I just discussed a # of subjects with Stephanie Diaz from IR today. She was forthright with the information she had. She understands the current frustration of shareholders and indicated that she is willing to provide answers as she gets information. I found her forthright and I felt she was honest and I don't know if she shed any further light on the situation but I appreciated her taking the time to answer questions. The questions are below. It may provide a more definitive view of the company's perspective but likely nothing new in terms of information.
1. Why was there not a contingency plan ready if sunrise failed? Stephanie indicated that they are not a one trick pony. They have many opportunities with Bavi beyond Sunrise which represented just one of the many opportunities. In essence they feel they did have contingency plans in place working with MSK, NCCN AZN I/O combinations. They have tapped into the best of the best when it comes to studying bavi in combination studies and feel they have positioned this biologic for future success. I pushed back by saying that Sunrise was the most prolific trial in the history of the company. They seemingly made a conscious choice to go it alone and because of that compromised this phase 3 trial which represented more immediate success for long term shareholders -- and starting down the I/O combination road represented to a certain extent starting over. Because of that we are concerned about further massive dilution and want them to do everything possible to ensure the burn rate stays at a minimum while they look for ways of quickly financing the I/O combination trials with a focus on partnering or if necessary outright sale of the company.
2. When can the stockholders expect an updated plan dealing with the current challenges? She felt the plan was in place and transparent. They were putting chemo on hold, completing the gathering of information from the remaining participants in the sunrise trial, ramping up avid with 3 times current capacity available and focusing their efforts on the I/O combination space that shows promise. Garnick is fully on board working to understand what happened in the Sunrise trial. I asked about a potential BLA. She indicated she has heard nothing about that. I indicated that with the share price going down shareholders want more updated information on costs and future direction of the company. The concern is we return to status quo with no sense of urgency, tough decisions not being made -- leading to another reverse split or further excessive dilution. She indicated they are doing everything possible to ensure they can keep dilution to a minimum while they work to correct this situation. I indicated that they aren’t sending the right signals to wall street thus the share price continues to tank. They could provide more updated information on the successes they are seeing with avid growth and how well they are doing keeping the burn rate down to a minimum. They could possibly purchase shares on the open market and bring more biotech experience to the board and management team. These are the right signals that will only help establish some confidence with current and future investors. They can do much of this starting immediately. She said she understood.
3. What actions are being taken to ensure this company is minimizing costs? Stopped chemo. She has not heard of any other specifics. They are still trying to juggle a number of balls and they need the resources to do so. I reminded her that current shareholders expect they do so responsibly and not burn through cash reserves without any forethought. I stressed this to be critical to current shareholders. We don’t want another round of massive dilution. That will not be acceptable.
4. Are corporate officials taking a pay cut during this challenging time? If not how does the BOD and management justify maintaining such high salaries with the historically pitiful stock performance under their guidance? No pay cuts that she has heard of. I left it at that.
5. Will we be updated on the results found in the failed sunrise trial specifically concerning what caused the unusual control arm performance and will there be any updates concerning the specific performance of bavi? If so when will we be updated. She says they are thinking of publishing all the data when it is complete. She expects it will be complete mid-summer but that was a guesstimate. She also reminded me that other biotech's have had the same problem with the control arm outperforming historical data. It is not just PPHM's trial that was affected. I indicated all the more reason to partner.
6. What is the current status of the AZN relationship noting that AZN is taking a more selective approach to M&A and yet focusing on oncology? Data from sunrise is being collected and AZN will be privy to this data. They are working cooperatively together to determine direction. She indicated they had some human data to share in combination with PDL1 and they are using everything they have to bring in resources in form of a partnership. I didn't quite get what she meant here in terms of human data. She indicated that it is a tough process and in her experience takes time to develop. I reminded how much time has gone by to date. She assured me it is a priority.
If you feel you have other questions feel free to contact her. I did my best in documenting what she said so as to share the company perspective with suffering shareholders.
