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JR,
I think your message is well put. No ranting or raving, just a simple statement. No matter how much IP long term value PPHM is building there are practical, real world business matters that need to be cleaned up and addressed. Less talk and more deal.
Regards,
RRdog
RRdog - Any thoughts on where PPHM goes for funding in the next 1-2 months? I would think they must be getting below their comfort level for keeping about $20 million on hand.
Thanks,
pd
It is difficult to figure PPHM mgmt/BOD in this area. Regarding the macro scientific approach they seem quite brilliant but as regards financial structuring they seem rigid, comatose and wedded to the ATM.
This is doubly vexing since PPHM is a cancer research company and this ATM slow drip dilution is a "cancer that grows" the lower the price you use the ATM and the greater the percentage dilution at prices way below any rational "future discounted value model adjusted for risk". It is also a cancer that straps PPHM ability to pursue outstanding areas of clinical inquiry such as MBC.
PPHM seems irrationally opposed to debt for example. This is very conservative on their part but modest amounts of debt are often good bridging options. Many small biotechs are placing both unsecured debt and secured debt with institutional investors.
I would say using this method, using the assets and cash flow of Avid, that PPHM could probably place 40-50mm of debt at 13% with some deep out of the money options as a non dilutive kicker.
Whether or not they went this route would probably depend on how long and how confident they felt about the better option which would be sale of non core assets for less than top dollar. These are well known to include: imaging, Cotara regional or national, and licensing of Bavi viral.
Any option, including earlier partnering of core assets or sale of the whole company would be preferable to selling large percentages of the company at 10-20% of discounted fair value (as computed by the analysts that follow the company).
Were PPHM to beef up the BOD with a heavyweight IB and then hire that IB, IMO the price would move substantially allowing sale of ATM at above $3 per share for short term bridge and setting the stage for much larger financing at higher prices in the intermediate future. PPHM is still xenophobic.
PPHM might also make a regional sale of IP to BP or sell BP "rights of first refusal" or "rights to match" or "rights of first look".
As I said , it is difficult to figure PPHM mgmt /BOD in this area????
Best Regards,
RRdog
The best way for mgmt to deal with patent infringement might be just to notify the offending party they are in violation. Not likely to achieve front money. Then wait to see if there is any commercialization. At that time either sue or make a royalty deal. No reason to inhibit the testing.
Regards,
RRdog
IR is generally useless/ It will be interesting to see if Amy is still there and if you get a better reply from Jay C.
Regards,
RRdog
Mojo Good Morning,
Can you take all your slides and graphs from post 73433 forward and put "your" personal conclusions re Bavi trials for HepC and cancer and for newer compounds into plain "investor English" and if possible break those conclusions down into shorter frame impact and longer term impact. Also, any conclusions you have about PPHM patent position strength would be greatly appreciated.
TIA
RRdog
Sunstar,
Another guy I seem to be getting on the same page with. I agree with you about the design of the Hepc trial. DD of all people was the first to question the validity of a trial without SVR. This trial seems to have been designed for a specific commercial purpose, the real results will not be known for some time. IMO this is supported by SK comments re licensing over several cc's. I also agree with other posters who have commented that the real success or failure in this (non critical) trial will be whether or not PPHM can license the technology for further development and to what extent that license can suspend ATM dilution.
Thanks for the kind words on my mathematical analysis of the probability of licensing.
Regards,
RRdog
IO
This was an excellent suggestion after an admission of lack of knowlege. Very rare.
As it stands, PPHM did file an 8K re this PR on viral inclusive of the complete release.
Regards,
RRdog
We are getting to the same page. My hope/guess is that mgmt is getting there as well. I think BOD getting very touchy about the dilution issue. Frankly, it is logically inconsistant and makes them look stupid to sell large percentages of PPHM at a dollar plus if they are positing and their analysts are positing that PPHM is worth ten times that at least. I back this up by the CC chatter about "focus", "finite or limited resources", and "actively looking for partners". These are phrases not often heard in the past.
IMO BOD appears to have finally come to the conclusion many of us have suggested for a long while: IT IS BETTER TO SELL NON CORE ASSETS FOR LESS THAN TOP DOLLAR THAN TO SELL PIECES OF THE WHOLE COMPANY FOR WAY BELOW FAIR VALUE.
It's a new year. Maybe mgmt will get rid of current PR operation and upgrade to something more "shareholder friendly" and effective. Maybe mgmt will rethink their attitude re IB's, bridge financing, major research that goes out to major institutions, broadening and strengthening of the BOD. You never know but, again, it is a new year and time to reflect and open up your thinking.
Regards,
RRdog
Thank you Corporal. I'm promoting you to Sergeant.
LOL
Regards for the New Year,
RRdog
Geo,
Your suggestion is "bundling to cut risk" and it can be done and has been done. I have no idea whether it is doable with PPHM products but one company which could do both is Abbott Labs.
I like my idea better about linking it to a cancer "first look" which really costs PPHM nothing but gives the first looker a bidding advantage or a geographic advantage.
This Bavi viral sale is really a "tell" on PPHM poor financial planning. In a weird way shareholders may be able to profit from the necessity to sell IP. This is the first time BP has a chance to get its hands on Bavi with a unique MOA and play around with it.
If PPHM were financially better structured, they would never sell this piece of IP now. Instead, they would do much more testing to establish greater value.
All IMO only of course,
Regards
RRdog
Good Morning JR,
If you ask the wrong question you usually get the wrong answer. The real question about Bavi viral from the point of view of PPHM shareholders is : CAN IT BE PARTNERED WITHOUT FURTHER EXPENSE???
I have no starry eyed vision of Bavi viral based on the current PR release, but, I take a different view on partnering of Bavi viral than all the critics and IMO think it is highly probable.
It's like a poker game. If you have a drawing hand and the odds are three to one against you and you can only get a one to one return you fold. But, if you can get a 15-1 return you call. Bavi viral is a lot better than 15-1 for big pharma. If they have to acquire the rights for 10,20,30,40,50mm it is peanuts in terms of dollars and utility from their perspective. From PPHM perspective it is balance sheet needle moving. That sounds like "deal territory" to me.
If BP has to run more extensive tests re dosing, size, time to EVR, SVR, this is peanuts from BP perspective. Viral testing is a lot quicker and less expensive than cancer testing. BP has bought a lot of stuff much more risky than Bavi. If Bavi had lack of utility in viral, it would only be a minor write off for BP.
Look at the size of what they are going after: billions/ year in revenue in substantial parts of the Hepc market, billions/year in revenue in interferon replacement market, billions/year in revenue in other viral markets, untold amounts of revenue as adjuvant in cocktails.
Mathematically this is almost a no brainer. They know that the stuff is safe and has an anti viral effect (to be determined over different time segments). The only time BP has to pay out more is after signifigant milestones which lower the risk massively or in royalties against revenue which carries no risk. (Hint to mgmt: The deal could be much sweeter if it carried a right to "first look" on cancer or--- a right of "first refusal" or right to "match" in some geographic area for cancer)
While we are doing the math: one thing we know with fact certainty is that today is the last day for tax selling. IMO PPHM has seen many, many at the market block sales in last few weeks that looked like tax selling to me. It will be pleasant to have this pressure removed.
The key issue for PPHM stockholders in the "short term" remains an IP sale (imaging, viral, cotara) that suspends the ATM.
Most of the above is just speculation on my part but the math is the math.
Best Regards for the New Year
RRdog
Entdoc,
You have to be careful to manage your expectations with PPHM since they are reticent to share information and the information they must share is often poorly worded by their PR people.
I think PPHM had telegraphed a meeting in the fourth quarter with the FDA which morphed into a virtual meeting with written iterations. PPHM did not promise hard information beyond that or an FDA decision.
I share your impatience and IMO there is high probability of a positive FDA decision in due course. IMO the FDA is not in the business of blocking a reasonably based Phase III and Cotara seems to meet that criteria since it passed all criteria in Phases I and II and has been granted orphan drug status and is very PC with the new NIH delivery method.
I think the negotiation is about the protocols such as size and length of the Phase III, what the end points are exactly, what the geographic and patient criteria will be, etc.. It may take a little longer if PPHM involves potential partners in the negotiation (for their viewpoints) and if PPHM presses for the SPA.
It is important to get the Phase III approval with "reasonable" protocols so that potential partners are confident in eventual success. Garnick has demonstrated an ability in other drugs to get protocols with which the corporate sponsor can be successful.
The one change from the PPHM side that I can see is that they now seem open to domestic partnering as well as international partnering. IMO this is a step in the right direction and more in line with PPHM corporate "identity" (PPHM has no marketing expertise and this is a highly specialized market). The more shots at partnering the better I like it.
Regards,
RRdog
Soul,
It may mean two years to treat patients but you could partner it and monetarize it tomorrow. Remember, "time to money" is not the same as "time to market".
Additionally, in this particular case, Garnick is also trying to get the FDA to approve an SPA. This would actually allow the sale of the drug during phase III testing on humanitarian grounds since Glioblastoma is a deadly unmet need.
An SPA is not essential but, IMO, it would put PPHM in a position to cut a sweeter deal.
Regards,
RRdog
Entdoc,
I believe that an actual meeting has morphed into a series of "written iterations" after PPHM delivered a very complete package to the FDA. This has been well described by PPHM and generally accepted as in the right direction by most shareholders. In the modern world a "virtual" meeting or discussion may be more efficient than a physical meeting.
I like the focus and am pleased there is no discussion of anything else i.e. further Phase II testing. The discussion seems centered on the protocols for phase III and I hope on a possible SPA.
I hope that is clearer. If not, Stealthy Lurker's reply 73165 is more complete in this regard.
Regards,
RRdog
Hardly qualifies and is qualified by "IMO".
Happy Holidays and appreciate your good cheer.
RRdog
I notice a lot of hub talk about the massive virtues of Bavi making it sound like the drug of the century. That reminds me of "Star Wars"----in the distant future in a galaxy far far away. While these optimistic claims may or may not be true, IMO it's not really where shareholders want to be focused "now".
What interests me is that we know "with fact certainty" that tax selling season is over in two more market days. I have seen a lot of market sells in size over the last few weeks that look like tax sales to me and I will be happy when that "at the market" pressure is over.
I like that at present I hear no Cotara discussion about any other subject than the shape of Phase III. IMO the only thing that makes sense for PPHM is to partner this drug and I feel there is a high probability that PPHM can get substantial enough amounts of upfront cash for a phase III drug to suspend ATM and materially improve balance sheet.
I am thankful that the delisting clock keeps getting reset to zero. I look forward to putting this issue behind us. (and I acknowlege that I am writing this on a down day with the stock once again below $1.00).
I very much like the recent work up Dr. Thorpe and his team have done in "imaging". IMO the key phrase in all the verbiage is that he considers this latest work as "proof of principle". Since I consider Dr. Thorpe to be one of the "adults in the room", IMO this technology is ready for a "clinical partner". There are large companies in this field such as GE and Abbott Labs to name two. It is clear to me from Dr. Thorpe's discussion that there are major markets for this product that would be attractive to such large companies. It will be very interesting to see what PPHM mgmt can bring to the table and how quickly in this area.
IMO there is a good probability that Bavi viral tests equal to or better than interferon for efficacy against Hepc and, of course, much better in AE's. I have done a lot of work in this area and rightly or wrongly have convinced myself there are big markets for this product not withstanding competition with new oral drugs (i.e. interferon replacement). Again, if results are good, it will be interesting to see how quickly PPHM mgmt can complete a deal in viral. IMO this particular test was done with specific target companies in mind and the upfront value might well exceed Cotara values.
Best Regards and Seasons Greetings,
RRdog
"Tepid" is an interesting word.
For what it is worth I think the data on Avastin is "tepid" and its still one of the largest selling drugs in the world.
Seasons Greetings,
RRdog
You got my point.
LOL
RRdog
As I posted earlier, I like Dew's list of eighteen mistakes newbies make in biotech stock and would like to briefly review them as they relate to PPHM even though these rules seem rather self evident at the level of this message board:
1. If a drug does something notable in animals, it must be safe and effective for humans.
PPHM way past animals unless you include humans as animals.
2. If a drug from the same class succeeds, it means my company's drug will succeed too.
PPHM Cotara and Bavi both have rather unique MOA so nobody on this board suffers from fuzzy comparisons. In fact, if PPHM ever proves out the unique MOA may make it extremely valuable.
3. If a drug with the same mechanism of action succeeds, it means my company's drug will succeed too.
Again, PPHM has a unique MOA. It is harder to prove but the "back nine" may be great.
4. If a drug has fast track status, it means FDA approval is very likely.
PPHM has fast track in some cases which isn't a bad thing. However, all the PPHM vets on this board know how slow fast track can be. No help needed here.
5. If a drug has a Priority Review, it means FDA approval is almost certain.
NA to PPHM and see answer to 4.
6. If a drug has an Expanded Access program, it must be safe and effective, so the FDA will obviously approve it.
NA to PPHM as far as I know. PPHM is hopeful of an SPA in Cotara.
7. If a company has a meeting with FDA staffers and does not issue a negative press release, it means the FDA agrees with evrything the company is doing.
PPHM currently negotiating with FDA re Cotara Phase III protocols. Nobody on this board thinks the FDA is going to roll over but, we are optimistic re Cotara Phase III go ahead.
8. If the CEO says a company is talking to partners, it means a partnership is imminent.
PPHM has been slow to partner and loath to partner too soon. IMO PPHM talking to numerous "potential" partners. Everybody on this board knows it takes two to tango and nobody talking about done deals. No help needed here.
9. If a company goes into a period of radio silence, it means they are negotiating a big partnership deal or buyout.
PPHM has been in radio silence for years. No help needed here.
10. If an FDA application is started on a rolling basis pending the completion of clinical data, it means the data are positive. The company would not waste so many man-hours of work on the submission if it weren't.
A rolling app not really germain to PPHM. In the past PPHM has wasted many man hours and hopefully has stopped going down blind alleys. No help really needed for the message board on this one.
11. If a company is preparing for a launch--e.g. by advertising for sales reps-- it means their drug will surely be approved.
NA to PPHM with the possible exception of manufacturing gear up.
12. If a company holds an investor conference call on a different day of the week (or a different time of day) from prior conference calls, it means a hugely bullish announcement is coming.
IMO think this board has been around this issue twenty times already. All PPHM cc's to date usually result in sell offs. No help really necessary re this point.
13. If a former executive from Big Pharma joins a small biotech company, it means the small company must be a winner.
Not necessarily, but, if clusters of BP talent come to a small biotech it doesn't hurt. If four outside institutions run IST's it also doesn't hurt.
14. If the company's Scientific Advisory Board has one or two famous individuals, it means the company's drug candidates must work. These people would not align themselves with a failure!
Also true but, when you have massive scientific board talent and four outside institutions working with your drug it doesn't hurt.
15. If Rodman and Renshaw issues a positive opinion on a company, it means the company's prospects must be bright.
No one on this board takes R&R seriously nor JMP, MLV, or Lifetech. One day I hope PPHM will get some world class sponsorship. No help on this score really necessary.
16. If a well known investor or hedge fund owns shares, it means the company will surely succeed.
No vets here believe this and we have some interesting investors.
However, inst. ownership is rising and one day may get over 50%.
17. If a small biotech company is located in the same town as a Big Pharma, it must be a top candidate for a buyout.
PPHM located in Tustin Calif. Who cares? No help needed on this point.
18. If knowledgeable posters are bashing a stock, it means they are trying to accumulate shares, so I should increase my holding!
Who on this board would ever listen to knowledgeable bashers for advice --particularly newbies. No help needed here.
Best Regards,
RRdog
I find DD's 18 points for newbies very interesting. More about this later. The most interesting thing about DD's memo is the last phrase:
“The efficient-market hypothesis may be
the foremost piece of B.S. ever promulgated
in any area of human knowledge!”
In PPHM the primary negative argument is really based on the low stock price. I have been suggesting for a long time that PPHM shareholders not confuse price with underlying values in the IP.
(See Ratain Feurstein Hypothesis)
In the underpinning theory for his whole reason for blogging DD is saying look at the guts of a company and not the price. I agree with that.
So far I see nothing in all the nitpicking that would change my opinion on the PPHM IP. IMO stay the course.
Best Regards,
RRdog
Mojo
excellent reference.
The more I delve into the oral non inf market for Hepc the more I am convinced of large areas of the Hepc market open for other treatments and the more convinced I am that an INF substitute would have value.
I think this was well referenced by SK in the cc when he talked about PPHM marketing studies in this area indicating a need for the "foreseeable future" re bavi in Hepc. Since he had already referenced developments at VRUS, INHX etc. I took that to mean the foreseeable future beyond those developments.
Regards,
RRdog
Good post. Thanks
RRdog
Thank you Firefox,
You put it much more precisely and scientifically than I did.
Regards,
RRdog
It's hard to sound optimistic on such a moribund day but I agree with comments on bavi as an immunoregulator in more than Hepc.
SK has been talking about licensing bavi viral for two cc's now.
He is talking about this test of bavi/ ribivarin vs interferon/ribivarin as a "randomized proof of principle".
Oral Hepc non inf treatments still have a ways to go to prove out but, assuming they will, they further have to prove out on different genotypes and on the "sustainability" of their effect.
There may be large markets re genotypes untreatable by new oral drugs and patients that relapse.
Furthermore, Hepc is a subset of the overall interferon market. If bavi shows well in a "proof of principle" clinical trial vs inf against Hepc then the proof of principle may extend to other INF usage and IMO it is marketable. Overall INF market several billion.
I do agree with Mojo that if we had gotten there quicker it might have been worth more. However, it is always good to remember that what might be a modest deal for a larger company could have signifigant meaning for a company the size of PPHM re balance sheet, going concern letter, ATM dilution, ability to move more aggressively in new trials , etc. etc.
As examples, VRUS was acquired for north of 11 billion and INHX has moved up to about 1 billion in market value predominantly because of their Hepc product. Imagine how much better PPHM would
look if it made a deal for just 100mm. I am just using this figure as example and of course have no inside information on the types of deals that might be consumated. Such a deal would be an excellent "bridge" toward deals in Cotara and Bavi cancer.
IMO, Best Regards,
RRdog
Thanks JR,
Always good to get a little agreement.
RRdog
Dew,
Your days of libelous claims about cherry picked data are rapidly coming to an end.
Lots of luck,
RRdog
The point is not that ATM is a two edged sword. We know it has a place at certain times. The point now is that armed with better data there are better alternatives "now".
RRdog
I hate to admit it ,but, I have to agree with JD on this one. If BP were awake they would bid up for PPHM because it would be hard for mgmt and bod to defend a higher bid when they are showing such tremendous financial "weakness of mind" by selling a large percentage of the company at $1.00/ share. In a weird way that makes me a bit more bullish.
Let's get clear on this ATM at this particular time in corporate development. You can not repeal the law of supply and demand no matter what your opinion. The way you create value in anything including stocks is to create demand and kill supply.
PPHM scientific achievement is creating demand but by constantly filling that demand with highly dilutive stock the price is moribund. This is shooting yourself in the foot by dilution. This gives the bear side of the market confidence, and adds to seasonal tax selling weakness.
If you have world class science why not take it into a world class IB, give them a few million warrants graduated between 5-10/sh and work out a more sophisticated way of financing the company.
Mgmt/bod should do it before they are forced to do it and forced out.
The other alternative is to cut a third party deal already and stop talking about it for years on end.
Regards,
RRdog
I'd give mgmt about a B- moving up from C+ (improving). Obviously, they couldn't or wouldn't ever answer my whole wish list and they are stylistically challenged, but, I did hear some interesting things on the call. Forgive me if they have been mentioned in the hundred messages since the call but in summary:
What I hear that sounds new or different:
1. No immediate short term gratification today on data--small delay/ no change to basic story. Lots of data coming over near term re Hepc, Nsclc, etc.
2. Burn rate could slow signifigantly due to slow down going forward in clinical expenses (peaked for now) and increase in Avid revenue. A difference to delta in burn rate of 3-4mm/ qtr is possible which is important to those concerned with dilution and ATM market interruptions. Share count appears to be 86mm + at present. (I use 100-150mm share denominator in all my forward calculations ).
A more "realistic" tone from PPHM mgmt re partnering and finite resources and timing:
1. Talking now about partnering Cotara both "domestically" and foreign not just foreign.
2. Talking now about partnering "imaging" and it sounded like the partner would take "imaging" into the clinical trials. It sounds like "imaging" very close to being ready for clinic. Still maintain IMO that imaging is a huge market.
3. PPHM sticking to the game plan of licensing Hepc (viral) asap. PPHM acknowleges the size, competition, and intricacies of this market. IMO this is a huge market with lots of niche room that could be "needle moving" for a company of PPHM size.
An improvement in rhetoric:
1. SK called the early stage randomized data a "game changing" early validation re discussions with institutions and potential partners.
2. Joe Shan took "one" of my suggestions and actually talked about the size of the lung cancer market in the U.S. (220,000 new cases per year with poor survival rate.) Again, this market is huge IMO relative to size of PPHM. Thanks Joe --a small step in the right direction.
Cotara discussion with the FDA has become written:
1. General agreement that this is a positive development. If the FDA complies with their own game plan PPHM will have a written document as to path forward for phase III. THIS DOCUMENT CAN BE USED AS THE BASIS FOR A PARTNERING AGREEMENT. This is much better than PPHM talking to partners about their "sense of the terms going forward". The first FDA draft allows PPHM to CONSULT WITH POTENTIAL PARTNERS BEFORE RESPONDING TO THE FDA. IMO this is Garnick being smart.
Avid:
1. Current plant could handle 30-40mm in volume business.
2. Current plant volume could be easily doubled at existing site.
3. Volume could be readily expanded in near by warehouses with more modern modular equipment.
4. Avid could handle manufacturing world wide for Cotara.
5. World wide manufacturing for bavi too large for PPHM alone.
I did not hear anything new yet on BOD expansion, major IB, business plan to bridge or substitute for ATM (other than potential partnering).
Re Dew:
From his comments, general blog position re biotech I do not think he is stupid. He's entitled to his opinion regardless of his motives and apparently regardless of fact pattern. Geo seems to have backed him off. Dew's rhetoric is harsh using words like "scam" , etc.. I wouldn't waste too much energy on him and if his negatives so far are the best he can do PPHM may be in better shape than I thought.
Best Regards,
RRdog
Geo
Everybody seems to be on the same page this morning. Now all we have to do is get ROCHE to agree with us (probably a bit tougher than just defining the valuations) or find some other method of funding before being overly diluted-- and we are out of the woods.
Given the general agreement on the data, the best thing PPHM can do is turn off the ATM. They have been singularly slow to realize that PRICE IS A FUNDAMENTAL. Any interim deal that brings cash into the company now would be a big plus. Once the price of PPHM shares are allowed to lift to a value more reflective of the IP then the dilution issue is a lot less of a problem.
With the IQ's working at PPHM you would think somebody could come up with a better solution than continual ATM at any price. I don't buy the machiavellian argument --we are past that point--this is just sheer stubborn slow thinking in this area. PPHM is not as developed in the CFO area as they are in the scientific area. Hopefully, they may be able to partner some IP in Cotara or Hepc and shut me up on this subject of dilution and poor financial planning once and for all. Short of that, they should start taking the randomized data into larger IB's and look for more creative ways to bridge the time to partnership.
Best Regards,
RRdog
Mojo,
Now we are getting even closer. I like your analysis of the present value of the two Roche drugs and a 10% value for defense at approx 5 billion. I like my example of 3 billion a bit better because it is more conservative and because IMO the present value of Avastin is eroding faster than straight line depreciation do to AE's and circumscribed labeling at the FDA. I can live with a 3-5 billion dollar number.
IMO what I really like is that if the conservative argument about the decline in Avastin is correct , it puts more pressure on Roche to act at a value within our range.
Thanks for those numbers on present drug values.
RRdog
Mojo,
We are saying essentially the same thing. I am saying that the delta--the difference between the Bavi efficacy and that of Avastin is wider (larger). Instead of being approx 39% to 36%, using your apples to apples data comparison it would be more like 39% to 30%. This is quite a remarkable step forward in efficacy and combined with the improvement in AE's makes Bavi more interesting not only to the FDA but, also to BP.
Since the little disagreement with DD, I try to stay away from the term "cherrypicking". Let's just say the Avastin data is less refined by subset than the Bavi data.
I appreciate anything you add regarding the quality of data or type of testing. There are areas of PPHM mgmt style that I would like to see improved but the data and improving clinical design are not an area I worry about.
Regards,
RRdog
Mojo,
Very good post. The more you micro analyse the data the wider the delta seems to be getting in favor of bavi vs. avastin. Not only are the results in "tougher patient populations" more favorable but Bavi is using less chemo.
On a slightly different subject:
I really like the "defensive" approach to valuation. By this I mean that a BP may look at 100 new possible drug pipeline acquisitions "offensively" so that each new drug gets 1% of their theoretical attention. However, they look every day defensively at their own portfolio of drugs or 100% of the time.
Let's say for example that Roche does 12 billion a year in revenue and their products have an average 10 year life span going forward before being obsoleted or becoming generic. That's a lot of defense to play (10 x 12 equals 120 billion dollars in rev.). If a company like Roche really felt threatened by a drug such as bavi one could easily imagine them paying 3 billion (i.e.) just as a defensive measure. In other words the defensive leverage on a known drug when computing valuation for Bavi is enormous compared to the untested offensive leverage.
From the perspective of a PPHM shareholder we are trying to make the offensive case for bavi being effective and doing lots of future revenue and passing regulatory hurdles and we are making a good case. However, from a company like Roche's perspective the defensive case is a hundred times stronger.
If Bavi can also be phased in as a replacement or partial replacement for Avastin so much the better. Therefore, if Roche pursues PPHM defensively in immediate time they can phase in the new drug at their own pace over future time and take their sweet time with massive phase III proof. The really interesting thing IMO is that Bavi may fit a number of BP programs and any hint of competition might make Roche extremely aggressive.
Best Regards,
RRdog
The AF article on PPHM clinical trials was one of the best I have seen. It is interesting that he comes from a negative perspective but seems to be slowly turning more positive.
However, there is one point in the article that seems contradictory and is worth taking issue with for purposes of our message board discussion. After knocking the results as "not statistically signifigant" (???) he makes the point that PPHM appears to have reported abnormally high results for the chemo arm of the trial in the following:
"The 26% response rate in the control arm -- those patients who received chemo only -- might be unusually high. In its benchmark phase III "E4599" study of Genentech's Avastin in non-small cell lung cancer, researchers reported a 15% response rate in patients treated with carboplatin and paclitaxel. [The response rate for Avastin plus chemo was 35%.] Both Peregrine and Genentech enrolled the same type of lung cancer patients in their respective studies so making cross-study comparisons isn't totally out of bounds, at least for our purposes.
Other lung cancer studies employing carboplatin and paclitaxel found in the medical literature report response rates in the 20% range, or more in line with what Peregrine reported from its bavi study on Tuesday."
If the chemo response rate is really closer to (15-20%) than (26%)
rate that PPHM is using conservatively then the percentage improvement with bavi is even greater than as reported. The lower rates are from the Avastin study and other independent studies.
Since Garnick is the godfather of Avastin regulatory approval I think PPHM is in extremely good position here to not only improve on Avastin overall results, improve upon Avastin percent of NSCLC market that is applicable to the drug and improve on Avastin side effects. That triple punch augurs very well IMO at the FDA level.
Best Regards,
RRdog
I think JR has done us a great favor by really getting at the underlying reasons the study was done in this particular form and sequence. Understanding "why" something occurred is as important as understanding "what" occurred. (See Thorpe on MOA)
The Feuerstein-Ratain rule is almost a statement of the obvious.
Understanding the underlying "whys" of PPHM valuation is very important and therein lies the "delta" in my opinion for a great stock investment. PPHM is not properly valued per the clinicals for the following reasons:
1. The clinicals were done on a shoestring budget and slow to develop and only now beginning to present randomized late stage phase II data that will only get stronger with blinded tests, and more complete data re PFS, MOS, duration , etc..
2. The poor financial structure of the company (regardless of the benefits of independence) have subjected the price of stock to an aggressive and poorly thought through and poorly planned and poorly executed ATM selling program.
3. No major IB are yet involved with PPHM.
4. PR and IR for PPHM have been a disaster.
5. As JR points out, the investment community does not understand the Garnick FDA strategy.
Again, all these factors create "Delta" i.e. the difference in the slope between perceived value and underlying value. The F-R theory will never win any awards because it is shot full of major holes of omission but, I still predict that IMO Dr. Thorpe will win the Nobel prize in medicine for work on cell surface chemistry and immuno stimulation re cancer if Bavi/PS proves out.
I would like to add a final thought on that horrible phrase "this time things are different". In most investments and economic cycles things are not all that different and we are trained to be cynical in our approach to new things. Of course, occassionally things are different in a major way. If this were not the case there would be no stock movement of any kind because everything would be perfectly valued according to model.
At PPHM there are two things that are different now than at any time in the history of the company IMO:
1. The data is coming in stronger in late stage randomized and ultimately blinded data. More to come.
2. The media coverage engendered by the new level of testing has raised the PPHM profile including numerous industry articles and a report by Maria B. on CNBC. These are opening salvos.
PPHM needs to really leverage these new conditions to increase market value by:
1. Completely updating and revamping the media PR effort
2. Leveraging the data at major IBs, that have major institutional research following and are easily capable of doing some form of acceptable bridge financing until proper prices can be achieved for a new capital structure.
3. Leverage the data with BP and international BP
I look forward to seeing how PPHM handles the new conditions starting with the cc on Monday. I try to keep expectations low but this is a huge opportunity as the data comes in and I look forward to :
1. Hepc data
2. More data on NSCLC front line and secondary
3. Pancreatic data
4. Cotara follow through at FDA
Best Regards,
RRdog
Threes,
All excellent business questions. Add them to the pot. The point is more transparency is needed.
mojo 72035
If ever there was a large drug company that needed to add to its revenue it is Pfizer. They should be an excellent candidate for partnering with PPHM.
Regards,
RRdog
Some open suggestions to PPHM mgmt on the upcoming CC:
Shareholders are all ears regarding the excellent technical developments and we appreciate mgmt efforts to pass along information in this area.
However, once again, mgmt has a huge opportunity to act like business people and address business issues which are of "paramount importance" as well as the technical developments.
It has been suggested that mgmt is as "frustrated" as shareholders have been at the low, low valuation afforded PPHM in the market place relative to peer companies with lesser IP pipeline and that mgmt is "concerned with dilution". If this is the case then the following would be helpful in discussion on this conference call:
1. A clear explanation of mgmt view of the "timelines" of all product development.
2. A detailed discussion of where PPHM stands in partnering discussions on various products with sufficient color so as to be intelligible to the average shareholder. Which products fit niches for BP in what timeline order??
3. A clear discussion of other methods of finance than the ATM including sale of parts of IP, geographic sales, leverage, partnering and timelines.
4. A clear statement on the path forward with lesser IP such as Imaging. What is intended to be done with the outstanding MBC results????
5. What is the business plan for growth going forward at Avid if any???
6. What is mgmt view of the business goals for Cotara??
7. What immediate plans if any to shore up the BOD or business mgmt and to improve IB??? Armed with increasing amounts of "randomized data" does PPHM have any plans to enlist major IB's such as GS which is already a shareholder???? If not, then why not?? After all what is the point of having improved quality of data if you don't use it to improve market value??
8. What plans does mgmt have to further control burn rate?
9. What new plans -since all the current methods clearly don't work--does mgmt have for selling the PPHM story to investors to gain higher market valuation and lessen dilution?? What new plans does mgmt have in the PR area???
10. Shareholders will know from the 10Q what the o/s number was at the end of Oct quarter. What is the current share count so shareholders can gauge the rate of dilution???
11. How does mgmt measure the increase in IP value vs the rate of dilution??
RRdog
Volgoat,
You must be going to the same "Kool Aid" bar that I do. The next time you go out you should take "Frustrated" and "Jakedogman" with you. Those two guys really need a good night out.
LOL
RRdog
DD,
What you are saying is that if recist criteria were used and reported on 83 patients and 3 patients were unfinished that technically the 83 are a subset of 86.
That hardly sustantiates a blood libel that the clinicians at PPHM were "cherry picking" the data.
I think you should relax and rethink this.
RRdog
My take is that the NSCLC results were released slightly early for two reasons:
1. As suggested by Firefox (to give credit where credit due) to be in advance of Thorpe conference presentation tomorrow. It will be very interesting to get the full transcript of Thorpe speech and to get his take on what is signifigant in the research and where the process is heading.
2. There is a small practical reason for pre releasing the data which is to mark stock back above $1.00 and kill any possibility of Nasdaq listing kerfuffle. When you still fund with an ATM this is a concern.
I notice over 7mm shares of volume today. Anybody that wanted to sell for tax reasons, loss of faith, or just plain boredom was able to get out in size. It will be interesting to see if the stock is able to resume the up move at some point and whether it will be able to move further more easily, i.e. on fewer shares, indicating a "decrease in motivated sellers" and more "conviction" among share holders.
I notice that DD has a number of very negative opinions. I never take what he posits very seriously but on one point I have to take a moment for serious exception. There is a big difference between "cherry picking" data and incomplete data due to last enrollment. The cherry picking claim is libelous and unsupported and has never been PPHM or Garnick style as evidenced over the "last two decades".
Now let's return to core principles:
The purpose of data (regardless of price movement) is to clarify whether PPHM will have a product for sale or become more interesting to BP to acquire. IMO only we can intuit the following from todays release:
1. PPHM data both in efficacy and safety continues to remain extremely consistent. This is the hallmark of the scientific method (You have to be able to repeat the experiment) and very helpful at the FDA. Big plus for PPHM and ultimately for patients.
2. Todays' frontline NSCLC data augurs very well IMO for second line data. The chemistry is the same in both instances. Given past consistency, IMO I expect second line data to be favorable for PPHM and probably to be the best second line results ever published. If this opinion is correct and since second line NSCLC is a most deadly unmet need, IMO Garnick will have a great shot at AA or AA in tandem with additional testing.
3. Todays frontline data has better efficacy than Avastin and much better safety and side effects profile. If I were an executive at Roche and my largest drug was losing "label" and market share, I would certainly want to look at Bavi as a replacement for that lost revenue and I would be willing to pay for that privilege. Ditto other BP particularly Pfizer.
4. IMO the ORR of 39% could be better and over time I expect PPHM scientists to improve this. I think EM has it right when he talks about wanting to look at the OS, and PFS, duration of response and MOS. In fact, PPHM will have "four" more data points to report from this study in addition to data from other studies. IMO these additional data points are likely to be similar to preliminary data in these areas given bavi "consistency". Though I envision better future numbers as the drug is enhanced in the laboratory THESE NUMBERS ARE STILL THE BEST AROUND.
5. I continue to be impressed with the side effects and safety profile of Bavi. This makes the product much more saleable.
6. I am very impressed by the unique MOA and this is why. If a physician advocates a course of treatment for a patient (in NSCLC or other cancer) and that treatment is failing he looks for an alternative. A product with a completely different MOA gives that physician a "real" alternative as opposed to a "me too" drug. This IMO augurs well for market penetration and that is what BP is all about. As BP has more and more time to study the new MOA, IMO they will find more value in Bavi.
7. Large institutional investors are savvy about the pipeline needs of BP. If they believe PPHM fits various BP pipelines then they are stock buyers because they see an "exit strategy". (Dr. V doesn't look so bad now)
8. Also, expect "update" from the several firms that follow PPHM analytically and expect them to maintain targets above or possibly to increase target. I expect new reports from additional firms such as Piper Jaffrey to eventually initiate coverage. Since PPHM is a candidate for capital financing it behooves firms to compete for this lucrative business.
On a different subject altogether:
The hot data button "in this market environment" is HepC viral data. It will be interesting to see what this data adds to the PPHM discussion shortly. Still of the belief that PPHM viral data will be important to BP for revenue maintenance and as an overall INF replacement.
Overall, IMO, todays' upmove was trivial, and I continue to hold the opinion that the major mistake of shareholders will be in selling too soon.
Best Regards,
RRdog