be enough to, you know, to refile. They did all of the studies refiled and, you know, had no trouble getting disapproved. And I was making the same argument back then that the fact that you get, you know, an RTF and feedback from the FDA that they tell you specifically, you know, what kind of studies you need to run, what kind of additional information you need to submit. it's almost you know if you want to compare it if you have some kind of test in college and you know

the professor gives you feedback and lets you retake the test chances are if you know that you're going to pass the second time yep perfect perfect well hey guys I'm going to wrap it up there dan I well Matt your work here has been great uh I know a lot of people on value investors club are going to owe you a couple beers after this but dan I mean again I think this is one of the most creative and coolest checks ever gotten. I think both of you have done great work on this. I think both of you, some people on Twitter might owe you guys some patron money or something if this all pays out. But hey, this is great. Thank you guys for coming on. On the last podcast, I drafted up by saying, I hope we're talking in December and this is a $6, $6 CVR. And I stand by

that. I feel like it's more likely today. And maybe next month we'll do an update and we'll only be talking about IDSEL. So thanks again, guys, and we'll chat soon. Thank you.