Innovation Pharmaceuticals Inc (IPIX)

[BioHedge]

July and August are dead months. We'll be lucky to get results in August but more likely in September and a deal shortly thereafter (by the end of the year) if data is compelling.

Sit back and enjoy the final 30 days of Summer and look forward to College Football kickoff and Prurisol IIb results. I guarantee there won't be much action before the end of August, even high powered execs and staffers have lives (and families). That said, The window is closing quickly on the short and distort crowd and I expect the news, to be good.

If P IIb is slightly less effective than Otezla there is still a market because as we've seen with Otezla an oral treatment is a hot item even if it's only semi-efficacious. If P matches Otezal then it's a 2-3B+ drug if it's better... then let the bidding begin.

Based on what we've seen in the per-clinical work and other trials, I put a 10% chance of total failure, a 20% chance we don't beat Otezla and 60% chance we're equal to or slightly better and a 10% chance we're significantly better. Given my projections, I believe we have a 90% chance of an outcome that will lead to a deal and money in the bank (70% chance of a significant deal).

For $.90/share the upside is significantly higher than the downside. I might loose 50% of my money if we see failure (and that assumes I sell) but I have the opportunity to make 10x if P works. It's an attractive risk vs reward scenario for this class of asset and in fact I've not seen a better play in the public markets.