In recent conversations I learned:
Cotara GBM:
Cotara trial in India will go extremely fast. The 40 patients will be divided into 7 centers, or about one cohort per center. As mentioned in the cc, many of these patients are already enrolled. The radio labeling is done by a single government operated center that works closely with PPHM. The dosing has to be individualized according to the size of each patient’s tumor. The government facility can easily handle 7 patients per week, or one patient per week per trial center. On this schedule all 40 patients could theoretically be completed in six weeks and realistically completed in 3 months.
Management is optimistic that top line GBM data from India will be released this summer. It seems Management intends to use this data to drive value in closing a Cotara GBM license this summer for a non-North American region.
In addition, I learned there is a new way to sell drugs for profit in Europe and some South American countries BEFORE they have been approved IF they have strong efficacy and safety data compared with SOC and the doctor names the patient who will receive the drug. PPHM intends to participate in these “Named Patient Programs” following results from the 40 patient Ph II study. Google this term for more info.
__________
HCV:
HCV Dosing Trial: HCV dosing trials will go very quickly. These trials are like to involve three cohorts of six patients each, with one cohort at weekly dosing, another cohort at bi-weekly dosing and a third cohort at monthly dosing. There’s no reason all three cohorts could not be run at same time. It’s quite possible to complete whole study from start to finish in 2-3 months.
HCV Combo Ribavirin Trial: Not able to get any update on when this will start or how long it will last. Perhaps this is a good sign.
__________
India Cancer Combo Study:
I learned the definitive MRI scan is taken at end of 8th week of therapy. There is no scan at end of 12th week. The last 4 weeks are just for a general evaluation follow-up period like in U.S. to make sure there are no adverse events after therapy completes.
The “glimpse” of India cancer data means same thing as “top line” results, i.e. summary data of scans done at end of 8th week for each different tumor type. It seems this “glimpse” may be released around mid-April when the 12th patient is “evaluable” by Indian standards. It seems the released data will be for only the 11 patients who were “evaluable” as of Feb 14 BIO CEO conference.
Unfortunately, it seems we may not be able to present India combo cancer data at ASCO because ASCO’s rule for late breaking abstracts is generally limited to Phase III data. But no final decision has yet been made on this point.
Fortunately, the very rapid pace of 12-patient India study means Company may be able to start Phase II Bavi cancer trials sooner than mid-summer. However, going in the other direction is the considerable time and attention required to design these Ph II trials (see next paragraph). For this reason, mid-summer is still a realistic date.
Genentech did about 22 Ph II studies in connection with Avastin, each study being around 100 patients. The Company believes it only needs to design and conduct two or three of these Ph II trials to position itself for maximum negotiating leverage with BP. Perhaps 2 of the 3 studies will be done in India. The design and relationship of what is studied first, second and third and what is studied in India vs the U.S. all needs to be worked out carefully over the next several months. The Company is extremely pleased that they went to India because it is the data now in hand from the 12 patient India study that allows them to start now in designing these critical Ph II studies.
_______________
AC v. AV; Who Will Be First Strategic Partner:
My well-educated guess is that the Company’s first strategic partner will be an anti-viral BP, not a cancer partner. My speculation is that this AV partner will be revealed in early summer when the HCV dosing studies are complete.
Bavi’s greatest humanitarian value will come from viral applications, but multiple factors conspire to make AV a less attractive commercial market than cancer. The efficacy bell curve experienced in AV studies, but not in cancer, is one of these factors. Another is that the HCV virus turns over every 4 hours. This and many other factors make it more difficult to find the ideal protocol for treating each separate viral disease. Vertex spends 250 million per year to advance is viral products and address all these nuances of the viral market.
The meat and potatoes of Peregrine’s business will always be cancer. As between taking on a cancer partner vs taking on a viral partner, Company will try to retain its independence as long as possible in cancer arena because that’s where highest commercial value can be realized by waiting and generating more Ph II data.
PPHM will definitely pursue Bavi viral applications but it will do so through a partner who is willing to take on the higher cost curve for viral drug development. The Company believes Bavi can do miracles in the viral arena. The point is they will look to take on strategic partners in the viral arena to share the R&D costs at the end of Phase I while in cancer they intend to complete several Phase II studies on their own before taking on a partner.
Will we need to see results of HCV combo study with Ribavirin before an AV licensing deal matures? Ans: Not necessarily. I understand there are some hungry BPs out there who may be willing already to speculate Bavi is next Interferon. The HCV dosing studies (weekly, bi-weekly and monthly) will help lock down the ideal HCV regimen. Once it’s known how many doses are needed over what intervals, a BP can determine how much a regimen will cost, what price market can bear, how this price compares to Interferon, what profit margins will result, and finally what they should pay for a license from PPHM at this stage.
__________________
AVID:
AVID revenues will be growing seriously and consistently now. The $1.9M figure is for shipments that occurred through date of cc. Additional shipments through April 30 will be added to the 10Q revenue figure. In addition, company requires its customers to make progress payments in cash as orders are completed and these are booked as deferred revenue. All we know for sure is that revenues for FY 2008 will exceed AVID’s highest prior revenues of $4.7M (thus making it a “record” year). I understand the $2M of shipments this 4th quarter is “sustainable.” IMO, from now on we can expect to see the $18M annual burn rate reduced by annual AVID sales of at least $8 million.
________________
Funding:
The $30 million raised by the Company this summer will pay for the Company’s $10 million FY 2008 annual burn rate (after $8M of AVID revenues) PLUS all the costs of 2 or 3 cancer Ph II studies involving 100 patients each.
How will the Company raise the next $30 million? In my opinion, it will come from a combination of (1) up-front fees from licensing Cotara for GBM in a non-North American regional market and/or (2) up-front fees from licensing Bavi for viral applications. Add to these revenues sales of Cotara from “Named Patient Programs” and you can get to $30 million fairly quickly. Remember, it’s not necessary to raise all of the $30M by June 30. The Company can easily persuade the auditors at 10-K time in early July that it has all needed working capital for the upcoming year by agreeing to drop one or two Ph II cancer studies if additional funds are not raised in the summer or fall from additional BP partnering deals.
___________________
Short Interest:
Management is eager to see a few hedge funds get destroyed when the short interest reverses. They are greatly annoyed to have their many accomplishments this year clouded and denied by price manipulation. The Company has its own carefully-guarded plans for evening the score. IMO, the day of reckoning is near.
AI
