Avid Bioservices Inc (CDMO)

[Protector]

JamesGMS, this is how I see it.

1) PPHM needs SOMEONE but not a PARTICULAR SOMEONE. At this moment we all think AstraZeneca and they are for sure well placed compared to the others BUT from the pure theoretical side of things ANY BP holding a I-O program with the CURRENTLY successful anti-bodies (PD-1/PD-LA and CTLA-4) which are at least BMY, Merk, Roche and AstraZeneca with a portfolio of multiple of them will do. This makes PPHM position some more luxury the needing a PARTICULAR party.

2) BMY and Merck. They have approved PD/CTLA anti's, they generate revenue and fight each other. Some Jimmy Carter, some UK deals, some TV commercial program, and a lawsuit from BMY to Merck. BMY will NOT hesitate to sew whatever BP that gets approved for anti-bodies it hold patents for even if they know there is NO infringement. BMY just wants to scare of potential COMBO partners from teaming up with Merck because all named BP's and others (e.g. Novartis) know the next round is called I-O COMBO's. But for now BMY and Merck are the CLEAR winners of round one I-O MONO-THERAPY.

3) Roche and AstraZeneca. They both need to make some fast and bald moves if they ever want to catch up with BMY and Merck. The FDA doesn't see there 'me to' PD/CTLA programs as urgent any more and Accelerated Review and stuff that they may forget for conditions where they others are approved. So they need players like PPHM more then BMY and Merck (for now). AstraZeneca for sure they have stopped I-O MONO-THERAPY altogheter (which I think was a smart move) and PRed it (which was not such smart move because it attracts the others attention on the urgency of getting their hands on antibodies and AZ will have to compete for them. But possibly that PR could not be avoided under SEC rules). Roche and AstraZeneca will fight each other to get the drug that puts them back on track but BMY and Merck will certainly not sit at the side line.

So PPHM is such a company with Bavituximab and I-O Drug with the most promising profile ever. In chemo it has great value as clinical trials have proven (even if not approved due to how end-points are calculated) but in I-O it has MUCH bigger assets in its pocket.

In I-O Bavituximab does something it does NOT with chemo...IT CAN BOOST REVENUE of BP drugs based on PD/CTLA two to three times. With chemo the boosting was good for patients but not one single BP would have cashed on it due to the existence of the many generic versions of those popular chemo drugs. So why would you want to partner with PPHM in chem. Why would you even want to facilitate distribution UNLESS PPHM gives you a BIG part of the enchilada. Furthermore NO COMPETITION between BP's for that.

In I-O that is something different. If Merck would sign a deal with PPHM for Bavi then Merck can reach two to three times more responders then BMY. And BMY would have to BEAT that SOC, something they CANNOT this time do with a product they have IN-HOUSE.

And that is where the strategic difference is in all this. As long as these BP can solve things with what they have on their shelves (their PD, CTLA etc) they are NEVER in need and you are NEVER in any negotiation position holding any leverage.

But ones you have something that would catapult ONE of them into space then EXCLUSIVITY (even for a LIMITED amount of time) is worth GOLD for them. Because no matter how you turn it, BP's are not friends. The Transcelerate initiative may let believe that but I see them rather use it to keep drugs from the market rather then allowing one of them to get one approved before the others.

SO AstraZeneca needs PPHM more then PPHM needs AstraZeneca BUT not more then PPHM needs A partner. And since for PPHM the clock is ticking and AstraZeneca is 'in-house' with PPHM and both claim they get well along with each other, I hope that from THEIR PERSPECTIVE they realize that in this MOMENTUM they BOTH NEED each other EQUALLY HARD but that PPHM has more choice.

Last post for today, have sleep catch up to do.