Avid Bioservices Inc (CDMO)

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Going it alone vs going it alone!

PPHM going it alone or not has certainly been in the centre of the debate here on the board. But what is in the words? Going it alone can take many forms.

The cons will argue that PPHM doesn't has the depth of pockets nor the contacts and the medical network for marketing and sales. As a consequence they'll conclude that going it alone will kind of either kill the company or be a process that takes so long that at the time it is done the apes can speak.

And the above is a strong argument because we all know that running the clinical trials of a drug, Bavituximab for instance, and getting it approved is one thing and getting it on the market another. While the CT chain is long, every step of it can be budgeted and success or failure anticipated and dealt with.

But bringing the drug to Doctors and making them use it that is another thing. Doctors are all over the place in the US and the rest of the world, and they have there habits, loyalties or incentives to possibly not use Bavituximab, certainly if it is not the SOC for the condition at hand.

But does going it alone needs to be a black or white story for PPHM? Isn't there a way to go it alone and still have the BP's (plural) at your side rather then becoming part of a BP (willingly or by hostility, gradually a la Genentech or suddenly and completely).

We have to keep in mind that Bavituximab is quite exclusively positioned. It is a combination drug which means you always give it in combination with at least one other drug. And for the conditions where such combination becomes the SOC the end result is and has always been, and probably always will be, that the survival expectations as well as the statistical chances of complete response (CR as we saw in breast) increase meaningfully.

What Doctor would be against that. But I can hear you say: "What about the cost?". Yes it is very probable that Bavi will drastically increase the total treatment price but there are generics as well for Docetaxel ans for Sorafenib that cost less then 10% of their original. So in the end that treatment wouldn't be that much more expensive and given that Bavi has a wide application field its price will very possibly go down too after a while.

But that may pose a problem for going it alone. Would Sanofi and Bayer/Onyx be very happy if they hold the SOC with Bavi and then see the generics make the money? No, for sure not. So they may have an interest to slow down the Bavi program OR become the entity that owns Bavituximab.

It is different for BMY, Merck, Roche and AstraZ because they have anti-YXZ in their programs, and Pfizer has them now indirectly via Merck. Those new immuno-oncology drugs are new and still for long under IP protection. But new drugs are expensive and in certain parts of the world good old Docetaxel or Sorafenib generics plus Bavituximab may therefore continue to be subscribed.

In going it alone it becomes clear that no matter how you lay the puzzle you have Bavituximab in every combination. With the original Chemo and Radio therapy drugs as well as with their generics but also with the new original immuno-oncology drugs.

It also shows that the more a BP covers the field in providing all of the above, the more they can compete on all fronts and the more they have to win in owning Bavituximab. It also shows that NON of them can afford or take the strategic risk NOT to combine with Bavi. That not only because of the need to combine with Bavi to keep the SOC for the conditions they compete in but also because there is going to be a fight for dominance of treatment type chemo/radio vs immuno.

The BPs, with their lobbying machines, are aware since long that their patent expirations were going to form a problem. They knew since long that they would have to come up with new and better solutions based on new IP to be able to continue their lucrative business. So you can understand that they will do EVERYTHING in their power to try to shift the treatment market into immuno-oncology. That would virtually place the generics on the side line in oncology treatment.

Is that difficult and what does it have to do with PPHM going it alone? Well the best way for BP would be to lobby that it is not ethical for Doctors to prescribe treatments that perform 25% or more less good then the SOC in place. As we will see soon that will in ALL cases put chemo therapy out of the game when the immuno-oncology drug gradually will become SOC. Furthermore it is a political gratifying message to bring to the public, so it will not be that difficult to push at that time.

Chemo+BAVI may still make it because those combinations will be close to anti-XYZ alone. But anti-XYZ with Bavi would play them out of the field in a single draw. So BP's now suddenly have incentives to place the SOC at high standards with anti-XYZ+Bavi combinations for which all IP is intact for many years. So doing they would ALSO short cut Generics+Bavituximab and that will be the BINGO. That is the point were the cash starts flowing into their new drugs.

For PPHM this is golden business because Bavituximab does increase survival by 25% hands down. In our PIII NSCLC we go for 50% and I am sure we will almost NEVER go for less then 25% increase. So there would be no option to administer an anti-XYZ alone, the more that the anti-XYZ suffer from severe side effects which Bavi can mild by activating the immune system resulting in clean-up and repair. Certainly for inflammation, the main cause of those side effects, this is important, and Bavi does impact the dendritic cells as well as the macrophages, so we are good.

Here BP and PPHM have common grounds because this is a feasible WIN-WIN scenario for BOTH of them and it would allow PPHM to go it alone. Even more, the BP's would now have an intrest that NONE of them owns Bavituximab. PPHM's Bavituximab would be in the treatment cocktail just by making the SOC because also ALL non-SOC holders that ARE within 25% of the SOC will need Bavi if Bavi is in the SOC to stay within that 25% range. So no marketing or sales needed at all by PPHM. What about them apples.

But the even greater news is for the patients. Patient at that point are ALWAYS sure they get the BEST treatments and the lasting immune effects that Bavituximab seems to expose (a little early because more on this has to come) would for sure be worth the extra price. Actually if humanity is lucky Bavituximab will make 2nd ln treatments disappear for Oncology. If you got Bavi in first line treatment and the observations about lasting immuno effect for a same cancer would be confirmed then you will not see it re-surface. In worst case an "after treatment" of Bavi alone may do the trick. And this is no wishful dreaming! After all all mice died from old age, so said Dr. Brekken.

It looks to me that in such scenario and possibly many others, PPHM could go it alone without any problem while being friends with everybody.