Good Afternoon to All,
As long as it's a quiet Sunday I'd like to begin by thanking the board for all the good feedback on blogs I have written. I know that everyone may not agree with all the positions taken but, am glad that this board gave those arguments a fair hearing and hope that those same arguments were helpful. I am a great believer in "civility". I can tell you with certainty that lack of civility has cost this board some extremely valuable posters. I know because I still correspond with them.
Stoneroad---
In your response to questions about my remarks---(post 336)
you continue IMO to become increasingly sophisticated in your posting. Dr. Wolchok is "the man". He is responsible for a lot of the testing and proof on the existing FDA approved immuno therapy drugs. My sources at MSK say the good doctor speaks with the authority of a godlike figure and my sources are good.
MH----
There is an analogy hanging around this board that the PS/bavi platform is similar to the "Manhattan Project" that developed the atomic bomb. I think this analogy was first posited by MH. IMO there is real merit to this analogy only I would take it further and be more specific. The Manhattan Project and the building of Oak Ridge and the Nevada test sites was a monumental undertaking requiring huge resources that were "war scarce". The Roosevelt admin would not commit to the project until "the man"-- Albert Einstein-- sent a letter endorsing the feasibility of the project which was based on his work. (when you see that mushroom cloud you know that indeed E=mc 2)
In the immuno oncology world Dr. Wolchok is "The Man".
Were Dr.Wolchok ever to publicly acknowledge the PS pathway as primary in the immuno cascade and then link that pathway to Bavi and PPHM as the only patented mab in late stage human clinicals accessing that pathway, then I think PPHM would quickly be 5-8 dollars a share. The reasoning would be that "investors" could instantly see PPHM as a target for combos with existing drugs and as a target for multiple big pharma bidding. In addition, investors know Dr. Wolchok has the "advisory power" to move BP strategic thinking and the attention of the "analytic" community. That is IMO only, but, my opinion is fairly well educated in this area. (BTW $5-8/ share only takes you to fair comp value)
Of course, that is a big "if". I have no idea whether Dr. Wolchok would ever make such a statement or in what forum or in what time frame. However, it's a lot like one of my favorite jokes-- "Even a blind pig finds a truffle now and then, but, it helps to know that truffles grow in the deepest , darkest part of the forest".
When PPHM (the blind pig in this analogy) is playing with Dr. Wolchok and his lab---THEY ARE IN THE DEEPEST, DARKEST PART OF THE FOREST---and therefore have a chance to get lucky.
Heads up on something additional. My understanding is that the NYAS has secured Dr. Wolchok as a keynote speaker in a 1st quarter meeting. It will afford fellow scientists a chance not only to listen to him but also to question him. It is my hope that members of this board will be able to learn a lot from this session.
IMO there are a number of scientists working on publications about this PS pathway. Again IMOO, it is only logical that sooner or later someone is going to link PS to Bavi and then to PPHM and--- eventually--- to the "massive patent advantage" PPHM has in this area.. Im sure you have all noticed how nobody ever makes this link----as of yet. It is uncertain which group will conclude first. If I had my druthers, of course, I'd always choose Dr. Wolchok but, who knows with these guys and who knows how long it takes for peer review. (Thank goodness for the huge lead provided by Dr. Thorpe and his apostle in the patent area Shelley Fussey)
Position--
By nature I could never be a "basher". I would simply put my energies elsewhere if PPHM were not of interest. In addition, being a short or short trader seems to me simply to be against the laws of mathematics/ risk/reward. However, neither can I afford to be a starry eyed booster of PPHM with a "my mgmt right or wrong" type of attitude. I have to fit into that third category of long term investor with a "substantial" position that looks at that position every day with zero based logic. I can not afford to delude myself about PPHM mgmt. As long as I feel this is the best use for a percentage of aggressive funds, the best risk/reward I can get for the money---then I stay long. I am much more concerned with increase in underlying value than I am with price. I don't worry too much about a nickle or dime up or a nickle or dime down. IMO sooner or later price will catch up with value on a catalytic event.
Recent Funding--
I grade PPHM mgmt a (d-) on the recent funding--barely passing. They pass because they raised some needed funding to move forward on their clinicals, they put it in strong hands where the stock is not likely to come back on the open market, and it was a "clean" funding without fees. The reason I give it a barely passing grade is that anyone on this board could have sold plain vanilla common stock at $1.08 Ask yourself why we are paying this mgmt team millions of dollars for something any of us could do??????????????????????
Some people say debt is not doable. I know they are wrong. PPHM mgmt themselves would tell you they are open to debt if they can get the covenants right ie, no encumbrance of IP and no overly restrictive covenants. Debt is the cheapest it has ever been in our lifetime so, not to use a modest amount of debt when you have increasing positive cash flow to service the interest is a mistake. That is why you pay mgmt millions of dollars---to get those covenants right. (As an example our collaborative partner AZN just this week chose to issue 6 Billion (with a capital B) of debt rather that dilute what they feel is a promising future price on their equity.)
Or--PPHM could have sold Dart Preferred Stock for one third the dilution. Heck, Dart is already buying Preferred stock. If they had to give him a sweetener then so be it. I mean what the heck did they authorize all those new cap shares for if not to back modest amounts of preferred. Mgmt could have done this 20mm raise through sale of common without additional cap.
Instead, PPHM chose to sell approx 9% of your company on an after deal basis for $20mm. Imagine that. They just sold 9% of your company for 20mm. The worst part of that sale is that they still do not know how to promote their stock after all these years with what is arguably the best story in all biotech. When PPHM lacked expertise in regulatory matters they went out an got the best regulatory authority in the world to work with them. Any management smart enough to do that should be smart enough to go out and get the best promotional people in the world especially if they intend to sell equity. For that reason, I give this financing a D minus.
The only ray of light I see in this is that sources tell me that the new PR people (Stephanie Diaz and Vida Strategic Partners) are good promotional people. We will have to see over time which institutions they can effectively introduce to PPHM. I measure this in very hard numbers. Just watch the percentage of institutional ownership incl of Eastern Capital. If that number were to move north of 50% I would view it very positively.
MD1225 (Chris)
You have to like Chris. However, purely as an investor I would give his last piece a (C minus/ A). I give him a C minus because it was largely a cut and paste piece that didn't tell us anything we didn't already know. His reference to a "slowing rate of dilution" is a paraphrase of something I wrote earlier. It was true when I wrote it but less so now after the recent financing.
I give him an "A" for aggressiveness, for dealing with the editorial board of SA, for writing in clear English, for promoting to a broader audience including numerous institutions, and for stepping into the promotional void left by PPHM mgmt. I now understand that this is just an interim article and Chris is still waiting for a full enrollment PR to fire off his main article. In the article that is forthcoming I hope to learn a lot of new things.
Biopharm, Hutschi, CP
You guys are really tireless researchers and speculative thinkers. I really appreciate your efforts and can cull out what I think is useful from the huge mass of material you guys present.
CP presents a perfect example for "culling" through "mass" of data to find some good ideas. The way I do this is really simple. The first thing I do is throw out anything he writes related to dilution. This is just not his forte IMO and I already have a serious understanding of this subject. HOWEVER, IF YOU REALLY WANT TO UNDERSTAND WHY PPHM HAS A HUGE PERCENTAGE ADVANTAGE (98%+ in his opinion) IN THE PHASE III SUNRISE TRIAL, go back and reread everything he has written on this subject and on the PH II results leading to this trial. This is very fine work.
On Timing
I expect PPHM to be late on everything. They always are. It is much more important to me that they get to their goal than that they do it in precisely the time frame they lay out. They are not good at close timing. As exhibit A they are late on opening Avid II. Avid II is such a complex undertaking, requiring FDA certification, nobody could get the timing precisely right. However, when it does eventually open it will triple the size of our manufacturing facilities and much more than triple the capacity to manufacture. IMO there should be a continual upward trend in revenue projections and positive cash flow for years to come and that is what is important to me.
Ditto on Sunrise enrollment. If Sunrise enrollment completes give or take a few weeks on either side of year end it matters much less to me than that it is "properly" enrolled. The end result is what is important not the close timing.
In the words of Warren Buffett--"I'd rather be generally right than precisely wrong".
On Ray Birge
Dr. Birge is a first rate clinical researcher running a lab at Rutgers and before that coming out of Rockefeller University in Manhattan. Quietly, in a zero promoted scientific talk, Dr. Birge says his work indicates that PS is a Global Immuno Checkpoint. This is exactly what was said by SK a couple of months back. To date it was the proverbial tree that "falls in the forest with nobody to hear it". Dr. Birge pretty much stuck to just PS without any further linkage. IMO this was as it should be under his MTA and NDA. Nevertheless, the implications of this statement are profound. I look forward to further work by Dr. Birge where he is less constrained.
Have a good evening and be of good spirit. The weight of the scientific argument is moving in PPHMs' favor.
Condolences to our French allies and the people of Paris and to all freedom loving people. Again, "close timing" is impossible to predict, but, it is more important to know that the day of reckoning will come.
Best Regards,
RRdog
