Avid Bioservices Inc (CDMO)

[Protector]

PPHM's Update PR

1) PPHM stops all PII and PIII clinical trials that where running or about to start. They keep following the DATA coming out of SUNRISE and they did NOT close the Doce+Bavi study. Consequences:
- burn rate goes drastically DOWN (good)
- chemo probably out (good long term not good short term revenue)
- focus on I-O (good)
- delays to market (not good)

2) AstraZeneca PII is a PII hence will not be started (NSCLC). And as I predicted (see my posts in the period after SUNRISE stop) the AZ collaborations will now focus on what AZ is there for: I-O. The PI for MULTIPLE-SOLID tumours was the OTHER AZ clinical trial Durv+Bavi and that will, IMO, be extended to more then Lung, Breast and one or two others. I think the door is open for possible 5-10 solid cancers AT ONCE. Consequences:
- clinical trial cost DOWN dramatically because AZ pays for all Durvalumab (about halve of the cost otherwise according PPHM).
- focus on I-O with AZ pushing and keeping PPHM on track
- possibly PII/PIII not by PPHM themselves

3) Collaborations. We can no AGAIN do away with all the crap on here of collaborators leaving etc and PPHM no telling or not explicitly saying etc. Could they have been more EXPLICIT then with their PR. Collaborators that were public clearly fit in TWO categories : AstraZeneca and NCCN to run trials and Memorial Sloan Kettering to combine Bavituximab with all kinds of other candidate combo's. And they maintain what was said on the last Q/CC about MSK having seen exciting things and now added that we will get results on conferences (which was new). Furthermore they clearly anticipate 'future' collaborators so there is more to come. And more collaborators is a NO-NO if there was something wrong with Bavituximab so again SUNRISE had NO significance in that area. The control arm did something abnormal, that is all, not Bavi.

4) I also have the feeling (as in FEELING) from what I read that PPHM might not visit the PIII road any more as they did with chemo. I think that if real exciting things are seen by MSK that we will see PPHM use other paths such as BTD requests on pre-clinical + PI and backed with all the past data to support the safety profile. Based on that I keep my 1 year delay. If we first expected Bavi on the market H2 2017 then I think H2 2018 is possible given the above and assuming for a moment that Dr. Garnick is not perusing any BLA for Doce/Chemo.

5) Avid is great. What can I say. The PR talks FIRST of Avid then rest. Avid III in the make, and with the experience they have this might go faster then the provided dates. Avid is a strong keep in difficult times and a 56Mil$ backlog is impressive. Even without Avid II PPHM forecasts above 50Mil$ for this FY compared to 40$ for past FY. Remember that we were at merely 15-25Mil$ before that.

6) PPS. Well this road may bring partners (in the real sense of the word since we differentiated with collaborators) direction PPHM. They are no longer disruptive. The Avid move is great and at this tempo they are moving rapidly towards a 100Mil$ revenue company with huge margins. Add to that the reduced burn rate and still 61Mil$ cash on the bank and I think this company is largely undervalued based on book value alone. (Not even considering IP, pipelines, etc).

CONCLUSION
PPHM eats up some commodity that some don't have and that others would prefer not to have to invest in. TIME. That fits what was predicted after SUNRISE. Next PPHM goes I-O, the wise choice IMO, which is partially the reason for the TIME thing. Collaborators all ON BOARD, burn rate down, price clinical trials down, 61Mil$ on the bank, Bavituximab intact, IP and pipelines still owned unencumbered, steady and growing revenue from Avid.

I think they have a stage here to this time, with AZ and other collaborators/partners, bring Bavituximab to market where it should be. AIMO.