Wook,
"Thanks ss....the plan I heard was "new" molecules. Avid would get rights through help in developing promising IP. "
Yep, that was the plan. Prior to Ronin, the guys wanted to talk about "antibody development library" and filling it out. Thing I didn't get, was offering antibody development at discounted rates and providing regulatory filing help in exchange for a royalty on successful drug launches seems like a nice strategy - for an established, money producing powerhouse. It doesn't seem like a good strategy for a cash strapped, ATM powerhouse. That is of course unless your compensation isn't tied to near term success.
Funny thing, even though I was excited about the exosome "liquid biopsy" possibilities, management never mentioned this much. Why? Not real? Delayed? I don't know. But "antibody library build-out's" a big thing?
Anyway, maybe Avid can get properly capitalized and pursue your "new" molecules and rights via help in developing promising IP strategy if it's unhinged from the R&D burden. Pretty sure the strategy was driven by Garnick and friends. With the new board members, I'd feel better about it as it will be vetted by others in the industry. Been my problem for years - needed additional strategy oversight. I complained about it without success. But we are where we are.
Since I'm making the effort, let me offer a few opinions. Since Ronin launched, I've not made an effort to talk with PPHM or Ronin. It's all PR bs at best with each party selling their talking points. I've watched several of these in the past. Many things can happen and they can take many tacts. But here's what I believe:
1. Ronin launched knowing how to value and run the Avid business. They also knew, probably as much as most of us, about the possibilities of anti-PS, exosomes, etc. I'm sure they did due diligence. But, what do they/we actually know? That JB sabotaged us for some reason? That several trials have all failed to show efficacy versus a control? And said controls all seemed to be better than historical? That laboratory results seemed to point to theoretical MOA's that seem highly beneficial to many possible diseases and drug treatment programs? That exosome testing might be able to cheaply and quickly identify early stage cancers? Etc., etc., etc. Would be nice to really know what PPHM scientists and management knows about these possible benefits and questions - wouldn't it? But, we never get that info - the annual posters aside. So, we're left to theorize and even argue based on guesses and assumptions. Makes for a lively chat board. Doesn't make for a healthy investment environment. And, doesn't provide support for a stock price. A price that is critical when it's the only source of operating funds. Management knows this. Management has been told that this can't continue (repeatedly) and they've agreed - for years. Yet, the story doesn't change.
2. Back to Ronin. Ronin knows how to value, manage and fund an Avid type company. And, they invested in PPHM, so they want value for the IP that PPHM has invested heavily in, and quite possibly believes in, etc. But, they don't know what they can get for it. It's complex. There is no human trial success that says there is an approvable drug. And, if they're going to launch a takeover play, they need to provide an out for the current team. I'm not going to discuss this too much here, but seldom is a scorched earth battle won without a compromise. So, Ronin ponies up to the bar and says, "you've mismanaged your business so we're going to take it away. We see value in the Avid business and feel like if it's staffed right and managed right, it can be a big success. So, thank you very much, but we intend to take it from here. Now, don't sit there sulking. You guys obviously think you have a great opportunity and value sitting in your anti-PS, etc. IP. So, show us, you have until the ASM to work a deal, monetize the IP, find a funding partner, etc. If you can do that, maybe we can see a way out of this battle. We'll take Avid and the shareholders who want to ride with us and you guys can maybe save some face by taking the IP side, selling some ownership to a funding concern and moving the needle - finally. Now, if you can't get a deal done that benefits the shareholders (and of course we are shareholders) we'll just see you at the ASM."
3. So, the gauntlets been laid, the challenge thrown down. What does PPHM do? Well, it's natural to get mad and vow to fight. Then reality sets in. Shareholders are violently mad. The weaknesses in our position that we've been warned about for years are a biggggg problem. So after anger, then there's acceptance and PPHM prepares to fight. And, there are two options - use Delaware law, company by-laws and proxy battle strategy plans to ward off the assault. Or, PPHM can deliver on the years old promise of finding a partner for the IP, delivering a success and a clear path forward for the IP.
4. So, where are we? I think all the actions and tactics so far are fairly predictable. Ronin is moving forward with a plan to gain control of the board with Avid as the prize. If PPHM can pull off a good "deal" on the IP side, a negotiated face saving for all parties can possibly occur. Void a good deal, Ronin will move forward to gain control. If they get it, they'll bring in resources to evaluate the IP and monetize it. That doesn't mean it'll be a fire sale. Ronin are shareholders. They'll be looking for top dollar. Of course the conspiracy theorists amongst us have other ideas about this. I don't.
5. On the PPHM side, they're following a two-pronged approach. They're pursuing the procedural, Delaware law, proven proxy fight strategies, etc. that have warded off historical pursuers. But, their history and performance doesn't assure success in this area. Anybody remember the retail investors voting down the options plan a few years ago? It's worse now. But, in addition to the procedural fight, I've got to believe that PPHM woke up and actively set out to find a deal to save their butts. Can they get a deal? Will it be a good deal? Will it be enough? Well, I can tell you that if it's the kind of deal that James laid out regarding MSK, it won't be enough for me. That's mice nuts in the biotech world. And, it really won't say anything about validation of the technology. Besides, like has already been pointed out, we're talking about a SAB spot, not board seats. Unless of course, there is a sale of a controlling interest in the IP. If there isn't a change of control of the IP with adequate funding to launch numerous studies, I'm going to be hard to impress. I said this the other night in my Fred Frank post that everyone ignored, but it's time for PPHM management to "go big or go home".
6. So, can PPHM pull something off and "go big". I don't know. They haven't given us any reason to believe they can. As many of you know, I've never believed PPHM had an adequate deal team. Then again, I never bought the line that they were serious about making a deal. Many conversations that I won't relate, but the words "we'd like to do a deal" were always there. But, I never felt the conviction. And, the guys in charge never really had incentive. They do now. Will it be different? Tick tock.
Of course all of this is just MHO.
Regards and good luck to all with a vested interest.
WH
