Further notes and surmises from the Canadian White Paper*.
As the New Year approaches most of who are long are wondering why this stock is foundering under one dollar a share. To those of you who have not read the paper so kindly posted by L. R. Goudy I heartedly suggest you do. To understand the PPS it is important to understand (1) the underlying value GTCB's NPPS (novel protein production system) (2) the business of producing proteins as it exists now. (3) the stock market. This post does not intend to get into the various NPPS methods currently under development, Eg plant or avian.
(1) NPPS sytems are estimated to have a potential of over 10b/year. This IMHO is way too low and does not take into account the general drift of medicine toward system control. At present most NPPS is being done by private organizations which generate their own capital. At present only GTCB and Nexia are (according to the paper) are publicly traded NPPS pure plays.
(2) Current protein production. To understand some of GTCB's problems it is necessary to understand how big pharma and the FDA do things now. In the early days of transgenics, it was assumed big pharma (BP) would see the advantages of NPPS and BP would recruit companies like GTCB as a manufacturing arms. This has not happened. The reason is as follows... Time is a critical factor in drug development. BP is interested in getting a drug to market as quickly as possible. It turns out the easiest and the fastest way to get rolling is to produce the small amounts of protein required for the trials in cell culture. BP will use cell culture even in situations where they know they will not be able to produce enough product to meet the ckinical demand. To BP getting the product approved as quickly as possible by the FDA is by far and away the most important thing. If it turns they can not manufacter enough of the protien to satisfy the clinical demand they know the patients will make up the difference in higher prices. Why don't they switch to transgenics once they know they have a winner??? The reason is both the FDA and the CDA have stated their opinion that "an identical protein" produced by a different manufacturing technique (ie. cell culture vs transgenics) would be treated as a different drug, ie it would have to go through the whole approval process again.
(3) The stock market.. basically for all it's puported virtues the has the attention span of a one year old. GTCB right now is farther along the NPPS pathway than anyone else,, far enough along to see the prize table ahead. Certain things are clear. At present plasma protiens are their natural prey. Plasma protiens are not easly made in cell culture,plasma pooling can be shown to be an insufficent and dangerous source. The strategic allience with LFB is something the management should be very proud of.
Finally I would put my vote for best partnering arrangement would be with Monsanto.
please understand this is not a complete synopsis of the paper.
Happy New Year
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