Here are some of my notes taken at the asm. They are very brief paraphrases, since I never took shorthand in school.
As usual, Brandon Cox was the first to take the microphone with a long list of questions, that at least this shareholder very much appreciated.
Q. You are burning 3 - 4 million per quarter, with no cash and no back log. How do you plan to raise capital?
A. Your estimate of our burn rate is in the right ball park. We do have 33 million in backlog, but that is quite conservative. Most companies recognize all of an order when it is placed, but traditionally, PPHM has only recognized backlog as work orders for that order are placed. But clearly, we need more capital. We must eliminate the 'going concern' clause. While it may not be ideal for a small biotech, it is probably something they can live with. But for a manufacturing company, it is a death knell. Customers need to know that you are going to be around for the long term.
Q. How dilutive will it be?
A. We don't know yet. We don't know how much we will need yet.
Q. Is anyone from the old management team working to help sell the R&D technology?
A. Yes, Shelly. And others are working as consultants.
Q. Most CDMO's are private companies. Are there any plans to take the company private?
A. Not currently. (He did mention, kind of jokingly, that it would be nice).
Q. Who are the major institutional investors?
A. Still Ronan, Tappan, and Eastern Capital.
Q. Will they be involved in the capital raise?
A. Hopefully.
Q. What is the cost of being a public company?
A. About 2 - 3 million per year.
Q. As a strickly manufacturing company, do we really need 7 board members?
A. Right now, the experience that they all bring is extremely helpfull. Down the road, maybe not.
Q. How much cash do we currently have?
A. 27.7 million. (Not quite sure I got this right, but I think that 10 million was in customer deposits).
Q. Will Avid expand beyond the earthquake prone Tustin area?
A. It could be done relatively easily. Down the road, it will be evaluated.
Then Brandon relinquished the mike and North40k gave a long and impassioned commentary about various trials and people (such as Dr. Wolchock) that the company should contact about Bavituximab. He mentioned Wolchock's comment that his next trial "depends on the company".
Dr. Lias stated that Dr. Wolchock has not contacted the company. He mentioned that an associate of Dr. Wolchock had said that it will be 18 months before the next trial proceeds. (This was met with incredulity from several shareholders in attendance).
Dr. Lias stated that they have numerous discussions regarding car-t, but there was no interest. In some other discussions, they found our technology interesting, but then said "prove it in a trial".
N40k then asked if the recent Halozyme trial failure would affect Avid. It will not.
Brandon Cox then resumed his questioning. He asked a question regarding the IP patent clock, which I previously reported. For continuity, Dr. Lias's answer was that as patents start to expire, and a BP realizes that it will take about 70 million dollars and 3 - 4 years to bring a product to market, a five year patent life is not that exciting to them.
Q. How much Bavi do we have in storage?
A. Enough for a couple of small trials, nothing big.
Q. Client #1 is Halozyme. We don't know the name of client #2, but are they gone for good?
A. No, but I don't expect them to be hugely successful. They will be years down the road.
Q. Question regarding the interest in the exosome test kit.
A. Not much commercial interest.
Q. Are you trying to sell the IP in bits and pieces or as a package deal?
A. While a package deal would be ideal, not gonna happen.
Then Greg got up and asked about the process of sell the IP. Dr. Lias commented that there was not much interest. The previous board has talked to everyone - it is not a secret - just not much interest.
Then N40k asked the board to contact Precision for Medicine, which concluded the Q&A.
Again, this is very roughly paraphased from my notes. Other members that were in attendance, please correct anything that I may have inadvertently gotten wrong.
As I decided to take the tour, I was not abel to talk to the board members one on one after the meeting.
Michael
