Aida Pharmaceuticals (AIDA)

[PaperProphet]

You're a bit more optimistic than I am overall. You've almost mapped out the most optimistic scenario. There's also a probability that China will relax the price controls on drugs over time. With current Etimicin sales continuing to go well, with Rh-Apo2L success and with relaxed price controls, the stock would certainly be like a three-stage rocket...if or when that happens.

For me, though, I would more than anything like to see continued good profitability in current operations. That way they can bide their time if anything falls short of the most optimistic scenario. There's certainly good potential but I'll believe in the successes when I see those successes happen. I'm not faulting you for your optimism. I'm just not that optimistic.

[BMiles]

Correction to Revenue Projection I posted last week -

I previously stated projected revenue from Rh-Apo2L to be $1.2 billion annually, I had mixed up the currency. The annual projection is $150 million the first full year while in production and $225 million the second full year with a projected margin of 40%. Below is a link to a Q & A the company did which discusses this on the third and fourth items from the bottom of page two. This Q & A is a little old as we now know they have completed Pase 2 Clinicle Trials. I think they may also be a little behind schedule as it pertains to production of this drug. The were initialy looking at some point during 2008 but I think projections are now early 2009.

http://www.equityperformancegroup.com/aida_einvestor_kit/QiaerBiotechFAQ.pdf

Q. How much does Aida anticipate generating in revenues from Rh-Apo2L in its first year of commercialization in
2008? How about its second or third year?

A. Aida estimates the revenues of Rh-Apo2L may reach approximately 600 million RMB (US $75 million) in 2008 if the
commercialization is performed as planned and all necessary approvals are received by the SFDA. In 2009 and 2010,
revenues have the potential to reach 1.2 billion RMB (US $150 million) and 1.8 billion RMB (US $225 million)
respectively.


Q. Based on the revenue projections (above), what type of net margins does AIDA anticipate that Rh-Apo2L will
generate?

A. Aida anticipates, if all necessary approvals are received from the SFDA and Rh-Apo2L is brought to market as the plan
outlined above stipulates, net profit margins of Rh-Apo2L could approach 40%.

[BMiles]

Well.... That sort of depends on the building itself and the 80% ownership in Fengyuan Building Co. and what it's current financial status is. I suspect there is definitely some value to be recovered there even if they have to sell off the assets of that Fengyuan Building Co. Fengyuan Building Co. is obviously a subsidiary of Nanwang and for all we know it may be one of many subsidiaries and may be the one with the most value???

Brad

[PaperProphet]

That's true. Although right now a building, some land rights and 80% equity in another company which may be affected by Nanwang defaulting sounds like it would fall very short of $7 million. I could be wrong, though.

As you said, it's a one-time hit and if they execute well on their operations, this will be a small footnote in their history.

As I see it, it was a big hit and the company's market cap was appropriately discounted because of that. Now it's back to operating. Hopefully they will continue with similar results as the past couple of quarters.

[BMiles]

You seem to be forgetting that asset were seized which will offset that $7 million, the offset could value $100,000, $3 million, or the full $7 million, we will find out eventually. Having said that, I don't think it is quite fair to make it sound as if they are out an entire $7 million when they may not be out much at all???

Brad

[PaperProphet]

Re:<"Like I said before, this is about to be some of the easiest money I ever made.">

Hopefully you're right. I have a good number of shares but I'm a bit cautious after that $7M hit. Hopefully they can recover a fair portion of that from Nanwang's assets.

[PaperProphet]

The $7M is gone regardless of when it shows up. That was a lot of money and certainly the reason the market cap dropped. The market cap is down $15M from before that news became public so it may be a bit over done but there is extra risk in not having that cash. That $7M was very valuable. That would have sank most companies this size and it certainly hurt Aida.

As long as nothing happens to earnings, it should be a good stock. If phase three trials go well, they probably can find the money to build the plant. If not then they don't need to build the plant.

[BMiles]

QFA2008, I don't think we are really looking at $7 million, I believe there were some assets that were seized that I am sure will offset that number quite a bit. In addition, the fundamentals and future for AIDA remains the same. What you are referring to will be recorded as a one time event. In addition, they are projecting revenue of more than $1.2 billion annually with a 40% increase in margin if and when Rh-Apo2L goes into production. With numbers like that, $7 million won't even show up as a pimple on their a$$ if you know what I mean. With such a low O/S, it will be impossible to catch this stock as it quickly rises into the double digits. Stocks trade on future expectations, hopefully the filing next week will set things back in order.

JMO,
Brad

[BMiles]

Yeah I saw the warrants but they are all way up there too, obviously they believe they can prove the stock should be trading higher than $2.20 per share in the very near future or they would not even mess with an offer like that so high. (All just my opinion) I agree with you in that I think next week will set thing straight as it pertains to share price, Quarterly filing by the 15th along with the release of the phase 2 testing results of Rh-Apo2L which could be announce on any given day now. Like I said before, this is about to be some of the easiest money I ever made.

Brad

[QFA2008]

How about they write off $7m as a loss in Q1 ?

[PaperProphet]

I believe that included warrants in addition to shares, two warrants and one share in each unit. Of course the price was higher then too. Obviously at the current price, nobody would want those units at that price. The price has less to do with expectations than with what they hoped to get at the market price.

I'm looking forward to next week with earnings being due. They've been doing well and I'm hoping that will continue.

[BMiles]

Let me see if I understand the recent filing, AIDA is offering 1.2 million shares at a price of $2.20 per share? If I am reading that correctly then the company must have some real solid information to support the idea that the stock will rise to that level in the near future in order for them to believe they can currently get $2.20 per share while the stock is trading so low.

Brad

[BMiles]

I think it is safe to say that in 9 days or less we will see the stock fully recover on more solid growth, the coming update is only a bonus.

Brad

[PaperProphet]

They said within a month so it may be a few weeks yet. I'm looking forward to the results myself. Earnings are due in around a week also.

[BMiles]

We should be seeing the results of the Phase 2 testing for Rh-Apo2L any day now, should send this stock on its way.

Brad

[BMiles]

I'm looking for $1.20 range very soon. eom

[willlbone]

Got some at 60 cent. Buying more if it goes down agian. Likely to go back to a buck soon and really close that gap.

[BMiles]

10,000 shares in volume today, I would say the sell off has definitely come to an end. lol This company puts our news on a regular basis, it is definitely primed now for news to send it back to the $1.20 range. Seeing as the selling has subsided, I would think the company would release a couple PR's to get it back up to that range. With continued revenue and net profit growth each quarter, I think this play is just too easy.

JMO,
Brad

[BMiles]

Bottom reversal looking good here, nice opportunity with a profitable company with strong financial's.

Brad

[BMiles]

I picked some up today, looked like easy reversal money to be made here plus the profitable financial's look real solid with a quick glance.

Brad

[PaperProphet]

From the 10KSB, it looks like they had enough cash to pay for the Nanwang fiasco. The 8-K also says it was "paid." I don't know what the terms are but it's possible they also may have to find another guarantor for their loans now that Nanwang is out of the picture.

It's too bad that they needed guarantors. It looks like they're doing very well on their own. Hopefully they'll be able to recover a good portion of what they paid from Nanwang's assets.

It's rare to find a company this size which is actually producing income while they're producing new drugs. I looked through a number of companies before I found Aida and it impressed me. However, I'm probably not going to put any more money into it until it stabalizes or I'm more comfortable. I suppose I'll have to see what the future brings.

Two big pieces of news coming out. The first is the earnings. Third quarter was $0.02. Fourth quarter was $0.08. Hopefully they'll keep on going--although I don't have enough information on that other than extrapolating out. I know China mandated that drugs could no longer be purchased through distributors which forced Aida to change their sales. The reasoning apparently was to stop counterfeiting which since counterfeit drugs generally enter through distributors. Sales may cost a bit more but that policy should ultimately benefit Aida.

The second piece of news is the phase II results of Rh-Apo2L. Those statistical results will be much more likely to make the market. Otherwise, it's hard to put numbers on opinions. As nice as "extremely positive" sounds, it's not quantifiable.

[willlbone]

Lower and lower and lower.

[PaperProphet]

There are two items of high interest to me. The first is earnings. They have been strong in that area and hopefully that will continue. The quarterly report should be out in two or three weeks.

The second item of high interest to me is the actual results of the phase II trials of Rh-Apo2L; the p-value, statistics and all. When the company says initial results are "extremely positive" and show "strong efficacy," those are still only opinions. What one person sees as "extremely positive," another might see as "poor." There's a lot of risk when depending on someone's opinion of the results. However hard numbers aren't subject to interpretation. Good, objective data are a recipe for solid stock performance. That's generally why pharmaceutical companies do post that type of data in their press releases.

[willlbone]

Closed the gap with 250 shares. Sold the last of mine at 88. Looks like its going lower.

[QFA2008]

Aida can buy JSIM shows Aida has very strong Chinese government support.

[willlbone]

Close the gap.

[QFA2008]

From TD Ameritrade news!

[PaperProphet]

Do you have a link for that?

Thanks.

[PaperProphet]

Those three you listed are three which were guaranteed by Nanwang where Aida apparently had a reciprocal agreement. There are thirty other loans guaranteed by other parties but it doesn't say if there is any similar relationship.

[QFA2008]

Aida Announces Update on Progress of Rh-Apo2L TestingLast update: 4/28/2008

Aida Pharmaceuticals, Inc. (AIDA) today announced that the Company is compiling data for its Phase 2 testing results of Rh-Apo2L and expects to announce the findings within the next month. The Company previously announced that the target cancers for the drug have been determined and initial results are extremely positive. The cancer targets that the Company has chosen are ailments which Rh-Apo2L has shown the most efficacy and which have the most market potential. The Company previously announced that Rh-Apo2L testing results have shown strong efficacy in treating non-small cell lung cancer, non-Hodgkins lymphoma, stomach cancer, pancreatic cancer and kidney cancer. The Company intends to immediately file for Phase 3 clinical testing with the People's Republic of China's State Food and Drug Administration after the announcement of the findings from Phase 2 testing. The Company anticipates that the Chinese government will then allow for the commencement of Phase 3 testing within two to three months after the Phase 2 results are published. Phase 3 testing will entail large-volume tests on over 300 patients and is the last step before it may be commercially sold in the People's Republic of China. About Rh-Apo2L- The Anti-Cancer Drug Rh-Apo2L is a pioneering biotechnology gene therapy drug used to treat certain forms of cancer. This biopharmaceutical drug has gained the attention of researchers and clinical professionals throughout the People's Republic of China who are observing the drug for potential replacement of surgery and radiation therapy for cancer. Potentially, over 8 million lives can be saved each year in the People's Republic of China by this drug. About Aida Pharmaceuticals Aida Pharmaceuticals is a product-focused pharmaceuticals company engaged in the formulation, clinical testing, registration, manufacture, sales and marketing of advanced pharmaceutical and genetic products in mainland China. The Company's mission is to discover, develop and market meaningful new therapies that improve human health. Aida Pharmaceuticals, in operation since March 1999, is headquartered in Hangzhou, China with manufacturing, distribution and sales points throughout mainland China. Aida is GMP certified in China and ISO9002 certified for quality assurance and ISO14000 certified for ecologically-friendly practices.

[QFA2008]

Good info from Aida:

Someone get e-mail from Aida:
Aida says:
Aida increase RMB50 million bank loans and solve the cash issue. For Nanwang's guarantee RMB50 million bank loans, Aida changes the guarantor.
Aida says these is no cahs problem for Aida.

I hope Aida can put a PR or 8K to provide these info.

(I get this from another message borad.)

[QFA2008]

They do disclose these in 10K:
Loan from Bank of Communication Qingchun Branch, due March 29, 2008 monthly interest only payments at 6.7095% per annum, guaranteed by Nanwang Information Industry Group Co., Ltd.
3,422,501
Loan from Bank of Communication Qingchun Branch, due June 5, 2008 monthly interest only payments at 6.8985% per annum, guaranteed by Nanwang Information Industry Group Co., Ltd.
1,369,000
Loan from Bank of Communication Qingchun Branch, due June 18, 2008 monthly interest only payments at 6.8985% per annum, guaranteed by Nanwang Information Industry Group Co., Ltd.
1,369,000


Some good info( Aida will get $4M in land transfer):
In 10K item2 Description of Property However, we also recognize the need to provide for a rapidly growing business and therefore, on July 28, 2007 the board of directors of Hangzhou Aida Pharmaceutical Co., Ltd., a wholly-owned subsidiary, held a meeting and unanimously approved the following actions:
. To find a larger piece of land to construct a new GMP-certified manufacturing facility for Rh-Apo2l and to provide for capacity expansion of our current products.
. To transfer the current land and housing where Hangzhou Aida is now located for fair market value to fund the new construction.
In connection with this effort, we anticipate to utilize approximately $4,000,000 from the proceeds of sale of the exiting land and facility for the new construction of the new facility.

[PaperProphet]

"Warranted" has a second meaning. I should probably have said the sell-off was "justified" instead. I believe the price should be lower because of that news.

[QFA2008]

PaperProphet: How did you know "the sell-off today was warranted". The company has no warrants at the present time.
You means a non-related party.

in 10K:
At the present time there are no outstanding options, warrants or conversion privileges for any or our existing or proposed securities except for the conversion privileges held by a non-related party under a convertible note.

Thanks

[PaperProphet]

So they put out three press releases since they took Nanwang to court and no mention of this. That's a material event.

I think the sell-off today was warranted. $7 million is about $0.25/share. I don't know if they will lose all of that since Nanwang has assets but if they didn't disclose this potential liability on their 10-K, what else didn't they disclose? I see they have other loans with guarantors--is that the same type of relationship?

I like that Aida seems to be financially sound--that's rare for a company developing drugs. They have a good core with their Etimicin. I just don't like extra risk.

[QFA2008]

8K news:

Hangzhou Aida Pharmaceutical Co., Ltd. (“Hangzhou Aida”) is a wholly-owned subsidiary of Earjoy Group Limited, which is in turn a wholly-owned subsidiary of Aida Pharmaceutical, Inc.

Hangzhou Aida was a guarantor to Nanwang Information Industry Group Co., Ltd. (“Nanwang”) for certain bank loans and Nanwang was, in turn, a guarantor to Hangzhou Aida for some of its loans. The total amount of the mutual guarantee between Hangzhou Aida and Nanwang was RMB50 million (approximately, US$7,152,678 based on an exchange rate of 1US$ = RMB6.99).

Because Nanwang over-invested in real estate, Nanwang defaulted on two of its loans and as guarantor for the loans, Hangzhou Aida had to repay the loan amounting to RMB49,123,913.65 (approximately, US$7,027,340) to Nanwang’s lenders under the current “tight” monetary policy of the People’s Bank of China.

Hangzhou Aida, in turn, commenced a litigation proceeding against Nanwang in the middle level court of Hangzhou, the People’s Republic of China on April 18, 2008 to recover the guaranteed loan amount that Hangzhou Aida had paid. The litigation application has been accepted by the Hangzhou middle level court. Hangzhou Aida had also requested that the court sequester Nanwang’s assets and such order was granted by the court. The sequestered assets include a building, some land use rights and 80% shareholding interest in Fengyuan Building Co.,Ltd.

[QFA2008]

It may go low, but for long run this is very good company.

[willlbone]

And some more at 0.83.

[willlbone]

Ok, just bought 2500 at 0.85.

[QFA2008]

Good time to buy!

[willlbone]

What happened?

[PaperProphet]

Hopefully we'll get another nice quarterly report coming in less than a month. I'm pretty happy with the last quarter's earnings of $0.08. That's a significant increase from the quarter before and that $0.08 accounts for nearly all of the past year's earnings.

The potential for the new drugs is nice but the current earnings are why I'm in this stock. Hopefully they'll continue to perform well with current operations.

[PaperProphet]

It sounds very plausible that it will be even more effective.
I'm guessing the new drug won't be encumbered by any potential litigation from Amgen or Genetech either. That'a a big plus.

I wonder what the holdup is on going into phase III testing for Rh-APO2L. I was hoping that would be in progress already.

[QFA2008]

Aida Announces New Anti-Cancer Drug Under Development
Friday April 18, 8:45 am ET


SANTA MONICA, Calif., April 18 /PRNewswire-FirstCall/ -- Aida Pharmaceuticals, Inc. (OTC Bulletin Board: AIDA - News; hereinafter referred to as "Aida") today announced that it is developing a potential cancer drug that seeks to trigger cell death in certain types of cancer. Vasostatin-Apo2L, a pre-clinical product being developed by Aida's Shanghai Qiaer subsidiary, is a recombinant fusion protein that integrates the function of extracted fragments of Vasostatin, an inhibitor of angiogenesis and tumor growth, with the function of Rh-Apo2L, which induces the apoptosis of cancer cells. It has shown positive results in the lab. Aida's researchers believe that the integration of Vasostatin-Apo2L will have higher efficacy in certain cancer treatments than currently prescribed methods.


Aida estimates that Vasostatin will have a target market of 80,000-100,000 patients per year after it is successfully brought to market and this will contribute significantly to Aida's revenue.

Vasostatin-Apo2L is developed by the same research team that created Rh-Apo2L. Rh-Apo2L has successfully completed its Phase 2 clinical testing and is going to file application with the PRC government's State Food and Drug Administration to start the Phase III trials. The development of Vasostatin-Apo2L will benefit strongly from the experience garnered in the research, manufacturing and distribution of Rh-Apo2L.

[PaperProphet]

10-KSB just out. Revenues and earnings are fairly flat over last year but quarter over quarter showed another nice upswing. They earned $0.08/share this quarter.

[QFA2008]

(ZT)Aida Diversifies Pharma Offerings with Research Institute Acquisition

Aida Pharmaceuticals (AIDA.OB) will obtain a controlling interest in Jiangsu Institute of Microbiology Co., Ltd. [JSIM], a research institute with several products on the market and several more in clinical trials. Aida did not release details about the company’s offerings or JSIM’s research focus.

Aida already owns a number of China-based subsidiaries, with complicated inter-relationships. The JSIM acquisition continues in that vein. To take control of JSIM, Aida entered into two share transfer agreements under which one subsidiary, Hangzhou Aida Pharmaceuticals Co., Ltd., will acquire a 43% stake in JSIM from Jin'ou Medicine Co., Ltd., and another subsidiary, Changzhou Fangyuan Pharmaceutical Co., Ltd., will obtain a 55% equity interest in JSIM from Jiangyin Hi-tech Group. Neither specific share amounts nor the Jiangsu’s revenues were disclosed.

Aida is attempting to diversify its pharmaceutical offerings away from a heavy dependence on its antibiotic, Etimicin, which was the source of 69% of its revenues during the first nine months of 2007. Aida has not yet released its 2007 year-end results. Aida has a number of cancer drugs under development, including Apoptotic Factor (rh-Apo2l).

In January, Aida completed an unusual private placement, in which a selling shareholder sold 1.2 million shares in a private placement. Aida bundled those shares with 1.2 million warrants at a price of $2.50 and an additional 1.2 million warrants at $3.00. Although Aida received no money from the placement, it would book $2.64 million if all the warrants were exercised. At the moment, Aida’s stock price is at $1.10, which is considerably below the strike prices of the two warrants.

In the first nine months of 2007, Aida produced a profit of $333,000 on $18.7 million of revenue. Both figures lagged below the comparable numbers in 2006.

Jiangsu Institute of Microbiology has been conducting research for more than 30 years. It has over 30 scientists and engineers. More than 20 projects qualified as national-level key projects under China’s state programs.

Disclosure: none.

http://seekingalpha.com/article/70335-aida-diversifies-pharma-offerings-with-research-institute-acquisition?source=yahoo

[QFA2008]

Aida use cash to buy JSIM and they said it is important for Adia to buy JSIM:
1. IP of Etimicin: some company manufacture Etimicin without IP. Buy JSIM will finally resolve this issue.
2. Wetimicin – next generation Aminoglycoside antibiotic, almost done Phase I and will start phase II soon. If Aida own JSIM, these is no any IP issue like Etimicin and Wetimicin is class I drug in China. Aminoglycoside antibiotic has huge markit in China and outside of China.
3. JSIM has a lot of scientists and engineers; and has a lot of on going projects. It will be a big benefit for Aida.

I think this acquisition is win-win for both Aida and JSIM.

[PaperProphet]

Thanks. I didn't know there was a history between Aida and Jiangsu Institute of Microbiology Co.

I just don't see what buying the Jiangsu Institute of Microbiology brings in additional value. They could instead just continue to work with JSIM and then contract or licence for what they need. Of course I don't know all the details either. Maybe the reasoning is sound. Maybe it is more valuable to buy JSIM.

I do think Aida's financials are very good and that should limit any downside. I would just prefer a more conservative approach so the downside risk isn't jeopardized.

[QFA2008]

How many shares for this acquisition ? If Aida uses cash for the acquisition, why Aida need sell uints for plant to product Rh-Apo2L ?
Total cost of this acquisition is about RMB 71,180,000 and they said “in a share transfer agreement”.

Jiangsu Institute of Microbiology Co., Ltd is the patent inventor of Aida current product – Etimicin.
Aida has long history relationship with the institute. I visited Jiangsu Institute of Microbiology Chinese website (http://www.aflatoxin.cn/). It has a lot of products. But I cannot find any thing about ‘Wetimicin, a new generation Aminoglycoside antibiotic, which is now in Phase I clinical trial stage” in today’s PR.
This purchase make Aida has strong Pharmaceutical R&D position in China. Now Aida has three Pharmaceutical Cos (Hangzhou Aida, Aike and Changzhou Fangyuan) and three R&D institutes(Qiaer, Boda and today’s JSIM).
Based upon Aida current position, 30m market cap is very very cheap I think.

[PaperProphet]

Thanks for the link.

Regarding the news today, it's not very exciting in my opinion. I don't see where that purchase creates any value. If anything, they're diverting resources from the plant they're supposed to be building to produce Rh-Apo2L.

Financially, they seem in very good shape. Hopefully they don't ruin that.