Avid Bioservices Inc (CDMO)

[Protector]

cheynew, you keep saying that but it is not correct.

For starters much of that compensation is WORTHLESS if the PPS doesn't appreciate. So you can only look at the CASH part when making the statement you make.

For the other part included in that 'piggy bank' as you call it it must have value.

Now the strange thing is that with a high PPS that other part is MUCH MUCH MUCH more lucrative then the cash remuneration. If they would care about Wall St (and count on Wall St to bring the PPS up rather then seeing it go up on real hard durable achievement) then they would make a LOT more money then cashing their fees.

What is more, they would not even have to wait year after year after year to get it. They would have it all at once.

If the BoD wouldn't be that loaded with Stock and cheap options and they would have given the bonuses completely in cash so that the PPS could never matter to the BoD then that would be another thing, but it isn't.

Furthermore it is an over-easy statement certainly in the case of ES who put his own money on the table to safe PPHM many years ago when it struggled for its financing and had the potential for BK.

One would still have to explain what the incentive might have been there to do that and risk own money (while the other BoD members did not and probably could not) if there was no outlook or reasonable believe that PPHM could after such injection return that money through the share system. because in ALL OTHER SCENARIO's it is LOST (TOTAL LOSS) for ES. getting it back as cash compensation over time is equally a risk and by the way it is SK who did not inject cash as ES did that gets the bigger compensation. Also ES had no guarantee that he would get it back that way either and at the current rate is was a multi-years risk. PPHM could again have gotten in financial trouble in that time-frame.

So they want the PPS to appreciate, no doubt about that, but they don't want it to appreciate at ANY PRICE. So making poor deals, giving in to the sharks that know now may be the last time to try to get their hands cheaply on something valuable, is not in their book.

And that takes a certain amount of courage because it is certainly not agreeable to receive all sins of Israel over ones head day in and day out because there is no partnership announce, no buy-out or acquisition, etc. It would be so easy for them to make a quick bad deal and get that of their heads and even such quick bad deal would for sure leverage sufficiently into the PPS for all to make good profits. But not doing so now is what will constitute the BULK of the reward. Have a PIII approval or having possibly outlook on a PIII approval makes a BIG difference at the negotiating table.

I think that so short to a PIII approval PPHM BoD has all interest in to at least run the PIII alone and have that card in their, and ONLY THEIR, pocket to negotiate with. Then you are looking at scenario's that are more Genentech alike and huge leverage for the PPHM shareholders and not leverage directly into the pocket of the BP.


And on a side note. Someone posted that when a deal, say acquisition, would be made know at lower prices and one would get out of PPHM and invest the revenue back into whatever company that bought PPHM the leverage would come from there. I counter argued that in another post, but in the context of the above I'dd like to add this:

If PPHM is acquired at an HONEST price per share (including cash + possible shares of the acquiring company) at a price/time where the full potential can be incorporated in the PPS (which cannot be now unless the potential acquire would be prepared to accept Bavi's potential without PIII confirmation which given the amounts that potential would represent is very unlikely) then the theory of re-investing would hold.

Why then and not now? Very simple, if such acquisition would take place based on Bavituximab REAL potential then Wall St and the complete BP community, the media and all small and big investors will know it about because of the MAGNITUDE of the deal (we are talking news-paper and TV here). All will then know that THAT BP has its hands on the golden eggs (to use MD's terminology :), and then the appreciation of THAT BP's PPS will not be in cents or just a few dollars. As Warren Buffet stated: Patience!

And what is more, such an above scenario would show in THAT BP's quarterlies probably already within 6 months. Increasing Bavituximab production in such a set-up is not a big problem and BP has its channels directly to the doctors that already treat the patients with the chemo/radio and immuno therapy drugs.