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CP, Thanks for sharing your thoughtful analysis.
Regarding the proxy vote, I keep in mind that I need to separate what Ronin is doing and has communicated to shareholders from what parties on anonymous message boards opine. I don't buy into the theme that a private party can call Ronin (Steven White) and relay back what Ronin is about with full assurance they got it right or that I need to make such calls myself. Rather, focusing on what is publicly shared and carries legal accountability for the communicating party makes sense.
So in the spirit of "buyer beware", I am not waiting for or even want PPHM to start making their "book of secrets" public to help justify their situation while a hedge fund is making an attempt to take control of the company. Looking at the situation big picture, I observe that some significant, currently undisclosed development still needs to be announced publicly to bring clarity to the proxy vote. Speculating, I observe that PPHM management is not ready to release that missing piece, likely due to it involving third party influenced developments not yet delivered. The resolution is likely imminent, as that would help explain the wait for the announcement of the annual shareholder meeting and proxy vote particulars.
What is the missing piece(s) to be released? I have some theories, as I presume others here do. Incomplete information foments speculation.
Best wishes and IMO.
KT
Geo, the same answer applies.
You wrote: They should let us know if they have had any concrete offers that they rejected. If they have maybe the market would see others have shown interest.
And so forth.
That is, such info falls into confidentiality agreements that owners representatives legally need to honor. If Ronin wants to take control of the company but was not willing to sign a nondisclosure agreement to take a look at PPHM's "book of secrets" when Steve King offered, it makes no sense that PPHM should volunteer to release the info to the public because anonymous message board posters think PPHM should do so to answer to the critiques raised against the by the party that announced in a letter to shareholders how they plan to take control of the company.
If Delaware Judge Laster thought pegging BOD compensation to no more than 75% of a Pharma peer group comparator was exorbitant, he would have set the boundary lower. PPHM announced the basis for their BOD compensation, order compliance.
I am still awaiting Ronin to offer better reasons for me to vote my proxy for their Board candidates than reference to Board over compensation that was already being being addressed in the Delaware Court in March, when Ronin was acquiring their position in PPHM, or to stop PPHM tech research to favor Avid development that was already underway by the business plan being worked by the existing Board.
The message board banter is what it is-- the opinions of anonymous posters that choose to write about PPHM. My opinion is that new information needs to be released for the BOD vote dynamics to fall into place, more than just an annual shareholder meeting time.
Best wishes and IMO.
KT
Geo, you have raised this point in different ways several times now. That is, that the PPHM management team needs to respond to Ronin accusations to defend themselves. Quote from your post:
"For those who want to keep the current BOD should demand that they come clean. If truly there has been no offers but they have done such a great job then where is the value. Take a stand. Bio, CP, KT, etc. where is their explanation. "
A few observations come to mind.
1. Ronin (Steven White) is likely one of several/many that have visited PPHM to size them up (Steve King said several suitors have come to call over the last couple years). The PPHM BOD and management team function in the "owners representative" role when these visits occur.
2. Per the Ronin letter to shareholders, Steven White visited and toured facilities, meeting with the PPHM owners representative (King and others) discussing the PPHM business plan and Avid business particulars.
3. Per Ronin, King offered and Ronin refused on at least two occasions, to show Ronin the PPHM proprietary tech until after a nondisclosure/confidentiality agreement is signed.
4. You are now suggesting that the PPHM owners representatives volunteer information of the nature that they were requiring the signing of the nondisclosure agreement "to defend themselves" against Ronin accusations.
Can you see why I am not expecting such info to be released beyond what is appropriate to share in investor calls or quarterly reports?
Best wishes and IMO.
KT
Andy, Agreed.
My "buyer beware" alert goes off in full whenever the sales pitch fever goes to such intensity. Anonymous message board posters are trying to talk me into yielding my ownership position proxy vote to an investment group I never heard of six months ago, using the argument that the TCLN/PPHM technology development I have been tracking by reading medical articles and following trial progress for over a decade is worthless. That makes the long retail investors like me idiots, ripe for fleecing, I suppose.
The sales pitch goes like this:?? Long retail investors should burn a white proxy card that likely has not even been printed yet for voting at an annual shareholder meeting that has not been scheduled yet for Board candidates that may not have been fully announced yet because the BOD gave themselves too much compensation and because a trial was halted and because an Avid customer delayed their orders and because a hedge fund group has proposed four candidates who they say will shift the PPHM management plan to that of a mabufacturing company, tabling the development of the worthless PPHM technology? Say what!?
I like the notion that an outcome that none on this message board have envisioned is forthcoming. It has to make more sense.
Best wishes and IMO.
KT
Jake, by the "sleaze" rationale, it can be noted that the Chancellery Court imposed a discipline on PPHM board compensation that reined compensation in. Seventy-five percent of peer company Board compensation is not as much a constraint as some wanted to see, of course. So is PPHM complying with the Court's BOD compensation restriction a resolution for the sleaze perception?
Also, looking back to the CSM patient dosing material mislabeling, that is a big "sleaze" indicator that does not appear to have been reconciled, at least not if one presumes that the CSM staffer was acting on behalf of a third party who was seeking financial benefit through the encumbrance of PPHM trial success. If one believes the CSM staffer(s) actions were a simple mistake, that matter can be considered resolved for sleaze factor too. The Court facilitated a settlement and the records were sealed, so PPHM investors cannot know.
Best wishes and IMO.
KT
Exwannabe, thanks for clarifying.
So tax loss carry forward is limited to valuation/earnings by PPHM or the PPHM intellectual property that translates to earnings for the Pharma down the road, with annual limitations.
If PPHM has accumulated losses of $600 million that reflect the cost of developing their tech, building out Avid, running trials and such, it appears that there is a basis for TLCF to offset earnings posted by the acquiring Pharma over time plus for reducing the recognized book price for the acquisition.
I agree, figuring out such analysis on a message board is not a good match, at least until an acquiring interest's situation is defined.
Best wishes and IMO.
KT
Jake, why is the disposition of the 3 targeted BOD members a factor in your analysis? I recognize the BOD compensation and Delaware Chancellery Court decision issues. Yet, tech value is what it is, unless the underlying theme here is how the three BOD members may have said "no" to a deal offered by a Pharma and Ronin taking the reins is viewed as giving the deal back to Pharma on their terms. That being the case, tech value being realized in the share price is not really being accomplished, it seems.
Best wishes and IMO.
KT
North, I have been wondering if Halozyme orders might increase after they did a new issue to expand their cash reserves. Anything from market signals for PPHM seems to be getting overwhelmed by noise from other dynamics associated with the emergency of Ronin's 8.9% position in PPHM. If the Avid sales are "snapping back", is there any reason why Ronin would not already have known this while doing their letter to shareholders and preliminary proxy?
Best wishes and IMO.
KT
Corporal, are you saying that, if PPHM gets acquired by a Pharma, the acquiring Pharma will not be able to use the PPHM tax losses to offset their earnings?
If not, why not?
Best wishes and IMO.
KT
Jake, yes technology development has been moving on. Yet, if it is the interpretation from Pharma that PPHM's technology rights are a real factor for reconciling as the Pharma moves to develop their own platforms, there is value from acquiring PPHM without needing to do anything to further research of the PPHM technology, considering how some might view acquisition to be a better option than doing tech agreement with PPHM. Recall how the PPHM management team includes Board members with experience from when PTSC successfully suing for patent violations.
Avid value complicates the easy PPHM tech rights acquisition approach, unless the party with acquiring interests seeks to make the case that PPHM tech is worthless for technology rights, such that the acquiring interest only tries to focus on Avid value (sound familiar?). So what is Avid value?
Hopes for Avid sales to move up to $160 million while maxing out Avid capacity (a high side scenario) were dashed when Halozyme did their order slowdown, but acquisition analysis might still need to reconcile that threshold of sales value while negotiating a deal. The Pharma industry typical 4:1 price to sales ratio works out to valuing PPHM at over $4 pps if sales are sustained at $50 million per year (current status). The $160 million sales figure would spot Avid's contribution to PPHM market cap at about $13 pps.
Of course, we don't have enough information to ascertain Pharma interests and Pharma's sense of how PPHM tech rights need to be reconciled. We do know that PPHM technology rights are situated to extend out several more years, so if the Pharma wishes to engage with PS targeting or other PPHM proprietary tech, there is incentive for the Pharma to consider acquiring PPHM before someone else with such interests acts to do so.
$600 million in accumulated PPHM losses can offset the same amount of Pharma earnings before going to the Pharma's corporate tax tables. Months ago, I looked at California corporate tax rates but don't recall the particulars. Figuratively, if State plus Federal combined corporate tax is a 50% tax rate, there is a Pharma $300 million tax value in a PPHM acquisition, which works out to over $6 pps (assume less than 50 million shares).
Add the four components to estimate what PPHM might be worth:
1. Tax loss value of $6 pps.
2. Avid sales value of $4 to $13 pps, current vs. full subscribing of current Avid capacity. This is not counting further Avid capacity expansion value that is streamlined due to the Avid ongoing enterprise advantages.
3. PPHM technology rights value of $$$ TBD
4. PPHM technology partnered development value of $$$ TBD
The low side is maybe $10 pps reflecting known factors without valuing PPHM tech or growth in Avid sales. The high side is double that for valuing known factors like optimized Avid sales while using current capacity. Confidential PPHM tech puts a + sign on the a $20 pps high side.
I am not clear on where Ronin taking PPHM management control fits into the big picture for building PPHM value here. I still am viewing Ronin with caution, wondering about what Ronin brings to the table that PPHM won't achieve when Avid's new President starts bringing in new orders.
Best wishes and IMO.
KT
North, in order to answer your PPHM value question from a position of knowledge, we need that peek into PPHM privately held information offered to Steve White when Ronin was checking out Avid prospects. Ronin declined to sign the necessary confidentiality agreement to get the inside look at the PPHM technology, deals that may have been drafted and so forth. Retail investors are in that unknowing status, without getting a choice.
Absent that look, we know that Avid is a few customer orders away from delivering on the analyst projected $14 pps that lost momentum when Halozyme delayed their orders. No PPHM tech valuation is in that $14 pps, while some would have us believe that Ronin would do better than Avid's new President in getting more Avid orders. Should Avid value consider the subscribing of the two new 1000 liter bioreactors or the next Myford facility buildout that was placed on hold, awaiting customer orders? Existing capacity could support the $14 pps valuation if fully subscribed and a 4X price to sales value is assigned.
We also know that PPHM accumulated losses can reduce the tax burden of an acquiring Pharma, providing some deal value. Remarkably, that tax loss buyout value could account for value more than a the $4 pps posted with today's trading, all by itself.
Buyout value over all needs that confidential look that the acquiring party gets to see if they sign the PPHM confidentiality agreement. We can only speculate from PPHM pharma conference presentation material and PPHM SEC disclosures. I don't agree the PPHM tech should be valued at zero during a buyout.
Best wishes and IMO.
KT
Bungler, Interesting schedule.
It sounds like Nov 13 just serves as the date after which a shareholder can Petition the Delaware Chancery Court to order an shareholder meeting. If one presumes the Court designates a month lead time for the ordered meeting, the earliest ASM would be December 13 plus however long it takes someone like Judge Laster to receive a petition, provide due process and make a decision to call the meeting. That could shift the ASM into early 2018 (it took about four months for the BOD compensation complaint to process, did it not?).
I am still waiting for that missing info piece to materialize, with its announcement, perhaps resulting in PPHM management announcing the ASM. That could mean no Court driven scheduled is needed.
Best wishes and IMO.
KT
KU, LOL! When Ronin and SWM established their 8.9% position in PPHM, the pps crested at about $5.75. Was it hedge funds or parasites that walked the pps down again, below $3? Whose actions have contributed to the pps crawling back to $3.75? I am not seeing much difference between your comparison, LOL!
I wonder how long we need to wait for the shareholder meeting and proxy vote?
Best wishes and IMO.
KT
Bigbro, the Phase 3 trial was halted but-- failed miserably?-- those are your words. If you believe the PPHM tech doesn't warrant any more development resources be applied, that puts your view in alignment with Ronin's letter to shareholders.
Biopharm and others have cited multiple paths for PS targeting technology value. I didn't invest in PPHM for just to watch PPHM optimize Avid value. Avid remains a resource for helping PPHM technology development become self sufficient.
Ronin communications have not won my confidence to vote my shares for Ronin endorsed BOD candidates. A hedge fund taking control of PPHM is no small matter. My consideration of external measures taken and being taken that serve to delay PPHM tech from getting to market is part of my deliberation for voting my shares. It is also apparent that critical information for decision making has still not been delivered and I see it as no coincidence that we are still waiting for PPHM's announcement of PPHM's annual shareholder meeting.
Best wishes and IMO.
KT
Geo, Doesn't the matter boil down to how a hedge fund is asking long share holders to give them management control of PPHM?
The CSM, Bavi trial dose mislabeling continues to be a pivotal issue for me. Outside parties acted to throw PPHM off from getting their tech to market. Then enters Ronin with a letter to shareholders explaining their plan to put tech development on the back burner while their BOD selections guide PPHM into being Avid, a mabufacturing company.
The Delaware Court decision against the BOD compensation has its decision timing align with announcement of delayed Halozyme sales and the apparent falling through of whatever PPHM may have had in play to avoid the reverse split. Which of these are cause and which are effect!
There is much cause to effect caution. LOL!
Best wishes and IMO
KT
Jake, have the DS transcripts been posted somewhere other than going through the Court Clerk, purchase route? There were just a few short excerpts posted on this board that raised more questions for me than were answered.
Thanks,
KT
Jake, you just described one of the primary reasons why I am concerned about Ronin's emergence at this timing (timing when PPHM was signaling that they could avoid the reverse split due to recover of share price, through now).
You wrote:
Why would any BP sign a deal right now with the current crew knowing full well that a change is probably forthcoming and at a minimum will need approval by the Ronin crew and supporters?
We will find out soon enough whether change is forthcoming, but the emergence of Ronin since March along with various threats for legal action does make closing a Pharma deal more complicated.
I don't see the next part of your point being consistent with the first unless you view Ronin as being the tool for a big Pharma.
You wrote:
only way BP does a deal is if BP takes control of BOD
Care to elaborate?
Best wishes and IMO.
KT
IFU, Ronin is telling long shareholders we should vote for their plank of Board candidates because Ronin has a plan to do better than the current BOD. My what ifs are exploring what that shareholder value improvement might mean and what Ronin might bring forward that is any different. More Avid revenues? A Pharma deal? Nothing? Other than anonymous message board posters that have been dissing the PPHM management history as giving cause for shareholder discontent, there doesn't appear to be any "substance" behind Ronin promises. That is, there is no reason to presume that Avid will sell more services under Ronin than under the current management team supported by the new Avid President brought on board to expand Avid sales. Ronin might claim that the new Avid President is a response to their letter to shareholders, but we have known that Avid sales growth has been a priority long before Ronin emerged as a hedge fund based share holder.
I am still waiting for delivery of the missing piece leading into the ASM. If there is no missing piece being prepared for delivery, there likely is no reason as to why the AS meeting time announcement has been delayed. The Ronin team announced how they toured Avid facilities twice but have declined to sign the confidentiality agreements that would allow them access to PPHM technology partnering status. What did Ronin figure could extract value through Avid development that warranted their proposal to take control of the PPHM BOD? More likely, there is that missing piece that explains behavior. When will that missing piece emerge? For now, it looks like Ronin is just positioning to encumber PPHM from doing --- ???
Best wishes and IMO.
KT
Corporal, to your point, when Avid delivers sales sufficient to cover the ongoing cost of PPHM operations and overheads, including PPHM research, PPHM can continue its business plan using self generated funding. In turn, the At the Market funding mechanism will no longer need to be used to fund PPHM research or cover PPHM overheads. But then, you know this.... I think back to when long investors thought it was a big deal when Avid sales reached the $1.5 million mark and were looking forward to how Avid could grow up and help the parent. At that timing, current Avid sales at around $50 million would have been considered a huge accomplishment.
Something I have been mulling over is a couple avenues through which PPHM could show success that could move the share price up. If one of two avenues are delivered, then what happens to the pps?
1. Avid earnings growth. What if Avid sales steadily exceed $100 million, effective the end of FY 2018? How about $200 million by 2020? One might assume the $100 million annual sales level delivers enough net surplus to eliminate the need for further ATMs, at maybe $30 million annually (30% margin). The $200 million would fund the PPHM research at current levels plus some surplus, $60 million annually overall. What does PPHM do with this resource? How does the pps respond? Note, I already default to a 4X Price (market cap) to sales ratio. That would have the pps achieve maybe $8 to $16, rounding, but gives no value to the opportunity represented through investment of the revenue stream or any PPHM technology value. Ronin has proposed reinvesting the resource into Avid, which raises a question for me as to how much more money Avid needs at this point, considering they already have a couple 1000 liter reactors reach for production to serve new customers and have a third manufacturing facility plan on hold, awaiting new orders.
2. A Pharma deal. What if PPHM received an up front cash payment from a Pharma deal? Since Avid sales are expected to be recurring annually, a $30 or $60 million cash payment for a Pharma deal is not equivalent to Avid sales delivering net earnings of that magnitude. Rounding up to 50 million shares outstanding for easier math, a Pharma cash payment can serve to defer PPHM's need to seek other funding to support PPHM non-Avid operations a year or three or cash reserves would by $0.60 to $1.20 per share. Equivalent value from a Pharma deal payment compared with recurring Avid sales would need value from other aspects of the partnership to give promise of more benefits to carry value like Avid sales growth. The details of a pharma deal regarding long term shareholder value would be needed.
What is a realistic threshold for Avid annual sales potential if Ronin leadership takes the reins or if PPHM continues their business plan with their new Avid President prioritizing Avid sales? What is Ronin offering that is not already in place, besides a BOD that would prospectively sign off on less resource assigned to supporting PPHM research? Just some what ifs.
Best wishes and IMO.
KT
Corporal, there is no revelation here. Avid revenues posting at $50 million exceeds expenses for Avid operations, generating cash to support other PPHM activities. The PPHM downsizing in staff and lower research outlays brings PPHM close to self funding their activities. Growth in sales targeted with the hiring of a President for Avid is part of the PPHM business plan for completing self sufficiency. If Avid sales continue to dwindle, PPHM will continue to fall short. If sales grow, per projections before the Halozyme slow down in orders, self sufficiency is achieved.
FWIW, the Avid value component was cited by Ronin as an underlying theme for their wanting to take the reins for PPHM management. It is the Ronin acknowledgement of PPHM technology value (or lack thereof) that was under discussion on this board after the Ronin letter to shareholders. Now Ronin has proposed a Board candidate that carries experience in the areas that PPHM tech development has been targeting, which I see as an interesting new development from their SEC filing.
My sense is that there is a missing component/consideration that needs to be announced leading into the ASM that will better clarify for me which way to go with my proxy vote. We shall see. For now, the factors that dropped the pps down to about $3 after the entrance of Ronin's group with their announced 8.9% position in PPHM was associated with the pps moving above $5.5. Until I see a pps rise above the $5.50 level, I will view the pps movement as just being an artifact of a hedge fund acquiring a position and short interests acting to drive the pps back down while investors await news of new developments. Perhaps, you have seen all the news there is to be expected before the ASM?
Best wishes and IMO.
KT
TOG, I agree. Regardless, I still see it as no minor thing that a hedge fund is taking measures to attempt to take control of the PPHM BOD at timing when Avid sales are getting close to making PPHM self sufficient for operational AND research funding.
Best wishes and IMO.
KT
Wildhorses, The Ronin proxy significance also carries the obvious written in the filing. A fourth Ronin supported BOD candidate has been named such that their theme of retain Steve King and replace the rest of the Board has been sustained. Also, procedurally, the fourth candidate situated Ronin for addressing a prospective 4 of 7 majority if PPHM surprises the situation by following through with a seven BOD shift leading into a yet to be announced ASM. Ronin may seek to win control with 4 of 5 Board members, 4 of 7 or offer two or three more candidates if PPHM announces the seven member Board.
If PPHM games the system to go up to 9 members to outmaneuver the situation procedurally, that would be enough to shift my support to Ronin. For now, I am still awaiting to see what is on the table when the time to vote my shares comes before I decide. Ronin still exhibits elements of being a long term investor, unrealized value spoiler that I need to see resolved before I decide to go that way.
Another obvious dynamic is that the pps crested at about $5.50 while Ronin was acquiring their 8.9% PPHM combined position. If subsequent shorting was being used by ?? to suppress the pps while we all await new developments, the covering of short positions when news is imminent might return the pps to that ball park.
Best wishes and IMO.
KT
Bfiest, I observe Ronin is accountable for what they disclosed on their proxy and other written material made public and filed with the SEC. I have not. called any of the PPHM BODs or Ronin reps to hold private conversations. If I did, I would expect to hear what is available to all investors through public filings.
My observation that Ronin has drawn a boundary against reviewing PPHM proprietary technology (declining the signing of a confidentiality agreement) comes from reviewing Ronin's public proxy statement. If there is a distortion of what Ronin means by assigning that boundary for viewing the PPHM proprietary tech and Ronin thinks clarification is warranted, I encourage Ronin to enlighten those reading the public filings by providing clarifying public filings. I don't want nor can I trust a Ronin "inside scoop". The same holds true for calling PPHM's BODs.
I listened in on PPHM's investor call today and found doing so useful for my due diligence. Reading the Ronin proxy was useful for my DD. I look forward to reviewing whatever clarifications Ronin wishes to publicly share before the October annual shareholder meeting as I consider how to align my proxy vote.
Best wishes and IMO.
KT
Horselover, as I look at the dynamics surrounding PPHM and the emergence of Ronin, who is seeking to have their candidates take a BOD voting majority, something in the Ronin proxy strikes me as significant. That is, the chronology of events cted by Ronin indicates Steve King offered Steve White the opportunity to view PPHM proorietary information at least twice, but White/Ronin declined to sign the required nondisclosure agreement each time. Rather, the Ronin chronology indicates that Steve White asked to tour Avid facilities and did that at least twice. Their Proxy indicates to investors how Ronin is pursuing a path to take BOD control, then pursue Avid development while acting to quickly monetize whatever value Ronin leadership can get for PPHM tech through Pharma deals.
Now consider how long investors are being called upon to align their proxy vote with Ronin, accepting the Ronin announced strategy to pursue Avid value development and to sell off the PPHM proprietary technology, while applying Avid revenues to optimize Avid development. Ronin has written in their proxy that Ronin declined to sign the nondisclosure agreements, leaving it clear that Ronin has received no private briefing about the substance behind the PPHM technology development from PPHM. Ronin apparently doesn't know about PPHM tech details with intentional purpose, so that Ronin can avoid legal encumberances that could preclude pursuit of their Avid development plan and Ronin's stated intent (in their Proxy) to represent other PPHM investors by offering their new Board candidates.
This, combined with recent postings emphasizing PPHM technology rekated potential shared by Hutsch, Bio and others is signalling to me that Ronin is seeking to take control of PPHM using methods likely not in the best interests of long time long investors by setting up an orchestration to bypass the current PPHM BOD control over any negotiations with Pharma that may be underway, without Ronin even engaging in the nondisclosure agreement that would back up Ronin claims of no PPHM tech value warranting continued development.
As I am reading the Ronin proxy statement, it is becoming clearer to me that Ronin should not get my proxy vote, simply due to the emerging signs of Ronin intentions to intercept PPHM tech value consideration in PPHM's business plan if the Ronin Board candidates are elected. I am still ooen to considering new information on this point about Ronin intentions, but Ronin's choice to stay uninformed about PPHM proprietary tech seems to be just a pragmatic way for Ronin to feign plausable deniability about PPHM tech peospects while trying to woo my proxy vote to support their shifting the PPHM business plan to an Avid only development focus. Yikes! Am I misreading the Ronin proxy?
Regarding the announced September 11 investor calk, investors already know $10 million in 2017 FY sales got deferred until PPHM's FY 2018 and we might find out tomorrow during the PPHM investors call that this revenue posts in the first quarter, but maybe not. Avid is suposed to have about $55 million +/- in FY 2018 revenue, per the last PPHM investor call, down from that needed for PPHM to self fund PPHM research from Avid earnings, i.e. Achieving "self sufficiency". I will be listening to what Avid has been doing to get sales back on track and PPHM achieving full support of ooerational cash needs from internally generated funds.
Best wishes and IMO.
KT
Threes, you are being a bit cryptic, i.e. talking to Orange County Attorney General. Didn't you indicate earlier that the SEC made a referral of your complaint to the California AG? Why would the Orange County AG be involved with a nationally traded company incorporated in Delaware with their operating offices in Orange County?
Did the CA AG give you any feedback yet? I am presuming that any investigation into the use of At the Market Placements, assignment of options or other Board of Directors compensation would include an investigation of short sale history, including the high proportion of naked short sales over the period surrounding the entry of Ronin and the NASDAQ reverse split to retain listing. If not, can you suggest to the investigating parties that the short trading parties also be investigated, as it seems that those shorting practices may have helped facilitate the ATMs or contributed to financial hardship conditions under which the current PPHM BOD made decisions.
Best wishes and IMO.
KT
Peregri, I read through the Ronin proxy statement dated August 29, 2017, which includes some statements regarding how Ronin intends to address the PPHM proprietary technology. Considering the recent date, I presume the proxy statement reflects Ronin's thinking regarding the question I asked regarding Ronin's plans for PPHM intellectual property development.
Best wishes and IMO.
KT
Excerpt from the August 29, 2017 release of the Ronin proxy statement:
"On July 13, 2017, Ronin issued a public letter to stockholders announcing the nomination of the Nominees. In the letter, Ronin explained its belief that there are opportunities to increase stockholder value at Peregrine; however, Ronin is concerned that stockholders will continue to suffer unless there is a change in strategy and the Board is reconstituted with directors willing to represent stockholders’ best interests. Specifically, Ronin called on the Company to immediately halt further clinical development spending on bavituximab (the Company’s immunotherapy drug candidate), monetize the intellectual property and then refocus on profitably growing Avid. Ronin also expressed its concerns with the poor corporate governance, apparent misalignment of interests and constant dilution that has persisted under the leadership of the incumbent Board and questioned the ability of the Company’s non-employee directors, Messrs. Johnson, Pohl and Swartz, to effectively oversee the Company.
· Also on July 13, 2017, the Company issued a press release acknowledging receipt of the Nomination Letter.
· On July 14, 2017, Ronin filed an amendment to its Schedule 13D disclosing the delivery of the Nomination Letter and the issuance of its July 13 th public letter.
· On July 20, 2017, Ronin issued a public letter to Peregrine’s employees in which it elaborated on its strategic vision and intentions with respect to the Company. Ronin made clear its belief that Peregrine should invest significantly more into Avid with a long-term view on its profitable growth and that Avid should no longer be used to prop up Peregrine’s failed clinical development business.
8
Peregr, the staff reduction and other measures are supposed to reduce PPHM operational costs $7 million annually, such that the cash flow for Avid sales vs. PPHM outlays would be about $20 million out of balance, going into their fiscal year 2018, based my read of the annual report. Is that about right?
That $20 million shortfall needs to be addressed, either through more Avid sales, less PPHM spending or more capitalization such as through the ATM mechanism or some new path. If Ronin seeks to balance the books by halting research, is that the best path for long term shareholder interests? How about if PPHM management adds 15% to outstanding shares via the ATM? That appears to be a key oart of where the orixy vote outcome impacts PPHM's near term financials.
Regarding large investor shorting practices, year after year, we saw the Russell Funds enter and exit PPHM positions with short interest adjusting to appear to hold the funds relatively harmless during the Russell rebalancing period. Had PPHM implemented the reverse split earlier, there is a good chance PPHM would have again been listed on the Russell and the short interest would be higher, accordingly, but PPHM chose not to do that Russell influenced move, this time. I am presuming a hedge fund like Ronin could use short trading to hedge their risk like the Russell funds appear to have done, in the event that Ronin decides to exit their position? Is that happenning? The naked short path leaves position shifts in unknown status, at least for a while, it seems. If not for Ronin, who is doing the recent naked shorting? Who benefits? Might PPHM itself be preparing the short to support more ATM placements to raise the $20 million?
Best wishes and IMO.
KT
Geo, I don't mean to be trite about the matter, but what does PPHM technology being "aggressively shopped" mean relative to what may already be underway? Investors have a hint of what tech development has been getting furthered, based on reporting of conference poster sessions. Has the tech development achievements reached the point wher the tech is ripe for being aggressively shopped to Pharma? If not, what is missing that would justify more resources being applied to the PPHM tech development? If so, what is not getting done for shopping the tech out to Pharma that should be getting done? It seems the current BODs knows those answers based on their business plan updated when PPHM announced their 20% staff cuts, including cutting PPHM research support staff by half. So far, shareholders are left with filling in conjecture for Ronin intentions for PPHM tech, it seems.
Best wishes and IMO.
KT
Bfiest, good point about questioning performance. Yet now shareholders and PPHM's business plan are at where the PPHM BOD performance has brought them. The priority issue seems to be that a hedge fund has come forward wanting to take over PPHM leadership, offering to prioritize Avid value realization while placing PPHM tech development on the back burner. The current team has a plan to keep tech development active while likely needing more ATMs to balance spending until Avid sales and spending management align, that is, PPHM achieves its goal to fund research from internally generated cash. Unless Ronin affirms an acceptable PPHM technology development plan that is appealing to assure long investor value realization, they are not offering much beyond inserting three wild card Directors who will accept lower compensation and a risk that PPHM tech development value gets "left on the table" for realization by others.
Best wishes and IMO.
KT
Geo, another point on the BOD compensation-- that is, when those two investors brought suit against PPHM citing Board compensation including options pricing, it seems that they brought closure by setting up a settlement agreement with the PPHM BODs, brought before that Delaware Court for approval. Those two parties provided fror $750,000 in compensation to their legal team, coming from PPHM, and structured their legal challenge so that it supplanted whatever challenge retail investors like myself might think should have been the compensation outcome (at least, the notice indicated investor rights could be affected). I received the proposed settlement legal summary in the mail as a shareholder on record, like others on this message board indicated they did. If I had a gripe about what was in the works, I had a few days notice to arrange being present at the July 27 Delaware Court hearing to voice my concerns with the proposed settlement. I believe that your 25% of peer Pharma compensation point of view had the same chance to be vetted before the Delaware Court as any number I might have preferred.
That in part, is why I mostly see the BOD compensation issue as being a red herring style distraction for swing vote retail investors to fuss about while a hedge fund attempts to take control of PPHM's intellectual property development. With the benefit of hindsight, we can see the Delaware Court, Investor Settlement Agreement already lifted the reins on the BOD compensation issue before retail investors like myself even knew that Ronin had intentions to take over PPHM by establishing a position just below the poison pill threshold and writing a letter to investors attempting to sway the swing vote retail investors to elect the Ronin BOD candidates. The Ronin letter to shareholders focused on flagging current BOD compensation as excessive even though timing of legal filings had already directed the resolution of the investor suit to the Delaware Court. Again, hindsight allows the time line to be studied for who did what when.
FWIW, all this is new to me, but I still need to deal with it as part of my PPHM investment due diligence, like it or not. Perhaps, you or others have experienced take over attempts that involved wooing your proxy vote before and have done your DD about your PPHM proxy voting preferences. Certainly, I offer no investment advice here as I seek to figure out what is going on with PPHM, Ronin and other parties with interests in PPHM technology development and tech rights going into the October ASM.
Best wishes and IMO.
KT
Geo, the mantra on this board has been to pound the current BODs about their compensation, just as the same parties want to give Ronin a "bye" on disclosing Ronin's intentions for PPHM's intellectual property. Diversions for ultimate inestment motives are as they are, but I invested in TCLN/PPHM for ther proprietary anti cancer and anti viral research, not the Avid mabufacturing sales potential. Avid had minor sales when I started investing in TCLN. It is excellent that the current PPHM management team groomed Avid development so sales have exceeded $50 million per year. That foresight is now giving all PPHM investors some investment risk hedging.
Is Ronin using that risk hedge? It appears more than just a risk hedge since Ronin has only ID'd Avid value development as their focus for placing their BOD candidates. Before Ronin gets my proxy vote for their BOD candidates, they need to give an accounting for how they will address the PPHM intellectual property I invested in PPHM for, in the first place, not just make claims about extracting big value from the Avid risk hedge. If Ronin has no plan for the PPHM tech because of whatever reason, I see that as a big negative for their leadership. Some posters on this message board have suggested Ronin leaders will farm the tech for independent valuation, but I have not seen that in writing from Ronin nor am I comfortable with that sort of a response.
Now that shorting has abounded since the shareholder on record cutoff for the October proxy vote for the BOD's, how can the retail inestors targeted for their swing vote have any assurance that Ronin didn't position their holdings for an exit to in the event that their candidates don't get elected? That is, a short hedged exit letting Ronin move on intact and leaving PPHM long term investors with the aftermath of a grand gyration from a failed take over attempt? Who benefits from the shorting that has been supressing the pps in recent trading?
Best wishes and IMO.
KT
Holotawoopas, you raised an excellent point. That is, you are seeking suggestions about why the shorting and naked shorting might have increased so much after the cutoff date for voters on record to vote for the BOD candidates at the October Annual Sharehokder Meeting.
A couple clarifying questions come to mind that put your point into better context.
First, do we know that the pre and post cutoff date saw a step change in short selling? If so, by how much?
Second, would SEC reporting of shares held >5% be impacted if shorting involved borrowing against those shares for establishing naked short settlement +3 days or other SEC compliance?
Third, whose BOD election position would be strengthened if a short affected, lower pps is being experienced while retail investors are submitting their proxy votes?
Fourth, how many extra ATM shares would need to be placed by PPHM management over the next few months if the BOD vote delays PPHM operational progress enough to require raising more funds to support operations?
Fifth, who would most benefit if PPHM is compelled to issue ATM shares at a depressed pps to support PPHM operations?
Regarding your point, I would also like to hear ideas that might explain the shift to more shorting, post the shareholder on record cutoff date.
Best wishes and IMO.
KT
Bidrite, you wrote: "a BOD who was just found guilty of defrauding shareholders," amongst your listed negative call outs about the current BODs. We are aware of the July 27, 2017 Settlement Agreement that was brought before the Delaware judge that pared back nonemployee BOD compensation to 75% of a Pharma BOD peer group comparison, but I have not seen anything about "found guilty of defrauding" as you described. Can you clarify if you really meant to assert that entering into a settlement agreement constitutes being found guilty of defrauding shareholders?
Regardless, I am still looking to Ronin to explain their intentions for PPHM proprietary technology beyond their earlier letter to shareholders suggesting Ronin views the PPHM proprietary tech is without value. PPHM doesn't seem to need a new BOD just to support Avid development of new mabufacturing customers so that the new Avid production capacity coming on line gets fully subscribed.
The Proxy vote for the BOD in October still strikes me as simplifying to shareholders either choosing to support a management team that has a history of issuing ATM shares for forwarding the PPHM tech development while progressing Avid vs. a hedge fund proposed BOD slate that might stop the ATMs (I presume) and put PPHM tech development on the back burner while applying PPHM resources to optimize Avid value development. This contrast between the two BOD groups is significant for investors.
I hope all have a good Labor Day holiday and pray for those in Texas, LA and the western states suffering the effects of floods and fires.
Best wishes and IMO.
KT
IFU, posts about the percentage of naked short selling of PPHM stock indicates some oarty is artificially depressing the PPHM pps. Are the naked shorts being done in accordance with SEC regulations? No, the reference is far from meaningless. It tells a story that ought to reveal the hand of the shorting parties involved when it is timely.
Best wishes and IMO.
KT
Exwannabe, a few of us are thinking in the same way, that is, let's look at the available documents to clean up fuzzy memories or carry over of someone's early speculation that was not grounded on substance.
You wrote:
What the Court docs said was ABBV was interested in PPHM's PS tech. When they came in to look at the data, the data turned bad.
Have you read the Court documents? Can you give a link to share with the board?
Best wishes and IMO,
KT
Corporal, can you or anyone provide a link to the PPHM vs. CSM Court record transcripts so those on this Board can read for themselves the basis for there having been a Pharma deal in the works for PPHM tech before the dose switching was revealed? I recall some saying there was a deal in the works that was soon to be announced (the reason for the pps run up) but I did not see the supportive documentation. It seems timely for that documentation to see the light of day if it is not legally bound for staying confidential.
TIA
Best wishes and IMO.
KT
Refer to:
"Most of you know that Peregrine found a data discrepancy, announced on Black Monday, 9/24/12, in their Second-line NSCLC Phase II Bavi trial which later turned out to be sabotage. As brought out in court filings, the contractor’s (CSM) project manager, Janet Bleecker, admitted to intentionally switching some drug vials. Court filings also showed that AbbVie was about to sign a deal with Peregrine for $2B but the discrepancies made them back out. Court filings also mention a second trial involved. We have always thought that their first–line trial was also sabotaged because the control group lived twice as long as it did in any other NSCLC trial in history (making Bavi look like it wasn’t doing much). So these sabotaged trials show that Peregrine had something thought to be VERY valuable by some entity willing to break laws, to sabotage FDA trials, and to kill people (by not giving them the required drugs). The below are some thoughts from a long-time shareholder about how PPHM is different (much more valuable) than it was in September on 2012"
The above is full of errors and assumptions. Very, very far from fact. Is this a quote from Wolchok?
Geo, I agree with your point that Ronin enjoys their entry being covered by Avid value, making value of PPHM technology "gravy". I observe that it remains to be seen if Ronin is the only game in town, since I don't see Ronin being "in the game" until they affirm their intentions for structuring PPHM technology value so that long investors receive fair participation in the value they helped fund through creation over the last several years. As a long time long investor, I still want to see more than a hedge fund entry in conjunction with a slow down in Avid sales growth and a settlement agreement reining in BOD compensation as a basis for my proxy vote support. So far, all that Ronin is promising is:
1. that their BOD candidates would work for much less money (not specified) than PPHM's "overcompensated" BOD,
2. Their BOD candidates would direct available PPHM resources to optimize Avid value development while pausing PPHM tech development and
3. Their BOD candidates would seek to have PPHM's intellectual property assessed by experts to determine if and how much value resides there.
Regarding the three items:
1. The Delaware Court already addressed the settlement agreement that pegged the non management BOD compensation at 75% of a Pharma peer group etc., making the compensation issue do a turnabout to the Ronin BOD candidates being willing to work for some unknown smaller fraction of the Pharma peer group compensation. Curiously, the timing of the proposed settlement agreement announcement about aligns with when the Ronin team started accumulating shares (February/March 2017).
2. Avid customer sales were announced at the last investor conference call to be delayed due to reductions in Halozyme projected sales, while Avid was announced to be seeking new customers to subscribe its two new 1000 liter reactor production and other planned expansions were being placed on hold. That leaves the new BOD candidates with the same problem that the current BOD team is already addressing, which is Avid needs to find more customers for its unutilized capacity. Ronin has not explained how investing more money into Avid would make sense when Avid is already challenged to get the resources Avid has ready to go, subscribed. Curiously, the timing of deferral of about $10 million of Avid sales recognition from FY 2017 ends up balancing out a FY 2018 sales projection that sets back Avid growth progress and investor analyst valuation of $12 to $14 pps maybe a year until new Avid customer sales materialize. Current Avid sales about support maybe a $5 to $5.50 pps, but the average price paid by Ronin to establish their 8% position appears to be less. That leaves Ronin with their entry risk being covered by Avid valuation.
3. PPHM's intellectual property was the cause for the pps running up to a presplit $5.50+ or about $38 post split (not adjusting for the ATM) up to the point when the CSM mislabeling of trial dosing was announced and the pps dropped to well below a buck pre-split during pre-market trading. Ronin has left their rationale for PPHM tech development a mystery for PPHM long investors to accept, with their proposed BOD candidates pretty much leaving PPHM retail investors with the challenge of accepting the candidates on faith in an unknown entity.
So I still wait until October to see what emerges to justify my proxy vote.
Best wishes and IMO.
KT
ElSid, Until we see the pps breach the threshold ($5.50+) during the Ronin position acquisition, the large percent naked shorting suggests the share ownership is just being scrubbed for others to acquire shares from long retail investors. Somebody makes money exchanging shares in a recycle mode while those holding shares awaiting the proxy vote in October watch the gyrations. For now, it just looks like Ronin managed to acquire their combined holdings at a pps below the price when they first started position acquisition... unless there is a third party undisclosed who has been behind the shorting activity that positioned Ronin to take a loss if they exit their position. I am still watching for that third column to reveal its presence.
Regarding news some say here that they expect from the current BODs, it seems the BOD's best situation is to attempt taking the initiative to woo shareholder support when timing is too close to the proxy vote for Ronin to respond effectively. I see the next initiative to be Ronin's by clarifying for shareholders how they plan to manage PPHM technology development and value realization for the best benefit of long shareholders.
Best wishes and IMO.
KT
Stoneroad, Arctic photos for National Geographic? How cool is that! About the time you are done, we ought to know how the PPHM BOD proxy vote has been positioned. Be safe.
KT
James, I don't see anyone besides yourself posting updates on naked shorting for PPHM. I did a web search and came across the following url reference, which I believe you shared with us earlier.
Naked shorting
I have also copied in below a statement on the web page that describes how to spot naked shorting. PPHM has posted naked short selling exceeding 20% of volume for a long time.
Best wishes and IMO.
KT
6. If you are a NASDAQ or NYSE company, rule of thumb is If you see more than 20% of your overall volume initiated short on a daily basis as reported by REGSHO and displayed on our website as per REGSHO guidelines and delivered by FINRA you may be under attack. If you are looking to track naked short selling on OTC companies please visit www.otcshortreport.com
Naked Short Selling and The Destruction it Costs
Death to the Company
Naked short selling kills the value of companies and peoples investments by artificially pushing a company’s stock price down. For smaller companies looking to raise working capital, this causes them to have to raise funds at much lower prices which substantially increases the outstanding share count. This is called dilution.