Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
TOG, I take it that your "old Board accountability" response means your claims of PPHM criminal activity are unsubstantiated.
How long do you think it will take the new PPHM Board to work with analysts to update their one year outlook price target for PPHM? I consider this a high priority that ideally would occur before the ASM proxy vote in January that extends their Directorships for a year. Establishing a new basis for new BOD accountability makes sense, considering how the Board change came bundled with a new Board decision to stop developing the PPHM technology and sell the technology rights to Pharma.
Best wishes and IMO.
KT
TOG, please substantiate your basis for claims of "huge error" coverup by the PPHM BOD during the Phase 2 trial, considering the Settlement was in PPHM's favor and CSM paid PPHM the maximum penalty under their service agreement. Also, please substantiate your basis for claims of "criminal activity" by the previous BOD members. The Delaware Chancery Court that facilitated the Settlement Agreement that resulted in Board compensation being reduced did not involve criminal charges from what I viewed. Did you find something else that documents criminal activity? Perhaps, the events leading into the Settlement Agreement between the BOD and Ronin involved some foul play that you want to bring forward?
With the new BOD up for election in two weeks, any substantiation of criminal activity that may have helped precipitate the Board take over is important for investors to know as they are considering their proxy vote or legal remedies. Please substantiate your claims, if they can be validated. Also consider, the Ronin and PPHM Settlement Agreement holds parties to the Agreement liable if they make claims of this nature against each other during the quiet period or act to cause others to make such claims.
Best wishes and IMO.
KT
Cheynew, yes, the $10 pps 1 year outlook has been up a while and before that, $14 pps. Ronin has been on the scene since February and the BOD fight underway since mid Summer. If there is information available to the new Board that suggests the valuation is no longer reasonable, measures should be taken to update the value, removing the projection in the interim if the Board thinks the value has become misleading to investors. If the BOD doesn't know how to inform analysts about current valuation due to pending changes, investors should be so advised. Am I being naive about the analyst projection process? Or are investors being misled as to proper PPHM pps outlook?
Best wishes and IMO.
KT
Bio and golfho, I am considering the significance of the proxy vote due mid-January in light of recent PPHM events. Retail shareholders have a management recommendation to vote for the seven new Directors. Yet, CEO King, who has his name on some PPHM patents, has now separated from the company. What exactly, are shareholders approving with this proxy vote? Is this just a necessary legal clean up step, otherwise inconsequential? Is the vote an enabler for PPHM to step away from its technology development via sale, without shareholders being overtly asked to approve such sale? Do certified letters flagging intellectual property value preservation during this transition carry any legal significance beyond litigation support set up?
I note that the pps has not yet breached the trading range when the Ronin Group came on the scene to establish their approximate 10% holdings, yet the only analyst one year outlook target has been $10 or higher for well over a year. Why has the new BODs not taken steps to remove, or at least affirm the basis for the $10 target if the basis by which valuation was established has changed due to the new Board emphasis on Avid CDMO growth? Perhaps, that comes after the ASM?
Best wishes and IMO.
KT
Corporal,
Your probability analysis ignores the significance of CSM having been caught red handed with having mislabeled trial products in a double blinded trial, along with significance of subsequent trial findings. Perhaps, you might assign a probability for CSM mislabeling being inadvertent?
Chevy had posted earlier "The ip is to be sold off in less than six weeks and everyone knows it."? I don't assign a very high probability to that outcome with information released from new management.
Best wishes and IMO.
KT
Biopharm, if you are concerned about receipt, certified mail just costs a few bucks. Steve King announced news of separation from PPHM is a bit ominous.
Best wishes and IMO.
KT
Golfho,
Nice. Your letter gets to the point without getting too technical. The Abbott Labs reference is interesting, as I was of the understanding that Abbie was the "partner to be" but there was not a direct disclosure.
Something to add? The unusual control arm performance in other trials has been troublesome, with no "culprit" identified to suggest mischief of the nature of the dose mislabeling during the Bavi Phase 2 trial. Should the history of unusual trial comparators give cause for asking the new BOD to do an investigation and share results with shareholders sufficient to rule out foul play before placing the technology involved "on sale"? Tainted value should not be ignored if it detracts from valuation during a tech rights sale. Then there were the earlier TNT trials for GBM treatment with unusual comparators...
Best wishes and IMO.
KT
CP, Dr. Wolchak saying "that depends on the company" more likely is a generic reference. I will be delighted if a tech deal emerges before the January meeting. Yet, I guess that PPHM is setting up segregation of Avid bio mabufacturing with purpose. The stand still period lasts a year and stability occurs after directors are voted in place next month by shareholders. Cash drain stabilizes with Avid sales and R&D wind down over the same time period.
Best wishes and IMO.
KT
James, "complete the transition to a CDMO within the next sixty days" can simply mean that PPHM will have stopped spending on R&D for PPHM tech by then, eliminating that path to negative cash flow. Then Avid sales need to stay above their break even sales threshold, enabling Avid to preserve positive cash flow over the next year's stand still period while the PPHM tech deal gets negotiated. That suggests a conscious effort to set up a more stable situation than the hardship condition Realist suggests exists.
I don't know what Ronin's intentions for receiving satisfaction from their position in PPHM would be, but it makes sense that the old PPHM management team and Ronin figured out a situation through their Settlement Agreement, providing PPHM/Avid with the stability it needs to transition to becoming just Avid, the CDMO.
Best wishes and IMO.
KT
James, the covering of naked shorting can carry logic like a double negative... hard to interpret. I wonder if the buildup of the share price amongst high naked shorting before the conference call was seeking a payday by covering the short after the pps dropped a buck with the price signaling that was initiated with very low volume after hours yesterday, before the conference Call started. Some may have seen the quarterly earnings data a few minutes before the call and used the after hours opportunity to let one share trades signal the points where the shorting parties could coordinate at which pps they would aim to cover. The current Avid sales should support a pps above $4, but we shall see if another iteration of short and cover is attempted. The million share volume today does not look sufficient to clear the high percentage of naked shorting as the pps moved to $5.35.
Threes, do you want to supplement that complaint with the SEC and California AG to flag what appears to be market manipulation today, using naked shorting? That sort of regulator attention might rein in manipulation of any pending PPHM technology sale mischief, as well.
Best wishes and IMO.
KT
CP, you wrote what I see is a key development from the Ronin Settlement Agreement here: I noticed how the current BoD that will be reelected by one single vote because there are only 7 candidates for 7 seats, insisted on us to VOTE at the ASM. Why? Whether we vote or not makes no difference. For the BoD election each candidates will have at least RONIN's votes because RONIN committed to it by agreement with PPHM. So they all will at least have one vote.
It seems that a proxy vote in January representing all shareholders, voting to approve the BOD plank that was an outcropping from the Ronin Settlement Agreement is perceived by someone as providing after the fact shareholder approval of the agreement. Being pragmatic, I don't see a path for averting that outcome, unless as you indicate, illegal collaboration preceded this set up. At this point, long shareholders see the Ronin Settlement Agreement that includes a stand still provision that gives PPHM/Avid about a year for PPHM to sell their tech to Pharma before Ronin can resume what were referenced as PPHM management hostile measures. My presumption is that those long retail investors that contacted the old PPHM management team and advised of their dissatisfaction with old management business plans and intention to support the activist agenda is what precipitated the situation long investors now are facing. Absent an investor support base, the old team yielded a " technology turnover platter" in exchange for being allowed to exit the scene. All that rhetoric on this message board about brpurning the white card or splitting the vote served to remove those Board members who may have heard and refused "bread crumb" offers for the tech.
As a positive, if there is more than one Pharma with interest in purchasing rights to the PPHM technology, competition can still bring a long shareholder "happy ending" tech sale, especially if the long shareholder is in that Long 1 grouping (Average holding price < $7 pps). Long 2 shareholders (averaged holding price of $7 to $35 pps)-- who knows?
I am still very disappointed in the delayed Avid sales and observe how Roche is indirectly a player in any Halozyme order slowdown.
Best wishes and IMO.
KT
Realist, you wrote, "You now own a piece of a shrinking, cash incinerating CDMO business that is in desperation financing mode to stay alive."
Can you explain why you see Avid is in a desperation finance mode? Lias had said Avid would need to raise capital to step into the viral products market. If PPHM really zeros out its tech development costs in a few months and Avid sales base at current levels, is that a desperate situation?
Best wishes and IMO.
KT.
CP, you wrote, "SOMETHING IS NOT RIGHT!!! I just don't know what!".
I agree. My guess is that PPHM is clearing their books by posting losses reflecting losses of any sorts, delivering perhaps, what hindsight would show as a one time write off. Yet, an ambiguous excuse of "idled capacity" is offered. Could that idled capacity represent the ceased mabufacturing of PPHM tech products for trials, such that carrying costs must now book against Avid rather than be carried as PPHM R&D expense that translated to losses? In that case, until new customer sales pick up this slack, Avid operational losses will need to reflect this now idled capacity plus whatever slowdown of sales occurred due to the two Avid major customer order delayed delivery.
One might assume that Avid production needs to be above a certain percentage of capacity for an overall gross operating margin to be positive (profitable). Yesterday's investor Call suggests that Avid sales have fallen below that break even sales threshold-- unless the situation reflects a one time situation or the decision by PPHM to assign residual PPHM tech costs to Avid until the management team accomplishes that zeroing out of PPHM development costs they said yesterday is supposed to occur within the next few months. If Avid boosts sales to $90 million plus annually, the gross margin ought to quickly revert to positive territory, reflecting whatever the break even threshold has been reset at now that Avid needs to recognize the carrying costs for the two new 1000 liter reactors at the Myford facility.
Committed backlog? To me that means that Avid customers have a history of exercising their option to buy more product than Avid requires as a minimum commitment for the customer to subscribe "space" or capacity in the Avid mabufacturing production line. How much would that uncommitted sale amount to? I suppose zero to double, if PPHM/Avid only required a commitment to a half order to reserve a spot in the Avid production queue. That answer would be an Avid customer contract detail that is situation specific that we can only guess about.
What puzzles me is that these Avid dynamics are what Steve White checked out when he made those visits with PPHM about a year ago that were a precursor to Ronin stepping forward to set up what shareholders are, defecto, now being asked to 'bless" with the January 2018 proxy vote to approve the new Board of Directors. Ronin should have seen in advance, before the management takeover saga began, what we are now all seeing spread out on the table. What did Ronin see that has not played out yet? Does that BOD approval vote in January have to happen so that all residuals of the old PPHM is purged out, except the PPHM tech value sale executions, to enable the Avid plan to progress? So it now seems.
Best wishes and in my opinion.
KT
Cheynew, assigning blame to Worsely doesn't make sense when one looks at the reported financials from yesterday's call. Here is an excerpt quoting Paul Lyttle:
This brings me to our revenue backlog. As of today, our existing customers have signed and committed to $33 million in future manufacturing services, of which we expect to recognize $10 million to $15 million in revenue over the remainder of fiscal year '18.
In addition to our committed backlog, it's important to highlight that our customers have historically committed to services that cover a relatively short period of time as their project advances. Therefore, the committed backlog does not generally include all manufacturing services required to fully execute on their program.
As a result, we do have a soft backlog of business on top of what has been committed to, and our goal over the near term is to continue to convert the soft backlog to a committed backlog.
Let me shift gears now to discuss our gross margins on contract manufacturing revenue. During the current quarter, our gross margin declined to a negative 27%. This was mostly driven by manufacturing capacity that was not utilized during the quarter, also referred to as idle capacity. During the current quarter, idle capacity negatively impacted gross margin by 39 percentage points.
What was the Ronin team looking at when they made the play to value PPHM on Avis's growth potential? This financial reporting looks like PPHM is intentionally "clearing their books" so they can look to a fresh start in their FY 2019, which starts May 1, 2018. With hindsight, that $10 million Avid revenue shift into PPHM's FY 2018 was a harbinger of collapsing Avid sales as much as a tool by which good growth in FY 2017 could balance with reduced margins and loss of sales in FY 2018. In practice, the PPHM technology value development has been tabled to favor Avid sales development that had already stepped into gross margin losses! The end result is that PPHM technology investors are being distracted away from whatever tech value was set to be realized to a mabufacturing facility that has already overexpanded beyond its customer base. I am not happy to see that this dynamic has been played out, driven by a relatively new entrant investor group, who helped orchestrate an apparent disenfranchisement of long retail investors from the technology value development the retail investors helped fund over the last decade.
What is the value of the PPHM tech? Why would reduced utilization of existing Avid production capacity have flipped a previously reported gross margin gain to a substantial gross margin loss? What assurances are there that the last half of FY 2018 through April 30, 2018, will not also post gross margin losses? The $10 to $15 million in sales that Lias indicated are expected through April 30 may not include Avid sales posted over the last six weeks, but that amount is only about half the sales I would have liked to see post for a six month period.
So let's say Avid emerges with no cash drain from PPHM sales by the end of FY 2018 (April) plus Avid is still holding all the PPHM tech (no sale to Pharma yet). Also, figure Avid annual sales going forward at a base level of $30 to $50 million from its existing customers. Then apply the 6 + price to sales ration that Golfho suggested could apply. Assigned to 45 million shares that value roughs in a base pps valuation at maybe $4 to $6.5. That one year outlook, analyst price target of $10 pps back calculates to Avid annual sales of about $90 million or maybe double that currently being achieved. Can Avid double its sales from current levels by the end of FY 2019 to support a $10 pps price target? Can a PPHM tech sale deliver that and then some in a single transaction?
Best wishes and IMO.
KT
Cheynew, While I was looking for the call in info, I noticed that the after hours trading dropped the pps to $4 on low volume before the cc started. Compare that to the premarket trading when news of the trial dose mislabeling from CSM became known (many millions of shares traded). Also, as part of the "who's who" short interest mystery, there are clues this afternoon, LOL!
Regardless, I don't see the pps moving outside of the Ronin position establishment trading range until Avid mabufacturing sales news or PPHM technology sales news is released.
Best wishes and IMO.
KT
Threes, from a big picture perspective, I observe that PPHM just went through the biggest investor shakeout since the time I bought my first shares of TCLN. Now that the management at PPHM has also been shaken out, I am not clear about where you are going with pursuing the paths that the Ronin/PPHM Settlement Agreement addressed with the Standstill provisions. Designated parties affiliated with PPHM and Ronin can be subject to paying damage penalties if they violate the Settlement or encourage others to violate the SA Standstill terms, so what parties are still engaging the activities closed by the SA Standstill provisions and why?
Of course, parties with other affiliations are not bound by the Standstill provisions, but at least, PPHM and Ronin decided it was in their mutual best interests to sign the agreement and move forward. Do you see there are other parties' interests still being furthered by seeking to raise doubts about PPHM's successful emergence from the Settlement Agreement? Is yet another shareholder shakeout in the works (I certainly hope not, but...)?
I suppose, short traders could benefit, perhaps other Pharma that can financially benefit if PPHM does not succeed in achieving its business objectives? Maybe disgruntled parties like laid off employees (end of October was the time identified for completing the 20% PPHM staff reduction) would want to bring harm? Who else do you see might benefit from posturing further PPHM setbacks?
Best wishes and IMO.
KT
Threes, I presume not (no influence on the Ronin/PPHM Settlement Agreement), since your complaints involved allegations of criminal activity. In contrast, it appears the recent Ronin/PPHM Settlement Agreement and other events such as the CSM settlement and Delaware Court order addressing Board overcompensation complaints have dwelled within the realm of what can be viewed as Civil issues. Criminal investigations should not be expected to go away simply because a subset of the prospective victims, perpetrators or both that might be accused of a criminal act decided to enter into a civil issue Settlement Agreement. After all, the agreement merely imposes a standstill period and designates new Board members such that Ronin and PPHM are allowed to carry on with their normal business activities over the next year. Parties on the "PPHM stage" are just agreeing who should step on or off, going forward, and what they may be allowed to say about each other as they cross paths.
Do you know if the criminal investigations you initiated are still active? I hope for the sake of the Settlement Agreement opening an unencumbered path for PPHM to establish a Pharma deal that the investigative authorities you contacted have decided there are no signs of criminal wrong doing that warrant prosecution.
A lame analogy: A criminally charged snowball started downslope can get bigger and pick up whatever crosses its path, even if the party that launched the snowball later decides to step into its path to suggest to the snowball it can stop rolling now. As long as there is more downhill slope in the snowballs path, it will just keep on rolling.
Best wishes and IMO.
KT
There is a Board problem on iHub where a pop up redirecting from the iHub message board to another Board is occurring regularly. The Redirect is to: http://landingdisplay.page.user.liimrs.com/?Flow=1315115078837675&uid=9b6a07f05a227d2e0997800346ae34a9&toke=D0d0W9Xrz&pagecode=1511937942.3534&actken=RUWV0BF72XV1=DEn6T3g6WVArPojjBLSnTKblUmR6N1AqWFZBC0n3SHU3Wp5XD4bjDaBkP5S1VWN0CFD8YVF5Akr4TXgC
I presume the ads that partially block the message text while viewing and writing messages source from IHub approved advertisers, but the redirect that blocks returning to the IHub Board needs to be eliminated.
Thanks!
KT
Exwannabe, retaining rights to vote shares if the company wants to sell the company to Pharma is not the spoiler role I had in mind. Consider section 2 standstill restrictions, with emphasis on "standstill" when the various, what I consider as, "spoiler" actions (if practiced) are spelled out. Section 3 describes litigation restrictions that preclude spoiler actions due to matters such as initiation of encumbering litigation.
You may know that active litigation against a party, challenging their authority to represent the company, challenging financial dealings and such can be a spoiler for deal making unless the Pharma wants to carry the risk that claims can negate value in an agreement. The standstill agreement highlights/precludes some activities that I observe were in play before the Settlement Agreement, with identity of protagonists left uncertain.
The standstill agreement segment "is what it is" effective for 30 days past the 2018 ASM.
So whatever the influence was that may have been impeding Pharma deal making (if any), the standstill agreement precludes it continuing from the Ronin Group parties signing the Settlement Agreement.
Best wishes and IMO.
KT
From the 8k filing summary...
Pursuant to the Agreement, the Ronin Group has agreed not to take the following actions, among others, prior to the date that is thirty (30) calendar days after the date of the 2018 Annual Meeting (the “Standstill Period”): (1) propose certain extraordinary transactions, (2) solicit proxies, (3) join any ”group” or voting arrangement, (4) call or seek to call a meeting of stockholders; (5) submit nominations for a contested election, (5) seek to control, change or influence the management, the Board or policies of the Company, (6) seek waivers or amendments to the Company’s governing documents, (7) initiate or institute certain litigation or other proceedings against the Company or any of its current or former directors or officers, or (8) encourage or support any other stockholder to take any of the foregoing actions. Pursuant to the Agreement, if any of the Ronin Appointees is unable to serve as a director, resigns as a director or is removed as a director during the Standstill Period, Ronin may recommend another individual for appointment to the Board who meets certain criteria, including qualifying as “independent” under the rules of The NASDAQ Stock Market LLC, among others. Under the Agreement, the Ronin Group has agreed to be present for quorum purposes at the 2017 Annual Meeting and all subsequent stockholder meetings during the Standstill Period and to vote all of the Common Stock beneficially owned by it in accordance with the Board’s recommendations with respect to nominees to the Board or any other matter at each such subsequent stockholder meeting, subject to certain exceptions. During the Standstill Period, the Company and the Ronin Group have mutually agreed, subject to certain exceptions, not to make or cause to be made any statement or announcement that disparages, calls into disrepute, or otherwise defames or slanders the other party or any of its subsidiaries, affiliates, successors, assigns, officers, directors, board members, products or services.
North, after reading through the Settlement Agreement, I couldn't help but wonder about the section that effectively precludes Ronin from exerting a "spoiler" role for a Pharma deal during the stand still period. That has me wondering if the insertion of Ronin into PPHM affairs since last February was functioning in that deal spoiler role, whether intentional or inadvertently? The settlement agreement struck me as pretty "vanilla", all in all, focusing on legal logistics of the BOD being structured to include the Ronin candidates until the 2019 ASM BOD vote.
What was accomplished here? Writing colloquially,
- the old BODs is out for at least two years.
- Ronin associates agreed to cease engaging or causing others to engage in measures that could encumber PPHM business dealings, at least through 30 days past the 2018 ASM (about a year)
- ... and agreed to not engage in/pursue litigation, malign the company etc. That provision works both ways.
-sizing up or down of the BOD would still have the Ronin candidates one short of carrying a majority. (Board count less one divided by 2)
If indeed the old BOD was impeding a Pharma deal for whatever reason (asking too much? or ??), that dynamic is gone now. Similarly, if the presence of Ronin was impeding a Pharma deal, that dynamic is gone. Hmmmm.
Best wishes and IMO.
KT
Shipbuilder, I missed that Fiscal Year 2018 ASM nuance. Good catch.
Implications? I suppose that means Ronin will fade away from "activist" into just a large shareholder status. Also, there is no ten week stage carved out....but now what? What does Ronin/SW want now that they apparently achieved what they said they wanted in their letters to shareholders?
Best wishes and IMO.
KT
Processing the BOD announcement and posters' reactions, I have more questions. Questions fall in line with, what are the implications for long retail shareholders of PPHM going forward?
Obviously, earlier questions about how to decide to vote the PPHM annual shareholder meeting proxy have been answered for me. The BOD vote card will now have seven candidates designated that are not under contest by Ronin. The Ronin agreement to accept restrictions for 30 days past the ASM date, to me, means that PPHM gets an orderly ASM that can focus on whatever business is at hand. In effect, a stage has been set that gives stability through mid-February while precluding the prospect that the old BOD (now resigned) can do a deal, authorize a plan B or whatever, unless it was already set up and accepted by Ronin/SW at the time they signed this Settlement Agreement. So the question is, will there be meaningful new developments coming forth from PPHM to be voted on by shareholders for this ASM proxy? We should know soon enough, but more wait requires more patience. Ten weeks for a release of a restriction on Ronin activities is a very long time or a flash in the pan, depending on what transpires during the wait. Will new players step out on this stage?
Then there is the matter of the four resigned BOD status going forward. Do their options vest, giving them benefits if the pps goes up going forward? Did the Settlement Agreement serve as a vesting trigger, and why should it? Is there something in the works that can trigger a golden parachute for these players?
There is the matter of PPHM Technology rights and valuation. The UTSW assigned development rights to PPHM. The tech rights are up for sale. Have buyers come forward such that PPHM will become an Avid style CDMO soon? How will valuation of the tech translate to realized PPHM shareholder value?
There is the matter of Avid sales development under the new Avid President (Lias). Is Lias still targeted by Ronin to be displaced? If so, does the new BOD makeup enable that sort of clout for dismissal decisions? Is a rebound of Avid sales to Halozyme or others situated to be revealed over the ten week Ronin restriction period?
Posters noted that trading behavior seemed to settle into lower volume the last week or two. Does that suggest that the daily naked short behavior and negative posting by some was all part of a Ronin/SW orechestration until PPHM Board members agreed to resign as a Settlement Agreement was crafted and announced? Was the retaining of shareholder consultant services just to facilitate the Settlement Agreement or is there more to come?
There is much to consider with today's developments.
Best wishes and IMO.
KT
Bluerinse, can you expand on what you mean by now "they" steal the PPHM intellectual property?
Who is they? Also, what do you see constitutes value of the IP that is being stolen relative to what you see will get included or be retained in PPHM shareholder value realization?
Best wishes and IMO,
KT
CP, yours is an impressive prospective PPHM IP value analysis. Thanks for sharing.
Best wishes and IMO.
KT
4ourretirement, would an after hours buy today carry standing to vote those shares for the BOD selection? The date stamp matters unless the direct placement buyers are OK with investment value and authorization to vote in other than the current announced matters.
Best wishes and IMO.
KT
Threes, you and Bidrite have raised valid points, which I agree warrant consideration when deciding on how to vote the proxy. Certainly, just having "paid too much", in itself, does not warrant current markets returning the buy in, pps cost average if a deal with Pharma is delivered. Yet I observe that there is a continuum of PPHM tech development over the last decade that did accomplish some technical deliverables milestones, just as the trials designed to bring the tech to achieving FDA approvals have fallen short. PPHM has trial subsets of patients from a larger trial base showing success that needs corroboration from new trials designed with knowledge from the vantage points that previous trial efforts have established. Those trials need to be accomplished with significant new funding in ways that would not have been needed if the earlier trials had not encountered those "unusual" set backs.
I now consider who are the protagonists behind the dynamics that have brought PPHM to the situation today and how do those parties fit in to PPHM's path forward that delivers the best outcome for investor shareholders, patients afflicted with disease and other legitimate stakeholders. Do those protagonists get swept away as "sunk costs" that should not sway current PPHM decision making, especially the fall out from the pending proxy vote? There was a level of shareholder value being structured into PPHM trading at the time when the pps had crested above $5.50 pre Reverse Split. That value was just the market anticipation value that might have reasonably doubled or tripled when a Pharma deal was actually announced as having come to fruition, but that shareholder value realization progress was lost overnight (literally, via premarket trading) when the dose switching in trial control groups was brought forward.
Now that PPHM management is under pressure to monetize the PPHM tech through a sale to a Pharma while an investment group (Ronin) wants to oust PPHM management, has the expectation for a > $35 pps current basis become unrealistic? Perhaps yes, if the PPHM tech isn't really performing to bring meaningful benefits to patients under treatment. Likely no, if the PPHM tech has demonstrated when and how it brings patient benefits, either through diagnostics value, part of cotreatment or through direct therapeutic benefits in the manner trial work to date has set up.
I also consider how Avid value as a CDMO emerged as a progression from PPHM first preparing its own trial products using Avid as an in-house resource. PPHM began marketing Avid production for other Pharma product development, now generating $50+ million in annual sales and positioned to prospectively support quadruple those sales by just using subscribing unutilized capacity and the buildout plans for the third Avid facility. Avid value weighs in separately and in combination with the PPHM tech as any Pharma deal is structured. Maybe a Pharma interested in PPHM tech has no interest in dealing with the Avid CDMO valuation in its dealings? Maybe it does? In or out of a Pharma deal for PPHM tech, assigning a 4 to 6 price to sales ratio for Avid valuation to current sales and prospective growth in sales to subscribe unutilized capacity defines shareholder value not being recognized in the current pps.
Best wishes and IMO.
KT
Threes, discrepency in PPHM expectations has a lot to do with the Long Investor Group from which one gives reference. I refer back to my three long investor groupings that sorted investor cost averages separated around the two PPHM reverse splits (1:5 followed by 1:7). NASDAQ delisting risk was in play for keeping the pps above a buck before the reverse splits became necessary to retain NASDAQ listing, so thresholds of < $7 pps, $7 to $35 pps and > 35 pps cost averages would establish Long 1, Long 2 and Long 3 investor cost averages from over the last decade.
Is it unrealistic for those who invested two reverse splits back to be looking for the PPHM tech to deliver a greater than $35 pps "after the dust settles"? Regardless, Ronin is among Long 1 investors, trying to entice Long 2 and Long 3 investors to vote their proxies for the Ronin BOD candidates. That is a tough sell for retail long investors unless Ronin can show how they would do better in marketing/selling the PPHM tech than the current BOD. I am still watching for Ronin to show me their basis for "better".
Best wishes and IMO.
KT
Wook, maybe most interesting in the last five minutes of trading? After hours post as next days' business, as I recall.
Best wishes and IMO.
KT
Wook, Yes Monday is the day when "stock holders on record as of" gets fixed for voting proxy shares that would include the PPHM BOD vote. I am wondering what day shareholders find out what will be on the white card? Will there be any other, new developments that require shareholder approval?
Absent there being a hint of new developments forthcoming, Monday just determines who gets to vote for the BOD. Maybe Monday just turns out to be another hurry up and wait trading day?
Best wishes and IMO.
KT
Geo, I appreciate seeing notes like Biopharm shared here, where some insights into the professional PR firm PPHM has retained are provided. What PPHM has going now, with the management takeover attempt in progress, etc. is unprecedented in the time I have owned TCLN/PPHM stock. Why was that particular firm selected, why did Ronin enter the scene initially claiming no value for PPHM tech at the timing PPHM was scheduled per their business plan to announce achievement of self funding (but ended up announcing a sales slowdown), why did Halozyme do a slowdown, why, why, why?, all fits into what I consider when pondering how I will vote my proxy shares.
There are a cluster of posters who are writing things like burn the PPHM proxy white card (that has not yet been distributed, LOL), management are criminals, the tech should no longer be funded, Roswell Capital is a hedge fund too (like Ronin's team, but ignoring it was Schwartz multimillion in critical investments that kept TCLN/PPHM afloat years ago), the Board doesn't buy/hold enough shares and so on (and on and on, LOL)? Why was there CSM mislabeling, why Epstein politics and China order non delivery as the shift was made from TNT to Bavi, why did a Pharma bother interceding to claim their Tarceva sounded too much like Tarvacin (leading to rename to Bavituximab) after a medical conference presenting Bavi trial results, why, why, why? This all is taken into account with my evaluation, as well.
Timing of who has done what reveals much as to prospective intents and agendas. I am watching for news over the next week that changes the issues set up before and after that November 27, critical share holders on record date for proxy voting rights. Where is there volume that suggests voting rights balance matters to a big player, or affirms a step change in the pps in either direction may be in the works? What has PPHM management let slip about their "book of Secrets" content when Pharma came to visit and why is the ASM being held on the premises of an Avid facility this year? And no, these questions don't justify retaining or replacing management in my mind. The answers matter and I look to the next eight weeks or so to see critical answers delivered.
Best wishes and IMO.
KT
Bfiest, perhaps irate because the investigation process could impede getting Bavi or other PPHM tech back on track for development? Recall the CSM study group dose mislabeling was already delaying the PPHM business plan desired deliverables and collapsed the share price once the problem came to the forefront. PPHM agreed to settlement with CSM, such that participating in further criminal legal action against CSM would violate the agreement. Perhaps, because the investigation for criminal charges were being suggested by a party not knowledgeable about the PPHM "Book of Secrets", or maybe because an FBI investigation could breach access to trade secrets for Pharma not bound by confidentiality agreement?
An analogy-- I think back to my experience selling my house years ago, where the Realtor bungled the handling of an offer. Rather than pursuing legal action that could encumber getting the house back on the market, I instructed the Realtor to release the buyer and get the house back on listings ASAP. The house sold six months later, causing me hardship, but it sold at a fair price, nonetheless.
I hope you and all the iHub posters have a great Thanksgiving with family and friends.
Best wishes and IMO.
KT
Bidrite, thanks for sharing your situation analysis. Your post from yesterday clarifying that PPHM had retained the services of RBC to pursue sale of Avid in late 2016 adds more color to the choice. By that, I refer to what evolved going into 2017 when Ronin made first contact with PPHM management and raised issues that PPHM should be doing the opposite of what they had in motion.
What was PPHM doing? NOTE: this is PPHM's "old" strategy from 2016) Apparently.... (we don't know, but communications from PPHM support the theme), PPHM was exploring the sale of Avid so that PPHM could expect NASDAQ listing could be preserved without the reverse split, giving consideration to the cash reserve resulting from the Avid sale. In turn, the cash would have enabled PPHM to continue funding the PPHM tech development. We know that no such Avid sale occurred but don't know why.
Was there a Pharma on the scene negotiating for PPHM tech? We don't know. Collaborations would suggest PPHM was communicating with Pharma regarding the tech development.
Was there adequate Avid sales value for it to make sense for PPHM to do the sale? We don't know except we found out in the March time frame that Avid's largest customer was slowing down its orders. Total sales of $50 million to $100 million (near term to capacity ready to subscribe) would support the analyst projections that posted on the NASDAQ site, but buyer would have been needed. Maybe Halozyme itself?
What was Ronin doing? Apparently.... (we again don't know but for NASDAQ record trails and the Ronin letters to shareholders and draft proxy filings with the SEC), Ronin was advising to keep and grow Avid value, as that was their stronger asset, placing the PPHM tech on standby, to be sold as buyers are found. The Avid growth combined with PPHM assigning Avid sales value to Avid development might have delivered similar results in the near term share price if the markets properly valued Avid sales and growth.
Comparing pros and cons with the strategies gets more complicated because PPHM in their communications since the appearance of Ronin have pretty much translated the PPHM strategy to being much the same as communicated by Ronin. So what do the PPHM leaders bring to the table vs. Ronin leader candidates for growing Avid sales and bringing value to PPHM shareholders from the licensing and sale of the PPHM proprietary technology?
Best wishes and IMO.
KT
Peregri, that point fills in a critical sequence blank. Thanks.
Ironic that PPHM has been the beneficiary of such attention. It suggests that an Avid sale last year might have delivered the analyst target and avoided a RS, but left PPHM with...? for follow on value development. The proprietary tech... Hmmm.
Best wishes and IMO.
KT
Bigbro, I posted the NASDAQ short interest in an earlier post. Also the daily closing price and sales volume. Short interest reported in that way is the two week updates, so one doesn't know of short positions that open and closed within those periods, just the short interest on the posted dates.
Since the appearance and cover of the 4 1/2 million short shares in February/March is recorded by NASDAQ, there is no need for second guessing its existence. Attribution is speculation, but the PPHM ATM placements do not show a presence that would reflect the number of shares placed. You can look it up for yourself on NASDAQ records, if you like.
Do you know why Ronin (White) was in visiting with PPHM management in January? Chicago to Tustin seems to be a purposeful trip.
Best wishes and IMO.
KT
Bidrite, the Ronin proxy schedule of dates doesn't really lay out all that exchanged between White and King etc. but does indicate Ronin first contact with management in January 2017. Record of Ronin share acquisitions, more Ronin communications with PPHM, the ATM placements, the trial subset news, the appearance of the short position on NASDAQ, the disappearance of the short interest, the Halozyme order delays, the reverse split notice-- all occurred after that January Ronin visit. What Ronin may have known going into January is what was made public, such as at the 2016 October ASM.
I wonder what brought Ronin to PPHM's door in January before "the storm" of new events? Did PPHM invite them to discuss an Avid sale? Did Ronin decide the better arrangement was for PPHM to keep and grow Avid with Ronin acquiring and holding a lot of shares before markets properly valued Avid sales?
Best wishes and IMO.
KT
Jake, did you change your mind about the role of Ronin as a PPHM pending Pharma deal spoiler? I thought your original points had some merit. Per your latest call out, PPHM management could hold off accepting deals with Pharma to preserve their pay grade, but that seems unlikely when perhaps, only an acquisition deal might be expected to displace management from their jobs. In that case, management gets other compensation, so again unlikely.
The shift in rhetoric to put Steve King on Ronin's "must go" list has left me more concerned as to Ronin having sincere intentions for PPHM's future. Yet, my proxy vote remains undecided until shareholders actually have particulars before us. Missing pieces still need to be revealed.
Best wishes and IMO.
KT
Jake, from the points you raised (like what Pharma would do a deal with PPHM if their ability to follow through is questionable due to prospective management change?) it becomes apparent that the emergence of Ronin and subsequent proxy fight for Board control has a side effect of being a spoiler for any deals with Pharma that PPHM had in the works when White/Ronin visited with PPHM management early this year. I am not so sure the Ronin spoiler role would fit unless there is a second Pharma on behind the scene that wants to see Pharma deals fall through or if the dealing Pharma wants to weaken PPHM negotiation power. Much to consider there.
Best wishes and IMO.
KT
CP, your points are well stated. Thanks.
Best wishes and IMO.
KT
Cheynew, you raise an interesting issue here, as you wrote, "I think it is fair to say they actively worked to implement the r/s while telling investors the opposite. All the ATM sales at very depressed prices due to their flooding the market with shares, when they had $40 mil in the bank is criminal."
I have been wondering about motives behind PPHM raising about, what? $25 to $30 million through issuing more shares in the period leading into Ronin announcing they are seeking to replace PPHM management by displacing company Directors from the Board via the ongoing proxy fight. A momentum explanation for doing the ATMs would be how PPHM has been supporting their burn rate for research in this manner for years and had advised shareholders the mechanism would continue until a combination of growth in Avid sales and winding down of Sunrise trial obligations "self supported" PPHM funding needs. Are we there yet? Not that I can see-- closer but not self funding.
You suggest PPHM didn't need the money, pps was depressed, the ATM would be at a high cost of more shares issued, thus current management are criminals. Considering what was going on back in February/March, I see a better explanation can be that the PPHM management was sensing multiple threats to the company from sources known and unknown such that raising cash made sense to them. Ronin's emergence, delayed Halozyme orders, litigation, private communications or ?
There are lots of reasons to consider beyond those unseemly while we wait for proxy vote news. For example, how close would the PPHM cash balance be to not supporting ongoing operations if management hadn't augmented their cash reserves to compensate for delayed Avid sales and a proxy fight that would make use of the ATM more encumbered with cross purpose implications?
Best wishes and IMO.
KT
Wook, Isn't Monday 11/13 supposed to be a critical day for PPHM ASM action based on thirteen months from the last ASM? Parties with short positions may just be seeking cover over the weekend. If that is all there is behind trading and there is no news on Monday, we will have longer to wait for handles to emerge.
Something I am wondering about is whether Ronin would be involved with a filing with the Delaware Court to force an ASM or whether we might just see some unknown investors initiating the petition before the Court? It would seem that if Ronin were to do the filing, the legal process could shine a spotlight on Ronin's recent history with PPHM position acquisition and communications with shareholders. I am not clear of whether the filing will matter, especially if PPHM management brings forward some sort of Pharma deal needing share holder approval as part of the proxy vote. Wishful thinking?
Best wishes and IMO?
KT