investor
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.
Thurly,
I think you have a point to which I would add the following:
Let's put aside the cc and up or down a penny for a moment and review the bidding in 2nd line NSCLC.
Thanks to FTM excellent research review we know that doxy showed a 5.5% orr in the study that led to doxy being the SOC for 2nd line NSCLC. In the PPHM study of doxy + bavi it is reasonable to assume give or take a percentage point they should get at least that percentage for just the doxy.
Now in front line NSCLC we see Bavi having excellent effect as well as in MBC. Since we know chemo acts in an anti-mitotic MOA which is completely different from Bavi MOA (which is immuno upregulation and anti-angiogenesis), IMO we might imply that failure in chemo (leading to a 2nd line patient) would not in any way much bias Bavi MOA on that same patient.
If Bavi has "half" the effect in 2nd line NSCLC that it did in Front Line then it would triple to quadruple the 5.5% orr from the doxy SOC study. If Bavi has "one fourth" the effect it had in front line in 2nd line NSCLC then it will increase the ORR vs the SOC study by roughly 150%.
Of course, if Bavi had the same effect in 2nd line NSCLC (add on effect) that it did in 1st line then PPHM could exceed the SOC by 500-600%. Of course, again, we don't even want to think about that.
Garnick of course can get to the math much faster than I can. Put that together with his FDA conversational "listening" and with the fact that their has been no improvement in the SOC in this deadly unmet need for over a decade and QED Garnick decides to pursue 2nd line NSCLC as his lead point of attack.
All IMO of course but the math is the math.
Be of good cheer. We have a smart guy at PPHM.
RRdog
IMO your ruminations on the synergistic action of doxy + Bavi are much more interesting than your SLoan Kettering friend's opinion.
The whole world is waiting for double blind random data. You dont need him for that opinion.
IMO the better question than AA is whether the data is strong enough to trigger a market inflection that allows PPHM to finance at much reduced dilution and ultimately leads to a commercial alliance.
Regards
RRdog
FTM
Thanks for the excellent synopsis on the trial numbers.
RRdog
FTM,
I agree with you. PPHM might even do both. They could craft a deal that would be enlarged by an AA milestone.
Regards,
RRdog
Entdoc,
Before we move on to more exotic combos, let's stay focused on 2nd line NSCLC and there the SOC is doxy. Let's walk before we run. This trial is directly, head to head with SOC. A first approval would be lucrative for PPHM and open up a lot of path ways, maybe even some that you envision.
For the record, if you do a deep dive into the anti-mitotic MOA of taxene based chemo you will find a discussion of the ancillary apoptotic effect on the cancerous cells. You will understand more than I do about tubular cell structure in the cancerous cell.
Also, it is my opinion that the chemo will do more to potentiate the effect of Bavi than to lessen it by causing greater exposure of the cell surface target PS.
It's not all that important that we get so finely granular. What is of more interest to me is that PPHM has hired the most successful regulatory authority in the country and this is the path he envisions for the quickest route to FDA approval. In my opinion, Garnick has selected well for the following reasons:
1. The disease is a deadly unmet need.
1a.The market is large enough and clearly implies a path toward
expanded indications that are multiples the size of the
initial market.
2. Garnick has "listened" very closely to the FDA in discussion
and this is the point of attack those discussions have
revealed that both fits PPHM technology and is of high
interest to the FDA.
IMO this is a smarter approach than selecting by intellect
alone.
3. Pre-clinical and early phase clinical work is highly
supportive.
4. Doxy is very deep into it's patented lifetime and is less
likely to be highly defended by Sanofi Aventis.
5. Sanofi -if they were smart and alive- would make an excellent
competitive bidder for this product.
6. IMO there is much we can learn from Garnick, inclusive of
medical politics, that is of interest for not only PPHM but
other bio tech investments. Remember, Garnick is the
regulatory father of drugs that do "many billions" of dollars
of business and most of them are not very good drugs.
All of the above is just my opinion except for the discussion about apoptosis which is in the literature on the chemo.
Best Regards,
RRdog
Thank you FTM
Now apparently you and I and more importantly Dr. Garnick are all on the same page.
The real question is: Assuming Bavi achieved 3X the ORR of SOC, do you think PPHM could make a meaningful commercial arrangement?
Do you think they would lay back and try for AA before trying for a commercial agreement?
Regards,
RRdog
I have also given this some thought. The SOC for first line NSCLC is paclitaxel and Carboplatin. Doxy is perhaps a somewhat superior derivative of these Taxenes. Since you don't get to 2nd line without failing first line, why not use a different chemo combo and again Doxy is SOC in 2nd line so you get a direct comparison. Remember, ORR in 2nd line with Doxy is only 6-9% area.
The "real magic" in this is that all the chemos seem to act in the same way. They are anti-mitotic, i.e they inhibit rapid cancerous cell fission and in so doing are somewhat apoptotic. The fact that a patient fails chemo should in no way impact the MOA of Bavi which is to target PS on the cell surface and to upregulate immuno response and inhibit blood supply as opposed to the anti-mitotic MOA of chemo. In fact, even though you are a patient that has failed chemo that same chemo should have increased PS on the cell surface and make Bavi more effective.
THIS IS PRECISELY WHY THORPE HAS BEEN SO BRILLIANT IN UNDERSTANDING THE MOA. It makes the case to the FDA for an alternate MOA--a totally different approach and hopefully a synergistic one. This is so brilliant in fact that I am not just thinking about PPHM as an investment but really hoping for the success of this trial as AA for all the patients who really need it so they can get into it as quickly as possible..
IMO high probability that Bavi will far surpass the 6-9% hurdle and by that I mean by way more than the statistically signifigant 10%.
All in just my opinion.
Best Regards,
RRdog
General comments on a weekend:
Everyone invested in PPHM share some of Frustrated's bitterness at the length of time and the "dilution during that time" engendered by the PPHM mgmt and BOD approach.
On the other hand, I think PPHMtoolong's comment on the authors and "fathers of success" in the most recent papers is really very telling. Everyone wants to get on this scientific bandwagon. AACR is accepting 7 papers from one of the smallest biotech companies in the world, Institutional IST activity is high, Thorpe has raised his profile and bet his reputation in a globe spanning series of lectures. IMO the future of cancer treatment may well be associated with cell surface technology and if you look at it that way, IMO PPHM OWNS THE BEST PATENTED POSITION ON THE CELL SURFACE.
The disconnect between the potential value of the science and the market capitalization of PPHM is enormous. PPHM mgmt/BOD refuse to sell cheap and that well is how it should be. Let's use the simpler example of Cotara and brain cancer/ glio. In this deadly unmet need the SOC really consists of gross radiation from external source or cutting into the patient brain and trying to remove tumors by surgery without additional damage and without leaving tumor fragments to grow again. IMO the PPHM approach of radiation emanating internally from the tumor and using a catheterized insertion technique is infinitely better than SOC almost QED prima facie.
Since the treatment for the disease may ultimately be worth a couple of billion dollars (not to mention additional value from using similar technique in other hard tumors), since PPHM has performed well in Phase I and II testing, since the catheter technique was developed by the NIH and is therefore very PC, since PPHM already has orphan drug and fast track status in this disease, and since the disease is fatal---why shouldn't PPHM face down the FDA. Whatever time it takes in this round to get the right protocol/SPA for Phase III to ensure partnering is worth the argument. (Postscript, PPHM is aided in this argument by some of the new imaging techniques also developed in Thorpe's lab. Thorpe reminds me a little of Einstein who didn't win the Nobel for Relativity but rather for studies on Brownian Motion. Thorpe may one day win a Nobel not for cell surface work but rather for imaging techniques.)
However, what if this battle is a long and drawn out affair while the FDA looks at every possible issue from choosing which surgical centers are allowed to handle the Phase III to how the radioactive isotopes are manufactured, packaged and transported along with a hundred other side issues I can't even imagine???? What is plan B??? This is where I am most critical of PPHM mgmt and BOD. Outside of Garnick, what other lobbyists does PPHM employ? What other regional venues could Cotara be sold in outside of FDA jurisdiction? What types of early stage deals with milestones could be made?? What massive educational and PR campaign could PPHM launch to increase share price and lessen dilution?? What other "bridge funding" techniques are available to PPHM aside from ATM-- which is as gross an approach to funding as surgery is to brain cancer??? What experts can be brought in to address these questions at the BOD level or advisory board level?? IMO I relish the battle at the FDA because it is worth doing but, I am appalled at PPHM lack of plan B.
NSCLC data is also worth waiting for. It is possible that the data is strong enough to motivate partners because the Phase II testing (unlike Cotara) is an FDA gold standard approach, double blind and randomized test in direct head to head competition with existing SOC. Good results here would give partners confidence
to move into Phase III with a high probability of successfully "repeating the experiment" which is the hallmark of scientific methodology and thus getting FDA approval for an NDA. NSCLC is a large disease with a big market and could be the tip of the iceberg for Bavi and funding from this would be all PPHM needs.
Again, I applaud PPHM for not selling cheaply but, again I would urge mgmt to advance a plan B. If nothing else, it would improve negotiating positions. Bridge financing is not "brain surgery". If PPHM wants us to believe they are capable of the latter then surely they should be able to figure something out better than ATM for the former. (Leveraging free cash flow from Avid still comes to mind)
Lastly, and this is a relatively minor thing but I can't help voicing the thought. Steve King is talking again in front of an "investment" audience at Cowen this week. Why not take a tip from a great performer like "Judy Garland", who, at the end of her performances would sit on the apron of the stage, legs dangling and talk to her audience. Her fans loved it. When Steve is finished with the usual dry scientific presentation, why not roll up his sleeves, completely surprise all the staid investors at the presentation, walk into the audience and with some real "enthusiasm" tell them in "plain English" what he really likes about all this science and what the real stakes, real values, and real risks and rewards there are in investing in PPHM. If you're not "enthusiastic" Steve why did you spend ten years of your life pursuing this thing??
Best Regards,
RRdog
Honest,
You do yourself a disservice as well as others. IMO you are way to negative. Because something took ten years to get to this point, does not in any logical way mean that it will take another ten years. All you are doing is griping. Start thinking about how you can do something value added for yourself and others. Clearly you should either be selling out or adding more. Griping illogically is the boobie prize.
Best Regards and meant constsructively,
RRdog
Entdoc,
IMHO the key is partnering needs. The FDA does not historically stand in the way of phase III if all safety and efficacy requirements were met in phase I and II in a disease that is a deadly unmet need.
Since this can not be a randomized, placeboed trial which is the gold standard, PPHM must have very clearly delineated guidelines from the FDA and preferably an SPA to make the kind of partnering deal they want.
Let them take their time and get it right
Just my opinion
RRdog
The answer to the question is that seven abstracts from four top University research centers is a lot at the second most prestigious cancer conference and is very impressive.
"If a tree falls in the forest and no one hears it, is there a sound?" In PPHM's case the answer is no, however, the forest is different.
Regards,
RRdog
That's about in line with my back of the envelope guess. It is not aggregious versus the dirty world we live in but certainly not "fair" based on visual performance to date.
Mgmt and BOD still have to make the IP good. PPHM in perfect position now for news.
Mgmt and BOD are still in "arrogant" mode as if they know what their end game will be. My criticism is that sometimes the end game takes longer than planned and I still don't see an antidilutive plan B to "bridge".
Best Regards,
RRdog
GTXI down 30-40% on halt of prostate drug clinical. Blood Clots.
Safety matters.
RRdog
My swag is that SK has between 6-800K options at various strikes.
That is not a large option position for a 10 year Pres and is roughly commensurate with his business acumen and promotional acumen which is low. He appears to be stronger in clinical knowlege and scientific liason.
For all your complaining I am surprised that you do not have an accurate count about that which you complain.
I hope he does very well on his option position and exercises every higher strike price and I think you really ought to concern yourself with the science IMO and stop worrying about this issue. This issue is inconsequential compared to the scientific risk and upside IMO.
Best Regards,
RRdog
Jake,
Since you are the chief complainer in this area:
Can you accurately state how many options SK has cumulative and at what price they are struck?????
RRdog
Free the Mice,
IMO your post on ORR potential dating is very alert.(6 cycles X 21 days from the final enrollment date)
I might add that theoretically it is possible to release ORR without "unblinding". If the SOC is 6% and PPHM sees gross ORR numbers way way in excess of SOC they could release them in a preliminary fashion if they chose. Those percentages would logically only get better after unblinding and segregating to the Bavi arm of the trial.
They did something similar in front line NSCLC when they wanted to get results out before a particular date even though they were not 100% complete.
Best Regards,
RRdog
Purple D,
That is the $64,000 question. IMO FWIW I think Roche is really plugged into PPHM progress by Garnick (pedigree) and other researchers and mgmt that have come over from Roche/Genentech.
IMO, if Roche looked at this pipeline strategically, they might want the whole company. Mgmt won't sell it cheaply (poison pill).
Roche might start by picking up pieces like viral for further testing.
The only reason I speculate on this is that this kind of a deal serves both parties needs at this moment in time.
Just IMO
RRdog
Geo,
Again, the company strong enough, in the Hepc arena, that still needs another ingredient for their cocktail, wants to compete-- particularly internationally, and has plenty of money is Roche.
IMO PPHM has plenty of data to supply Roche re the delayed action re Bavi vs INF to interest them. The possibility of replacing INF is a big carrot.
Even a modest upfront payment of 20-50mm plus milestones would be very helpful to PPHM re cash burn and dilution over the next 6 months. This dollar amount and the short term testing (remember viral is much faster than cancer) would not be much burden to Roche. Also, remember that Roche recently acquired Anadysis for approx 300mm as an ante into this game. That acquisition was in full knowlege of all VRUS activity in this field as Roche was a Pharmasset partner. In light of todays news, this gets more interesting.
All IMO
RRdog
Mojo,
A couple of thoughts which you can comment on if you wish.
IMO it is difficult to tell when PPHM will unblind data and also when they will announce results. They can always hold results while they "double check" or analyse or whatever. The reason I suggest this is that PPHM is not concerned at all with its retail shareholder base. The only thing that concerns PPHM IMO will be the preference of any large potential buyer as to when and how the data is released and what type of deal that buyer wants to make. In the long run that should help shareholders.
The snag at GILD in difficult to treat patients in Hepc seems to put PPHM back in business "virally" speaking. I have long posited that the Roche acquisition of Anadysis for efficacy versus viral was a perfect "lock" for the bavi viral "key" which may help up regulate the immune system and prevent recurrence. In other words bavi in combo. If you have any thoughts in this area I would appreciate hearing them.
TIA
RRdog
JR.
I don't see any reason PPHM would need a formal offering. It is clear that they are selling ATM stock when they can motivate demand and that they are seeding appropriate institutions.
The most surprising thing in a long time was BR going to a 13D position. If motivated by clinical results they could triple their size easily without triggering any pills.
Just IMO
RRdog
Thanks Cheynew,
You never know.
RRdog
For those of us who are apologists for Mgmt and BOD re ATM questions I would like to have asked at tomorrows presentation:
Two key issues in PPHM are timing and ATM dilution.
One way to avoid ATM dilution is by asset sale (IP sale):
1. Can you give me some "color" on Hepc partnering or viral partnering in general? Is it dead until PPHM runs more clinicals to further prove value or are discussions alive? How much time do you need till you can tell whether anything will be fruitful?
2. Can you give me some "color" on Cotara? How does the FDA seem disposed toward the SPA discussion?? How do the potential partners sound? What is best guestimate on timing till a resolution???
3. Can you give me some "color" on "imaging" partnerships? The smartest guy in your room, Dr Thorpe, thinks this is the finest three dimensional tumor imaging he has ever seen. Is this a dead issue until PPHM runs further clinicals or can something be done here and if so approximate timing to resolution???
4. Does PPHM have any other financial options other than ATM and if not why not???
a. Wouldn't it be better to leverage Avid in a segregated fashion than to keep selling ATM??
b. Wouldn't it be better to leverage the whole company for 50mm than to keep selling ATM. 50mm in leverage at 10% would only require 5mm ATM shares / year to service the debt as opposed to 40mm ATM shares as equity.
c. Aren't there any potential partial equity sales that could be made instead of ATM such as a regional partner albeit for less than top dollar???
d. Aren't there any cost cutting measures that could be implemented to reduce burn? Couldn't top exec salaries be halved and deferred until this issue is solved?? Couldn't board compensation be completely deferred until this dilution issue is completely resolved?
e. Couldn't the sales force at Avid be beefed up to increase cash flow and cut dilution from the ATM???
f. Couldn't the current CFO be replaced by a heavyweight with biotech financing track record??
g. Couldn't the BOD be beefed up (with no loss of control) with heavyweight Biotech deal makers, or IBs, or ex execs from BP??? as a signal to the street that PPHM means business. ?? wouldn't this signal be bullish in the extreme so that even if ATM was used it would be much less dilutive???
You get the message.
Best Regards,
RRdog
Geo,
You and CP seem to be right on the point I have been making for a long time. It is mathematically better to sell a piece of IP or a regional piece of IP -even if not on best terms-- or to leverage Avid, and kill dilution then to keep selling and diluting the whole mother ship at highly undesirable levels.
I think CP makes some fine points about increased activity in defending mgmt agains Until2000 comments. I think that even CP will have to admit that increased activity is a far cry from "effective" activity. The way you measure all of this stuff is with the "price per share of your equity over time" and god knows we are measuring over a long period of time.
Mgmt and BOD have been strikingly ineffective in dealing with the real world management issues, real world BOD issues, IB issues and need to put as much effort into those areas as are being put into the science. In fact, better financing would lead to much improved scientific program in depth and breadth and speed.
If mgmt were so sure they were doing the right thing they would not be adverse to a frank discussion in open forum with their shareholders/owners. Some "color" on where we are with all the different pieces and "approximate time line" would be greatly appreciated. The moral cowardice is what is telling.
I offer this as constructive criticism as it weighs on an otherwise interesting scientific effort.
Best Regards,
RRdog
Enjoying all the bullishness as I am a major bull and enjoying tales of 11 billion dollar deal rejection by mgmt and WH narrative.
Now-- back on earth:
I am seriously disturbed by mgmt failure to properly finance the company and therefore incur much more dilution than necessary or warranted.
I am likewise disturbed by mgmt failure to properly promote the company as dilution would be trivial at $5/ share compared to $1/share.
I am disturbed by mgmt failure to reach any meaningful commercial deal in more than a decade that might alleviate dilution.
I am disturbed by mgmt ethical cowardice to stand before the shareholder/ owners and have an honest discussion on the many issues that concern us all.
Best Regards and best hope for a better future.
RRdog
Just for the record--it's only Wednesday and this appears to be the highest weekly volume in PPHM going back to 2000.
PPHM seems to have a new address on the corner of "Give me all you got" and "Where's the beef??"
Best Regards,
RRdog
"Res ipsa loquitor"--an expression as old as the latin--"the thing speaks for itself".
The action is two way in PPHM and continues on down days. Not only does the offer side refresh but now the bid size refreshes even larger.
I have no inside look here but, I thought the key word in the Roth announcement was that they would "host" a meeting in Boston.
"Host" is the kind of word you use when you are giving a party not having a meeting. So my take was that PPHM was presenting privately to a number of institutions that were east coast based.
The only seller that makes sense at this level is the atm (nobody is crazy enough to naked short a $1 biotech with this story into this kind of buying). The only buyers at this size (after long PPHM underperforming history) would be informed institutions. "The thing speaks for itself".
It is always difficult to posit any PPHM scenario that makes classical investment sense but,IMO I would guess PPHM moves cash up to or above 20mm through ATM, there is some news or multiple releases, the price moves up, and then a more formal financing. Institutions average price will be $2-3/share.
IMO still need a minimum of $1.10 very short term to confirm even the slightest uptrend. Longer term these numbers are meaningless next to the scientific achievement if proven.
Would not pay too much attention to couple of penny moves. Instead would focus on the larger picture.
Just a guess
RRdog
Not sure why they would need it. It looked to me like they funded ATM during the high volume days 1-2 weeks ago enough to cover the quarter.
My point is that unless they have a deal in hand, why continue in the current vein??? Why not try less dilutive methods of financing???
Regards,
RRdog
What are the implications of a 2% world?(i.e. the US ten year bond yields 1.8%):
1. PPHM's Avid division ought to be able to sell debt at 10% vs
free cash flow
2. Avid is throwing off at least 8mm/ year in free cash flow and
heading towards 10mm
3. Avid could easily support 50-80mm in debt even if the
assets of Avid had to be used for collateral (without
leveraging PPHM as a whole or encumbering clinical IP)
4. Avid alone is worth approx the current market value of PPHM
5. More attention should be payed to the free cash flow growth
of Avid.
6. PPHM, contrary to popular opinion is not financially
constrained.
7. PPHM mgmt has a viable limited liability option to ATM
8. PPHM has little downside versus the value of sum of the parts
9. PPHM is currently valued at approx 90mm
10 PPHM has traded as high as 3-400mm market value
11 PPHM is currently much stronger at Avid, much stronger in
clinical and regulatory mgmt, much stronger in the science
re MOA, much further along in clinicals than when the stock
traded at much higher valuation.
12 PPHM still lacks a market catalytic deal, but, that may
change.
13 Negativity in PPHM is near all time highs as confirmed by
market value.
14 If PPHM BOD and mgmt continue serious dilution at levels close
to the value of Avid and 10-20% of analytic future discounted
value adjusted for risk, without reduction of expenses and
without a full exploration of alternate means of financing--
they are approaching "dereliction of duty" under the Delaware
laws of incorporation.
IMO I would continue to accumulate the stock.
Regards,
RRdog
Mojo
It is strategically smart to keep up corporate financial strength while negotiating as demonstrated by INHX and I also agree completely that a partnership is needed. For PPHM to even think of going it alone in the present biotech universe is close to absurd.
That having been said, there are alternatives to stale, brain dead thinking by mgmt and BOD. As far as the ATM goes, it is really PPHM's problem not Roth's. IMO PPHM management has their head in the sand. There are a number of apologists on this board that suggest silly things like PPHM is preserving the value of the IP while diluting at 10% of the present discounted value risk adjusted. If the ATM were the only way of financing that would be one thing. However, there are many alternatives. Consider the fact that Avid is throwing off at least 8mm/ year in free cash flow. PPHM could leverage that cash flow for 50-80mm and, if necessary, collateralize with the assets of Avid. They would not have to encumber IP or the mother ship. The cash flow at Avid is growing so PPHM is well able to service the debt. Wouldn't it be better to leverage a segregated asset than to sell large percentages of the whole company?? Wouldn't it be better to make an earlier stage deal or a regional deal for less than top dollar on part of the IP than to dilute 100% of the company?? Of course it would. PPHM mgmt is stubbornly clinging to a poor strategy. Worse, it is a self defeating strategy as far as market value for additional financing.
In this area we are in agreement.
Let's hope that if any meeting with Roth is about more than just sponsorship or client introduction, it has some more creative thinking and approach to financing. The only justification for another short term financial fix would be if mgmt had a deal in hand.
This is just a suggestion (one of many alternatives) that I would like the BOD to consider and IMO only, so, unnecessary for all the negs to state how mgmt can never change. I am well aware of the track record.
Regards,
RRdog
Frustrated,
Your reactions are way to negative and cynical and frustrated. If you really believed all of your own bile you would be long out of this stock.
There is nothing "secret" about this meeting and no need for "neighbors" to go all the way to Boston for a meet. All I'm suggesting is maybe Roth has some clients in Boston they want PPHM to meet. What's the big deal. Relax and enjoy your weekend and try to look at more than one side of the question.
Right. I hope we are good about this. If Pantigis wants to make PPHM his number one pick with a ten dollar target, I'm sure that's ok with even you. Right.
Regards,
RRdog
I rather like this meeting "hosted" by Roth Capital with PPHM in Boston on Feb 3. Since Roth is located in Newport Beach California all they have to do is walk up the beach to meet with PPHM. Ergo IMO the Boston setting has some importance. There is an awful lot of biotech investment money management in Boston as well as biotech firms and BP in Boston.
Best Regards,
RRdog
This is the first comment I have read of yours that is not "factually right and substantially wrong." Here you are actually speculating on a future event probability. IMO would not mind if Roth did a financing above a number like 4-5/ share.
Roth recently advised on an 11mm financing for Talon and on an 8.4mm Euro financing (sole placement agent) for PHARM. Roth led other financings for up to 24mm in latter half of 2011.
Roth is also co sponsor of the upcoming Acquire or be Acquired conference.
Best Regards,
RRdog
I would view Pantginis comments on FDA intent very sceptically. If the registrational path is in fact "clearly defined" PPHM should receive an "SPA" for Cotara and then would have to partner, and then shareholders could evaluate the value of that partnership, frontmoney, and overall uptick to credibility.
Nevertheless, his statement is what it is and we will see in time.
Just IMO
RRdog
Below is the summary of Roth report. More on this later.
Regards,
RRdog
MORNING SUMMARY | EQUITY RESEARCH | January 23, 2012
Peregrine Pharmaceuticals, Inc.
(NASDAQ: PPHM)
Buy | Target: $10.00
Joseph Pantginis, Ph.D.
(646) 358-1907
Price: $0.93
Mkt. Cap.(mil): $80.7
4
3
2
2
2
1
0
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
8.0
6.67
5.33
4.0
2.67
1.33
0.0
Price
PPHM One-Year Price and Volume History
EPS Prev. P/E
2011A (0.56) NM
2012E (0.48) (0.53) NM
2013E (0.50) (0.56) NM
PPHM: Top 2012 Biotech Pick - "Bavi" Ready For Prime Time; Key Data Soon
We reiterate Peregrine as a top pick for 2012, with upcoming study results anticipated to
generate excitement in the coming year: randomized Phase II data for bavituximab in secondline
NSCLC, followed by the survival results of a randomized Phase II study in NSCLC
(front-line), several ISTs and FDA guidance on the registration path for Cotara in recurrent
glioblastoma (GBM).
Event - Reiterate Top 2012 Pick
We are reiterating Peregrine as a top biotech pick for 2012 (Analyst - Pantginis). We base
our expectation of success on the lead candidate bavituximab with 1) recent positive results
from a randomized Phase II study in front line NSCLC as well as on positive data from several
single arm trials in metastatic breast cancer (mBC) and NSCLC which showed meaningful
improvement in clinical responses and survival, in our belief and 2) a string of meaningful
catalysts in 2012.
Impact
We believe the current valuation does not reflect the clinical data in hand surrounding the
bavituximab opportunity. Below we present our case for this disconnect with sensitivity analysis
around our valuation method. We expect the recent positive randomized Phase II bavi data
in front-line NSCLC to be followed up with multiple additional data catalysts (see expanded
discussion below). Peregrine has also indicated that partnering interest has increased as
several were waiting for the randomized data to start reading out. We expect final ORR
data from the front line randomized Phase II NSCLC study, along with PFS and OS later in
the year. The second randomized study in second line NSCLC is projected to read out in
1H12 (ORR data) and PFS and OS data when reached. Data from the randomized study in
pancreatic cancer is also expected in 2012 as well as preliminary results from several ISTs.
The registrational path for Cotara in recurrent glioblastoma is currently defined with a recent
written response from the FDA which the company views as positive.
Action
We reiterate our Buy rating and $10 price target and Peregrine represents a top biotech pick.
We believe that Peregrine is attractive for near term catalyst investors as well as a long term
attractive play. Our positive opinion is based on 1) broad spectrum therapeutic potential with
bavituximab, 2) positive clinical oncology results in hand with multiple clinical data catalysts
ahead, 3) broad externally funded collaborations and 4) a contract manufacturing subsidiary
(Avid) which helps to offset the company's cash burn.
Page 4 of 15
MORNING SUMMARY | EQUITY RESEARCH | January 23, 2012
Company Comments
AsiaInfo Linkage, Inc.
(NASDAQ: ASIA)
Neutral | Target: $12.00
Kun Tao, CFA
(949) 720-7149
Price: $9.92
Mkt. Cap.(mil): $713.7
30
25
20
15
10
5
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
5.0
4.0
3.0
2.0
1.0
0.0
Price
ASIA One-Year Price and Volume History
EPS P/E
2010A 1.46 6.8x
2011E 1.52 6.5x
2012E 1.33 7.5x
ASIA: Receives Going Private Proposal from CITIC Capital
On Jan 20, ASIA announced that it received a non-binding Going Private proposal from CITIC
Capital China Partners II, L.P. to acquire all of its outstanding shares in cash at premium to its
current price. A special committee of BoD was formed to consider the proposal.
While pricing was not disclosed, we note that recent deals have typically been priced at a
15-25% premium over the prior day’s close. Since this is not an MBO, we speculate that the
pricing could be at the high end of this range. We acknowledge that pricing in these transactions
has varied widely. Given management owns approx. 31% of the total outstanding shares, the
going private process will be relatively easy if management agrees to sell.
CITIC Capital is high profile private equity firm in China with over $4 billion USD in assets and
has extensive relationship base and deep understanding of the SOE sector and engages in
buyouts and strategic investments in leading Chinese companies.
We await details of the proposal to be announced given that the press release contained limited
information and then have a closer look at the proposal and its impact on shares of ASIA.
Intraday Price: $ 11.90 at 10:22am ET 1/20/2012
Page 5 of 15
MORNING SUMMARY | EQUITY RESEARCH | January 23, 2012
Bally Technologies, Inc.
(NYSE: BYI)
Buy | Target: $55.00
Todd Eilers
(949) 720-5781
Price: $41.97
Mkt. Cap.(mil): $1,819.2
50
45
40
35
30
25
20
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
7.0
5.83
4.67
3.5
2.33
1.17
0.0
Price
BYI One-Year Price and Volume History
EPS P/E
2011A 1.85 22.7x
2012E 2.47 17.0x
2013E 3.17 13.2x
Bally Technologies’ (BYI) Group Lunch
ROTH Capital Partners and Todd Eilers, Senior Research Analyst - Gaming invite you to
join us for a private lunch with Bally Technologies’ (ticker: BYI) CEO, Richard Haddrill.
Bally Technologies is a leading gaming equipment and technology supplier to the
global gaming industry. The lunch will include a brief overview of Bally’s business and
important growth opportunities and will include an interactive Q&A session over lunch.
DETAILS
Date: Wednesday, January 25, 2012
Time: 11:45 am - 1:30 pm GMT
Format: Lunch Presentation with Q&A
Presenter: Richard Haddrill, CEO of Bally Technologies (BYI)
Location: Mandarin Oriental Hyde Park
Bar Boulud Restaurant
66 Knightsbridge, London SW1X 7LA
+44 (0)20 7201 3899
This event is for institutional clients of ROTH and is by invitation only. Please RSVP via
email to conference@roth.com or call your ROTH sales representative at +(1) 949 720
5700.
Page 6 of 15
MORNING SUMMARY | EQUITY RESEARCH | January 23, 2012
Depomed Inc.
(NASDAQ: DEPO)
Buy | Target: $8.00
Scott R. Henry, CFA
(949) 720-7123
Price: $6.16
Mkt. Cap.(mil): $341.3
12
10
8
6
4
2
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
14.0
11.2
8.4
5.6
2.8
0.0
Price
DEPO One-Year Price and Volume History
EPS P/E
2010A 0.07 88.0x
2011E 1.23 5.0x
2012E (0.55) NM
DEPO: Gralise Tracker - Week ending 1/13/2012 (Positive Week)
This report is a weekly update tracking the launch of Gralise (from Depomed) to treat pain due
to post herpetic neuralgia (shingles). We view this week's Gralise data as positive given that
prescriptions again reached a new high (up about 150 over the pre-holiday weeks).
• Weekly Gralise Tracker. Gralise (gabapentin) works similar to other gabapentin-based
products in that it relieves pain from shingles. The differentiating factors includes 1X/day
dosing and potentially improved side effects (lower dizziness and lower somnolence).
• This week's data. New and total prescriptions for Gralise were 809 and 932 (versus 636
and 712 last week - New Year's holiday week). At ~$150/script, this translates into a ~$7.3
million annualized run rate. Total share of gabapentin-like products increased to 0.11% from
0.08% the prior week. The product launched in October 2011. We view this week's Gralise
data as positive given that prescriptions again reached a new high (up about 150 over the
pre-holiday weeks).
• Our expectations. We expect a slow, steady launch for this product given the gradual
acceptance of new products by managed care. We target 2011-12 Gralise revenues of
~$900K and $21 million. To reach our 2011 forecast, we target weekly prescriptions to
approach 1,500 by the end of March 2012. This requires average gains of ~60 scripts per
week.
• What to watch for? It's all about the prescriptions and the early trajectory of the Gralise
ramp. We should start to get a clearer picture in the coming months. Unrelated, a Glumetza
(diabetes drug on market) patent settlement could also be a positive catalyst for the shares.
• Maintain Buy rating. We maintain our Buy rating and $8/share price target on DEPO shares.
This includes ~$2.25/share related to Gralise although it is clearly the near-term catalyst in
either direction. We upped revenue targets in this note to reflect strong December monthly
prescription data for Glumetza, but offset this increase with higher SG&A targets.
Premarket 1/23/2012
Page 7 of 15
MORNING SUMMARY | EQUITY RESEARCH | January 23, 2012
Heckmann Corporation
(NYSE: HEK)
Buy | Target: $7.00
Brian W. Post, CFA
(949) 720-7178
Price: $5.72
Mkt. Cap.(mil): $713.4
887666544
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
12.0
10.5
9.0
7.5
6.0
4.5
3.0
1.5
0.0
Price
HEK One-Year Price and Volume History
EPS P/E
2010A 0.02 NM
2011E 0.05 NM
2012E 0.17 33.6x
HEK: Misconception Creates Opportunity
We believe there is misconception that HEK's business model is very sensitive to the overall
level of new drilling and water use in fracking. We are comfortable with HEK's market potential
and believe informed investors should take advantage of price weakness to capitalize on the
disconnect.
Selloff overdone. Lingering concerns regarding earthquakes, a significant decline in gas
prices and public comments made by environmental officials regarding the outlook for the
fracking industry have unduly weighed on HEK shares, in our opinion. We argue some investors
haven't fully grasped the difference between "produced" water and "flowback/fracking" water
and this misconception had led them to question the viability of HEK's growth model.
New drilling doesn't dictate HEK's fortune. HEK is not dependent on new drilling or the
continued use of large volumes of when fracking new wells, in our view. We contend the
company's business model depends on the overall size of the shale gas ecosystem. We point
to the mix of revenue from HEK's core Haynesville market as an example; an overwhelming
majority of the company's revenue in the region comes from wells that have already been placed
in service and not from new wells added in the past year.
Consolidation remains the story. Shale gas is now a permanent part of our country's energy
infrastructure, in our view. As the absolute number of wells expands, we expect there will be
an increasing need for water handling services conducted on a large scale. We anticipate HEK
to continue its roll-up of business industry in 2012 and a new acquisition would be a catalyst
for shares. We encourage investors to take advantage of recent weakness to capitalize on any
future acquisition(s).
Intraday price: $5.59 at 2:51 PM ET 1/20/2012
Page 8 of 15
MORNING SUMMARY | EQUITY RESEARCH | January 23, 2012
International Game Technology
(NYSE: IGT)
Buy | Target: $21.00
Todd Eilers
(949) 720-5781
Price: $16.72
Mkt. Cap.(mil): $4,975.9
22
20
18
16
14
12
10
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
16.0
13.33
10.67
8.0
5.33
2.67
0.0
Price
IGT One-Year Price and Volume History
EPS P/E
2011A 0.93 18.0x
2012E 1.03 16.2x
2013E 1.23 13.6x
IGT: 1Q12 Earnings Preview
IGT is scheduled to release its 1Q FY12 results before the market opens on Tuesday with a
conf call at 5am PT (Dial-in 1-800-369-3368). Our estimates call for revenue of $489M and
EPS of 21c (Street at 22c).
• Thoughts on the qtr. After posting strong 4Q11 numbers, we look for 1Q12 results to be
a bit soft driven by light game sales. Confirming this view we note participants in the most
recent ROTH-FANTINI slot survey purchased only ~33% of their games from IGT during the
qtr, which is -1% pt below its trailing avg. We also look for new opening shipments to be
a little light in the qtr as IGT recorded the majority of the two Kansas casino shipments in
4Q11. Furthermore, while some competitors will record Revel Casino shipments in the qtr,
IGT will not recognize Revel units until the property opens as it is also providing the system
for the property.
• Gaming Ops should improve. While game sales are expected to be soft, we look for the
company's gaming ops segment to be relatively healthy with a pickup in regional gaming
revenue (+4% y/y) and strong initial Resorts World NY performance where the company now
has 1,800 games installed earning roughly $20/day (6.375% of net win). We note ROTHFANTINI
survey participants also added +2,000 (net) games in the qtr (~200 ex Resorts
World NY), while IGT's share of Top 3 games expanded from 48% to 56% in the qtr with
strong contributions from the company's WOF franchise and its new Ghostbuster game.
• Key 1Q assumptions. For the qtr, our product sales estimate assumes 9,500 total games
shipped (5.5k domestic) w/ an ASP of $15,000 ($14.3k domestic). Our Gaming Ops estimate
assumes an avg install base of 54,700 games (40.7k domestic) w/ a domestic revenue yield
of $59/day (+1% y/y) and international yield of $34.50/day. Finally, we assume a GM of 56.4%
and an operating margin of 24.4% to arrive at our 21c EPS estimate.
• Maintain Buy rating & $21 PT. Despite our expectations for a relatively light qtr, we remain
confident in our positive thesis on the stock and we look for IGT's quarterly results to gain
momentum throughout FY12. As such, we retain our BUY rating and $21 PT.
Page 9 of 15
MORNING SUMMARY | EQUITY RESEARCH | January 23, 2012
Western Alliance Bancorporation
(NYSE: WAL)
Buy | Target: $9.00
Edward Timmons
(949) 720-7153
Price: $7.49
Mkt. Cap.(mil): $616.7
10
9876543
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
3.0
2.57
2.14
1.71
1.29
0.86
0.43
0.0
Price
WAL One-Year Price and Volume History
EPS Prev. P/E
2011A 0.19¯ 0.22 39.4x
2012E 0.57 13.1x
2013E 0.80 9.4x
WAL: Another Strong Quarter; Reiterating Buy Rating and $9 Target
WAL remains a Focus Pick and one of our favorite names given the continued top-line growth
and credit recovery. In our view, the company is poised to post meaningful earnings growth
over the next two years, which is not being fully reflected in the current valuation.
The company reported 4Q11 EPS of $0.07, two cents below the consensus estimate. The miss
was driven largely by higher than expected credit costs, including OREO valuation adjustments.
Core trends however, continue to impress, with a 6.5% Q/Q increase in spread income and a
10% increase in pre-credit income, excluding OREO-related charges.
Net interest margin expansion of 22 basis points was driven by impressive 5.6% linked quarter
loan growth. While the increase exceeded our estimate of 1.8%, much of the growth came
at year-end from a pull-forward of credits. We expect 1Q loan growth to return to a range of
2%-3%. The company also deployed excess cash into securities, which added another 7 basis
points to the NIM. Lower deposit costs helped the NIM by another 7 bps, but depressed growth
somewhat.
Credit quality continued to show improvement, as both classified and non-accruing loans fell
Q/Q. OREO balances remained mostly flat despite $20 million in new additions. We continue
to think lower valuation adjustments combined with slowing inflow will result in material lower
OREO costs in 2012 and 2013, removing what has been a meaningful drag on the bottom-line.
A higher than expected loan loss provision was a combination of the strong loan growth, and
continued write-downs of Nevada credits. We are modeling a decline in the provision through
2013 as losses come down and the company right-sizes its allowance.
We are not changing our annual EPS estimates, expecting $0.57 in 2012 and $0.80 in 2013,
coming off $0.19 in 2011. In our view, the impressive earnings growth will be the result of
continued outperformance on the top-line, as well as a diminished drag on earnings as credit
costs subside. Longer-term, we think the company’s improved competitive position as one of
the few remaining local alternatives serving the middle market should support above average
growth and profitability as the macro environment improves. We are reiterating our Buy rating
and $9 target price on the shares. While our target price is based on our DCF, it equates to just
1.35x our projected YE2012 TBV value and 11.3x our 2013 EPS estimate.
Intraday Price of $7.95 as of 2:20 p.m. EST 1/20/2012
Page 10 of 15
MORNING SUMMARY | EQUITY RESEARCH | January 23, 2012
YM BioSciences Inc.
(AMEX: YMI)
Buy | Target: $6.00
Joseph Pantginis, Ph.D.
(646) 358-1907
Price: C$1.69
Mkt. Cap.(mil): C$197.2
444322210
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Price
YMI One-Year Price and Volume History
EPS P/E
2011A (0.32) NM
2012E (0.33) NM
2013E (0.35) NM
YMI: Top 2012 Biotech Pick; See Partner and Breakout Year for CYT387
We are highlighting our top pick for 2012. YM delivered compelling data at ASH in December
2011, in our belief, showing differentiated efficacy data, especially with regard to positive
anemia responses. We believe that YM is poised to enter a major partnership in 1H12 ahead
of the start of pivotal studies in mid-2012.
Event - Top 2012 Biotech pick
With differentiated efficacy data for CYT387 in hand and rapid progress in MF expected in 2012,
we are reiterating YM as a top biotech pick for 2012 (Analyst - Pantginis). With the expected
start of the first Phase III in mid-2012, we believe the most likely scenario for YM for the first
half of the year is the delivery of a major partnership to further drive the clinical and regulatory
process.
Impact
We believe that the positive data at ASH showing differentiated efficacy (anemia) and a
favorable safety profile, has not yet been priced into YM's valuation. The reason for recent
pressure on the stock, in our opinion, is the perception of a financing overhang and with
investors assigning a discount to '387 as an "early" candidate, ~2 years behind Incyte's (INCY
- Not Rated) Jakafi. We highlight that the anemia response represents a key differentiating
factor, in our view, for CYT387 compared to the currently approved Jakafi. Therefore, we believe
that the '387 data are attractive to a major partner with favorable terms as the program enters
pivotal stage in mid-2012. Recall that the INCY/NVS deal in 2009 delivered a $150 million
upfront payment to INCY, ~$1 billion in milestones and tiered double-digit royalties for ex-U.S.
rights to NVS. We believe YM is well positioned to deliver similar terms as it looks to launch
its pivotal program this year. Potential suitors are in play, in our view, and could include Sanofi,
Genzyme or Takeda.
Action
We reiterate our Buy rating and $6 price target. We believe YM is a compelling story especially
with the updated '387 data in hand and potential partnering catalysts in the future. While
CYT387 might not be the first to market, it may be the best to market and we recommend that
investors build positions ahead of upcoming catalysts.
Page 11 of 15
MORNING SUMMARY | EQUITY RESEARCH | January 23, 2012
Industry Comments
China Edge
Mark Tobin
(949) 720-5775
ROTH CHINA EDGE: January 13, 2012 to January 20, 2012
ROTH's China Research Coverage Universe (including 52 Chinese companies) gained
+5.7% in the past week as the S&P gained +2.0%, the Nasdaq gained +2.8%, and
the Russell 2000 gained +2.7%. The Shanghai Composite Index, Shenzhen Composite
Index, Shenzhen SME Composite Index and the Hong Kong Hang Seng Index (HSI)
gained +4.8%, +4.8%, +1.5% and +4.1%, respectively, in the past week. Year-to-date,
ROTH's China Research Coverage Universe has gained +16.9% and the following
indices have gained/lost: S&P +4.6%; Nasdaq +7.0%; Russell 2000 +5.9%; Shanghai
Composite+5.4%; Shenzhen Composite -0.6%;Shenzhen SME Composite -2.0%;and
HSI +9.1%.
ROTH's China Research Coverage Universe, currently trading at a median of 7.8x
ROTH 2011 EPS estimates, remains at a significant discount versus peers, i.e. 9.5x
for Shanghai Composite, and 10.2x for HSI. Among US-listed China stocks, financials
(+17.2%), consumer staples (+13.5%) and material (+10.9%) stocks outperformed
other sectors during the past week.
For a copy of the full report, including macro-economic tables and ROTH’s China
Research Coverage Universe tables, please access the pdf or contact your ROTH
Capital Partners institutional sales representative.
Page 12 of 15
MORNING SUMMARY | EQUITY RESEARCH | January 23, 2012
Conference
Roth Capital Research
(800) 678-9147
24th Annual ROTH Conference
Please join ROTH for its annual three-day conference (24th Annual ROTH Conference)
that brings together executives from over 400 growth companies, one of the largest of
its kind in the US. This event is designed to provide investors with a unique opportunity
to gain insight into small and mid-cap growth companies across a variety of sectors,
including Business Services, Cleantech, Consumer, Electronics, Financial Institutions,
Global Energy & Industrials, Gaming, Healthcare, Media, Retail and Software. We
combine company presentations, Q&A sessions, expert panels and management oneon-
one meetings to provide our institutional clients with extensive interaction with senior
management to gain in-depth insights into each company.
Page 13 of 15
MORNING SUMMARY | EQUITY RESEARCH | January 23, 2012
Conference
Roth Capital Research
(800) 678-9147
Group Lunch with Dr. Arthur B. Laffer
ROTH Capital Partners invites you to join us for a group lunch with Dr. Arthur B.
Laffer, former Chief Economic Advisor to the Reagan administration and founder of
Laffer Associates. Dr. Laffer will discuss macroeconomic trends, and how political and
demographic changes are affecting global financial markets. Specifically he will touch on
the US 2012 presidential elections, the Euro crisis as well investment ideas in the current
market environment. The luncheon will include a 45 minute presentation, followed by
an interactive Q&A session over lunch.
Date: Tuesday, January 24, 2012
Time: 12:00– 2:00 PM GMT
Presenter: Dr. Arthur B. Laffer
Format: Lunch presentation followed by Q&A.
Location: Dukes London
St. James’s Place
London SW1A1NY
Room: Marlborough Suite
RSVP: Please email rothecm@roth.com or contact your ROTH Salesperson at +1
949 720 5700.
Page 14 of 15
MORNING SUMMARY | EQUITY RESEARCH | January 23, 2012
Disclosures
ROTH and/or its employees, officers, directors and owners own options, rights or warrants to purchase shares of YM BioSciences Inc. and Heckmann
Corporation stock.
Within the last twelve months, ROTH has received compensation for investment banking services from Peregrine Pharmaceuticals, Inc., Callidus Software,
Inc. and Galena Biopharma, Inc..
ROTH makes a market in shares of Peregrine Pharmaceuticals, Inc., AsiaInfo Linkage, Inc., Western Alliance Bancorporation, Depomed Inc., Callidus Software,
Inc., Galena Biopharma, Inc. and Scientific Games and as such, buys and sells from customers on a principal basis.
A Research Analyst and/or a member of the Analyst's household own(s) equity options of Depomed Inc..
Shares of Peregrine Pharmaceuticals, Inc. and Galena Biopharma, Inc. may be subject to the Securities and Exchange Commission's Penny Stock Rules,
which may set forth sales practice requirements for certain low-priced securities.
Within the last twelve months, ROTH has managed or co-managed a public offering for Callidus Software, Inc. and Galena Biopharma, Inc..
A Research Analyst and/or a member of the Analyst's household own(s) shares of Depomed Inc. stock.
On September 28, 2010, ROTH changed its rating system in order to replace the Hold rating with Neutral.
On May 26, 2011, ROTH changed its rating system in order to incorporate coverage that is Under Review.
Distribution of IB Services Firmwide
IB Serv./Past 12 Mos.
as of 01/23/12
Rating Count Percent Count Percent
Buy [B] 196 70.5 56 28.6
Neutral [N] 74 26.6 9 12.2
Sell [S] 0 0.0 0 0
Under Review [UR] 7 2.5 3 42.9
Our rating system attempts to incorporate industry, company and/or overall market risk and volatility. Consequently, at any given point in time, our investment
rating on a stock and its implied price movement may not correspond to the stated 12-month price target.
Ratings System Definitions - ROTH employs a rating system based on the following:
Buy: A rating, which at the time it is instituted and or reiterated, that indicates an expectation of a total return of at least 10% over the next 12 months.
Neutral: A rating, which at the time it is instituted and or reiterated, that indicates an expectation of a total return between negative 10% and 10% over the
next 12 months.
Sell: A rating, which at the time it is instituted and or reiterated, that indicates an expectation that the price will depreciate by more than 10% over the next 12
months.
Under Review [UR]: A rating, which at the time it is instituted and or reiterated, indicates the temporary removal of the prior rating, price target and
estimates for the security. Prior rating, price target and estimates should no longer be relied upon for UR-rated securities.
Not Covered [NC]: ROTH does not publish research or have an opinion about this security.
For important disclosure information regarding the companies in this summary report, please contact: The Director of Research at (800) 678-9147 or write to:
ROTH Capital Partners, LLC, Attention: Director of Research, 888 San Clemente Drive, Newport Beach, CA 92660
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered
companies mentioned in this report in the next three months. The material, information and facts discussed in this report other than the information regarding
ROTH Capital Partners, LLC and its affiliates, are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report
should not be used as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is
not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are subject to change without notice. An investment in
the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment
in the stock may involve a high degree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without the express
written permission of ROTH. Copyright 2012. Member: FINRA/SIPC.
Page 15 of 15
MORNING SUMMARY | EQUITY RESEARCH | January 23, 2012
You guys need to calm down. Flying would be $10/ share not a couple of pennies. Maybe PPHM can close over a dollar and kill the clock for a while.
Best Regards
RRdog
Agree with these sentiments/ Still find unnecessary dilution and poor mangement (why no conservation of cash methods--deferrals???) extremely brain dead. Why no alternate methods of finance, leverage, whatever?? Why no IB on the BOD who can suggest alternate bridge financing methods.??? Brain dead. Must love unneccessary dilution.
Nevertheless and paradoxically, I remain very bullish on the science.
In regard to your remarks re FDA meetings, feel highly confident that now that the written iterations are under way that a physical meeting will take place. Cannot predict the ultimate FDA action but the political and scientific underpinnings are there to approve phase III Cotara to treat a deadly unmet need using NIH catheter method of delivery. The SPA is critical because not possible to use a placebo technique when drilling skull. BP will want an SPA in place of "gold standard" randomized test vs placebo. An SPA should insure that even this mgmt could make a deal in Cotara in the same vein that "even a blind pig can find a truffle from time to time." The proof will be in the pudding but IMO Dr. G has been in contact with the FDA on these issues for a long time as well as meticulously prepared his written work. There should be no surprises. I'll take my chances with Dr. G and I don't think the FDA is really in the business of denying a phase III in a drug that has passed all Phase II requirements. All IMO.
Best Regards,
RRdog
PS Really like the math on the NSCLC second line. Plenty of cushion. Look forward to data later this year and further data on NSCLC front line.
Why don't you make the bet that whoever is wrong will stop posting on this board.
Regards,
RRdog
As I continue to delve into PPHM I have formed some new opinions and made some observations:
1. Amy seems to definitely be gone.
2. Jay Carlson seems to have been a temporary replacement for Amy.
3. PR/IR will be taken over by Chris Keenan. CK seems to be a knowlegeable guy with 15 years experience in biotech PR.
4. IMO only, because of the practical difficulty running a "placebo arm" in a Cotara Phase III (you can't drill somebody's skull and pour in water), partners will need an SPA from the FDA to proceed with confidence. This changes my outlook slightly. Prior, I thought it possible that PPHM could get a phase III approval without necessarily getting an SPA but, I now think this is less practical. I like this better to the extent that "if" an SPA is achieved then Cotara is much more easily partnered and will probably command a better commercial deal. Again, IMO PPHM regulatory team is hard at work along these lines. IMO at some point PPHM will have to move from written iterations back to the aforementioned sit down meetings with the FDA. This is in line with many long term comments on PPHM seeking an SPA.
5. IMO there should not be as much difficulty in licensing Hepc without interfering with the cancer franchise as I had feared. IMO,if Hepc were to be licensed it could be done in different formulations than a cancer treatment.
6. Again, IMO only, I come down on the side of the argument that not only is bavi safer than interferon but that the "trend in extended periods of time" may prove greater efficacy as well. There is a lot of experimentation that has to be done here and a partner is needed. My opinion will only be validated if and when PPHM partners viral. However, I am greatly encouraged by the idea that such a license would not interfere with the cancer franchise.
Best Regards,
RRdog
KT
Instead of giving all of that very well reasoned argument as to why the ATM is working and supportive and this and that, why don't you ask management why they haven't developed any ALTERNATIVES and HOW MUCH LONGER they need to continue with this Mickey Mouse method of financing the company??? It's been nearly a decade now. At what point would management recommend new management??? I don't ask that facetiously. I just would like to know what the "horizon measurement" is where this management admits failure to develop alternate means of finance.
More simply put, do they give themselves another quarter or two quarters or three??? At least that way the shareholders --the ownership--of PPHM will know what the bogey is and can adjust properly.
Even you KT with the perfectly groomed argument cant see this as an open ended ticket extending into the universe forever?? Why not ask management the question and report back??? You're the moderator on this board.
Regards,
RRdog
Nobody misses your point. You aim to be technically correct and substantially irrelevant.
RRdog