Avid Bioservices Inc (CDMO)

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PPHM SUNRISE 2013-2016

There are 4 more full trading days left. All pro-trading PPHM positions that are not already closed will be closed by Friday's close and this as well long as short.

Only PPHM investments and hedged long/short positions will be carried over year end (except for firms having a non JAN-DEC FY, they may deviate).

SUNRISE 31th DEC 2013 - 31th DEC 2015 - 31th DEC 2016
Our undisputed most important clinical trial all times is SUNRISE. We doubted and some had fun with it when end DEC 2013 we didn't see it announced and CEO King was loaded with all sins of Israel UNTIL at the very last days SUNRISE was started as said - before year end.

Now again this happened and PPHM was not going to be able to enrol in time, UNTIL last Quarterly/CC PPHM announced it has enrolled the needed patients to finish the clinical trial. And of course time to have some fun again because they added that they would still enrol the remaining ones the next weeks. And so pro-actively CEO King gets bashed UNTIL in January we would get a PR telling us they fully enrolled SUNRISE in DEC 2015.

Anyway, at this point a LARGE PART of the SUNRISE risk is gone. The risk of not finding and opening the 161 treatment centres as well as the risk for those centres not to be able to enrol the needed patients in time to stay on track. With that disappears the large chunk of financial risk since only a handful of patients (those enrolled at the end) must still receive their treatment and we have plenty of cash to finance that.

This means that the remaining SUNRISE risk is now of SCIENTIFIC nature, namely the trial results. We can exclude safety from that risk because we have sufficiently patients treated with bavituximab before SUNRISE and we didn't in TWO YEARS now and on at least 90% of 582 patients not get any warnings from the IDMC that SUNRISE should be stopped.

So everything will play around reaching the end-points in a statistical significant way. All other possible events along the road, such as 1st and 2nd look-ins, early stop, priority preview etc are nice to have or get but if we focus on unblinding in DEC 2016 (12 months max) then we'll have results in H1/2017 in the worst case. Every month the trial stops earlier can be subtracted from that.

While the PPHM PPS appreciation started smoothly, and IMO in a solid steady way, it will have sudden peaks and dips on news but in general continue a steady climb. 1st and 2nd look-ins, even if the IDMC just advises CONTINUE, will support that climb. In the end a FUTILITY advice would be the only possible bad news because it would say: Stop because it is not going to happen.

So CONTINUE on the look-ins is a risk reducer. It doesn't say much about the end results because all depends when separation happens. However, the MOMENT of the look-ins is telling us something. We know for sure that MORE THEN 90% of the patients were enrolled last quarterly and so their clock is ticking.

NOTE: MORE THEN can mean 90.10% as well as 99.10% but the fact that PPHM at last quarterly anticipated to enrol the remaining ones in the 'coming weeks' makes me believe it is closer to 100% then 90% because PPHM knows that the PR (if they PR it again after last Quarterly information) would in all cases give us a good handle into that estimation.

So if we exclude abnormalities (such as 1st ln NSCLC PII where the control arm outperformed ALL historical control arms BIG TIME and has beaten the SOC (itself) just as did the Bavituximab arm, rendering the results unusable for PPHM) then Herbst et al. 2010 should give us a good basis to understand why PPHM positioned the 1st look-in in Q1 2016 and the 2nd look-in at MID 2016. Several posters have offered simulations but lets just stick with what PPHM has itself suggested last quarterly.

So somewhere in Q1/2016 the PPHM PPS should get additional support from a CONTINUE advise which from the beginning was anticipated by the investors community. For the 2nd look-in our expectations might be a little higher in that PPHM itself has not excluded an early STOP. If that would happen the PPS will make a JUMP. However I am NOT convinced that PPHM would STOP the trial given the SOC has been improved for PART of the 2nd ln NSCLC population. PPHM might tell us about the advice and at the same time say they are going after a MUCH higher score. Wall Street would LOVE that because the better the results the more difficult to dislocate the new SOC from its position. Furthermore that advice would kind of tell Wall Street, RISK MAINLY GONE. We'd see that in the PPS immediately.

IMO, and those that know exactly WHAT level of information detail PPHM would receive in case of such early stop advice can correct, PPHM will receive information on the scores in relation to the end-points. It would otherwise be a TRAPPY situation that an IDMC can give a STOP advice that would lead to non FDA approval because on full disclosure the end-points were not reached while they would have if the trial would be run to the end. Corruption can sit in all corners and an at first glance GOOD ADVICE can turn out to be a more sophisticated DEATH SHOT.

So PPHM will have to be very careful given we have at least 3 (and possible 4 given PACER mentioned viral clinical trials at CSM too) of our clinical trial with events that were CLEARLY in the disadvantage of PPHM and ALL in a DIFFERENT WAYS!

- 1st ln NSCLC control arm set's new SOC on itself equal to the SUPER Bavituximab results.

- Pancreatic trial sees the large and disproportional sickest patients population randomized in the Bavituximab arm (and the Bavi arm STILL has beaten the SOC but only with two weeks).

- 2nd ln NSCLC that was sabotaged with a dose switching on a registration al trial that could have set Bavituximab in commercial production rather then having to run SUNRISE. A sabotage that was EXTREMELY unfavourable for the Bavituximab arms, yet still yielded super 60% SOC improvement (conservative) and 113% SOC improvement and statistical significant in reality. And one that crossed CEO King's statement that we expected to have a commercial product in 2012.

So the next thing, if any, will be something more sophisticated and what better way then to hide it in an at first view POSITIVE event such as an EARLY STOP advice of a look-in. There is not much needed to have a hand into a IDMC. I am not saying this is going to happen, just that it could, and that PPHM needs to make sure that every move they make is on SOLID GROUND.

So 2016 is going to be a movemented year for PPHM. We will see at least one quarter Avid II production and should therefore close a RECORD year in revenue, very possibly due to a last RECORD quarter. And since Avid II was announced and up and running in the SAME year, I think that Avid III (for which the complete set-up scenario is very certainly documented from the AVID II set-up) will be there MUCH quicker. They disclosed the Avid III idea last quarterly so depending on when they give the green light we may see a facility opened in Q3 2016 which would nicely fit SUNRISE timing. All that will also support the underside of the PPS.

So except for all other things that are going on, I think that the above alone would suffice to make a good year for PPHM but they'll need to be careful.