Avid Bioservices Inc (CDMO)

[Protector]

There is no such thing as ...!

This week-end at a dinner someone that is invested in PPHM since about 2 years now (i introduced PPHM to him) asked me what, given the recent evolutions and the clear interest of the biotech/pharma industry in Bavituximab, PPHM would be worth. The guy is a mathematician, and he is probably reading this :), so i spoke to him in equations :)

Consider GOLD vs Bavituximab. We say a company "Goldig" found a gold mine and it is the last gold on Earth but they didn't start extraction at commercial tempo yet. They and only they have access to it and the mine is of huge size. This is like Bavituximab, PPHM is the only that is allowed to make it and they can make as much of it as they want, but they didn't start commercial production yet.

So in principle the market demand and market price of both will drive PPHM's and Goldig's value because if the market doesn't want or needs any gold or bavi they both become worthless.

Now CP Enterprises want to buy the companies. What are they worth? I, as the CEO of the acquirer would love some simple valuation based market cap (nice for me, market prices can be manipulated via the exchanges and I have the pocket depth). But that will not fly, PPHM/Goldig and their shareholders know that too and they know they have the Gold/Bavi exclusivity. No other way for me to turn.

So I try a more traditional X times A + Y times B = ... Good for me, both companies have no, or almost no, turnover, sales and profits so that is going to be cheap. But of course those companies do again know that too and will again no let this fly. They have poison pills and BoDs that are determined to trigger it if needed and allowed, so no way to force their hands.

So that will bring us back to valuation on weighted POTENTIAL. Now for the gold mine it is simple. How big is the mine, what is the extraction cost and what is the average demand for gold on a yearly basis and you can plot a curve and start negotiating from there. So this is where the comparison ends because for Bavituximab that LIMIT of mine-size does NOT exist. PPHM can produce as much as they want as long as they can distil water and find the needed ingredients (and there is nothing in bavituximab that is hard to find or scares).

So market demand will be the limiting factor because there is nothing you cannot produce if the demand is there. You extend.

So, our problem has been simplified for know to: What are the markets to which PPHM can sell Bavituximab, what do they represent in dollars (value) and what % will PPHM be able to capture from those markets.

Now their values = a lot of look-up and research to make a complete table but we know that we are talking about multi-billion markets (only oncology was said to be 20/30Bil/yearly in a few years from now i believe). And for the 3rd question, well it will answer itself if i try to answer the first one.

In, "What are the markets to which PPHM can sell Bavituximab" we start by simplifying the definition of Bavi. Remember that we are mapping a POTENTIAL of what bavituximab could be worth not an EXACT valuation because we CANNOT.

Bavituximab is a substance that binds PS when PS becomes exposed and is present in the bloodstream (excludes BetaBodies that do not need blood but lets not complicate things). And from PS we know that it binds macrophages and Dendric cells and so doing suppresses their signalling to the immune system and keep the immune system from activating. And finally from the immune system we know that it detects, evacuates, repairs damaged cells and cell material as well as non body own cells and that if it doesn't do that we get sick and even eventually die in some cases such as cancers or viral infections for instance.

Synthesized: Bavituximab keeps PS from suppressing the immune system activation.

So now we can move to extra-cellular PS rich environments to have an idea what the potential markets are where Bavituximab could play a role.

- There is no such thing as CELL DAMAGE without PS EXPOSURE
- There is no such thing as a CANCER without CELL DAMAGE
- There is no such thing as CHEMO THERAPY without CELL DAMAGE
- There is no such thing as RADIO THERAPY without CELL DAMAGE
- There is no such thing as IMMUNO THERAPY without UNCLOAKING CELL DAMAGE
- There is no such thing as APPOPTOSIS (cell death) without PS FLIPPING
- There is no such thing as PHYSICAL INJURY without CELL DAMAGE
- There is no such thing as INTERNAL SURGERY without CELL DAMAGE
- There is no such thing as AESTHETIC SURGERY without CELL DAMAGE
- There is no such thing as an ULCER without CELL DAMAGE
- There is no such thing as an LIPO-SUCTION without CELL DAMAGE
- There is no such thing as an PROSTATE SCRAPING without CELL DAMAGE
- There is no such thing as an INFLAMMATION without CELL DAMAGE
- There is no such thing as POISONING without CELL DAMAGE
- There is no such thing as a VIRAL INFECTION without CELL DAMAGE
- There is no such thing as a PS-TAGGED VIRUS after CELL PENETRATION
- There is no such thing as a BRAIN BLOOD BARRIER without PS MEDIATION
- There is no such thing as a BLOODSTREAM without PS from FOOD INTAKE

So in fact, while PS was thought of being confined to the CELL because that is the only place, except in the brain-blood barrier, where it naturally occurs we see know that so many cases exists where it gets exposed and has the negative side effect to suppress the immune system, what it was evolutionarily supposed to do to avoid a systemic immune reactions each time our body cells die a natural death (which is DAILY and MASSIVELY). PS exposure gets ABUSED by tumours, viruses, etc to proliferate and flourish by staying hidden to the immune system. And this is true for humans but also for animal.

So the markets where BAVITUXIMAB can be potentially used are ALL MARKETS where PS is exposed as a SIDE EFFECT of the condition that must be treated or the incident that occurred (accident, battle wound, etc).

Besides that biomarkers, digital imaging are diagnostic applications. That are huge markets on there own because also all people/animals that pass true a diagnostic procedure and are NOT sick make that cash register tick.

Also the prevention markets such as vaccines, certainly now that for Bavituximab it became clear that it has a remaining effect and immune response has now been mentioned several times, are huge markets on their own.

So the markets are broad, huge in dollar size, global and EVERYONE when they are sick wants the BEST CARE with the LOWEST RISK and the HIGHEST PERSONAL COMFORT within AFFORDABLE boundaries. So Bavituximab will, a term that CEO King ones used, become a house brand in Medicine. Whatever you treat that exposes PS and where you want to protect the patients from infections, expedite the repair/cure or force detection of damage you'll add some Bavituximab. In some cases in cycles of x -weeks, in other possibly only a single or a few times (e.g. Pre and post surgery infection prevention).

But believe me, everyone that will want to acquire PPHM will want to IGNORE the above under the motto: It hasn't been proven YET.

I'd say, well then don't acquire us and wait until it is proven. But that doesn't fly either because THEY KNOW the potential is there and they WANT IT BEFORE it is proven. And that is where the price mark is made.

WHAT IS THE GOAL OF THE ACQUISITION WORTH. Is it purely digging the gold and sell it as a commodity, or is it being the only one having gold and only sell Jewellery made of gold at the highly leveraged price due to design and combinations with diamonds and other precious stones (the DOWNSTREAM anti-PD-1/L1, anti-CTLA-4, ...).

And that LAST thing you can only do if you have the one and only gold mine. So suddenly the potential of Bavituximab EXTENDS into leverageing the diamonds and other stones which CANNOT be done by those that don't have access to it.

Now if you would have a diamonds and precious stone business would you like to have the only gold mine on Earth?