The big question mark I have around this one is why did Freshtracks agree to close out the licence aggreement for what can only be described as a steal for Botanix. At the time that Botanix bought Sofpironium Bromide they described it as a "Deal structured with minimal upfront payments, with most of the consideration payable in Net Sales milestones and royalties". The recent agreement to close out the licence royalties and milestone payments really doesn't make any sense if you were FreshTracks. FreshTracks were due to get $4m payment when/if the FDA approval is received in late September, so closing out all of the future payments (>$160M potential) for $8.25M seems ludicrously shortsighted by them. This makes me question why would they do this as presumerably there is a good reason. FreshTracks aren't flush with cash but they are also not desperate either and as of March 23 they had $10M in the bank which they said will cover them for the next 12 months. I am also wondering why no other large pharmaceutical company wanted to either buy the rights to Sofpironium Bromide or to buy the potential royalty stream from FreshTracks. I am a bit sceptical about this deal as it seems incredibly onesided in Botanix's favor. Given that until Botanix stumbled upon this drug in early 2022, and prior to that they were trying to develop skin creams from cannabis for achne and rosaca, which failed in phase 2 trials.

This all makes me suspicious that FreshTracks could be the better poker players, and they know/suspect something (as the drug developer) that could become problematic during its market rollout. They have accrued the development costs and are now effectively giving it all away for a total of $13.25m. I doubt this would have recouped their cost of the development of Sofpironium Bromide.

The final nail for me was reading the interview with Alan Kohler where the CEO described the phase 3 results of Sofpironium Bromide as "pretty highly statistically significant". Significance either is or isn't at a specific level, but can't be highly or slightly.

If the drug is legit and Botanix are able to charge $700/ month for the initial target of 300000 paitents with a 5-10% COGS then the financials look impressive and they should do very well, but I have an uncomfortable feeling that this isn't the most likely outcome or the full story. Good luck to holders but I think I will watch this one from the sidelines.

I am reminded by that saying that if you can't see the sucker at the table then it is probably you.