RRdog Share Tuesday, March 15, 2011 4:05:13 PM
Re: None Post # of 150127
Sometimes, I like PPHM because of its' weaknesses --- that's what makes it a great value. Same long bias as last letter. IMHO only and take it for what its worth. I respect all the counter arguments and share some of the frustration.
The first weakness is, of course, market and investor "tone deafness". No one who listened to the moribund conference call will ever accuse this management of "hype". If ever there was a co. that could not communicate in plain English, this is it. Whether this is by design --- I doubt it because it is counter to corporate and board interest --or by genetic predisposition --- a more humorous but also more likely case --I don't know. What I do know is it works to produce lower valuation and a better long term opp.
One wonders exactly what value is added by the IR dept at PPHM. I note that with all the advances PPHM has made in the last year, it traded at a higher market cap under the Gendel/ Lindheim IR tenure. (and the market averages were all lower at that time as well)
The rumor is that the present IR department is adept at setting up institutional meetings for PPHM. If they really wanted to be effective,--- they would help position the next 3mm share private placement with the "investment arm of a major pharmaceutical company" . By analogy, Facebook was ventured by a number of other hi tech companies such as Goog. If you can't do exactly what they do, you can be smart enough to know a good idea when you see it and invest in it. Such an investment might give a pharma extra incentive should they want to partner something.
To sum up on this matter: doing a Fri 4:30 CC--the equivalent of slinking off in the middle of the night----, reading scientific treatises with no emotional enthusiasm, not translating events into clear investor English, and restricting Q and A to a short time span and the two analysts is, IMHO, just a silly way of doing things. Hence more long term opp.
Apparently, Bavi does a good job of up potentiating the immuno system but, not quickly enough to save an Orang that will die in 5 days from a lethal dose of Ebola.
Of more importance was SK statement that the 10-12 million dollar contract extension was mostly earmarked for third party sub contractors and has little effect on PPHM cash flow.
IMHO and as previously stated, PPHM still needs a head of Gov't contracting of the caliber of Dr. M and Dr. G on the regulatory side. Besides RFPs there are also RFFs. The largest problems the army officer corps faces are breast cancer in women and prostate in men. It would seem if we could drum up 24mm for HF/ Ebola (about 6mm an unfortunate Orang-- in my guess), we might drum up a lot of dollars in those two cancer areas.
The "bad batch" at Avid is truly a hiccup. Its good that PPHM caught it, will learn from it and it sets revenue back in time about 2mm+. Such is life in the fast lane. Any overly emotional reaction to these events spells opportunity IMHO.
Now for the more important info to be gleaned from the call :
1. The trials appear roughly on schedule. Nothing is easy. It may take a couple of extra months. If it was easy, biotech companies that succeed wouldn't be worth billions of dollars in market cap.
2. Data flow and conferencing appear robust over the next six months visibility.
3. The regulatory/clinical trial environment is becoming more tricky and "artful". Here, I think PPHM
has a clear advantage over most smaller biotech companies. They have a top regulatory team bolstered by Dr. M to help them navigate and communicate with FDA, and, they have a big head start with all the clinicals that are already cleared by FDA and in progress. In plain English, PPHM may be the "leper with the most fingers left".
4. I agree with other posts that the Cotara FDA meeting may be more sophisticated in approach than previously perceived. PPHM wants to go into FDA with much more than collated data. They also want to be prepared with labeling and a radioisotope partner, a manufacturing plan, a marketing plan, and a decisive phase III plan. I applaud PPHM mgmt for this and IMHO it moves the company closer to positive FDA rulings, SPAs, and commercial partnering. (see #1- it may take a bit more time)
5. Re Dr. Thorpe:
Dr. Thorpe is about to embark on what amounts to a scientific "tour de force" speaking in rapid succession at AACR, Informa Recombinant Antibodies Conference, etc., etc.. This is profile raising stuff in front of his peers. If Dr. Thorpe's work is ultimately successful, he is a lead candidate for a Nobel Prize in medical research. If he is wrong after ten years of research, he will look foolish. I've personally heard Dr. Thorpe speak and he is no fool. His lab at UTSW is highly respected. For him to want to raise his profile now is very interesting IMHO. Dr. Thorpe is extremely effective when speaking to his peers in medical language and settings.
Therefore, IMHO he has potentially "catalytic" (a Roth analyst word) material he wants to discuss in the proper setting for maximum effect.
Dr. Thorpe has "already" patented (assigned to PPHM) the "PE" approach which is the sister to PS.
Ultimately, this may be of tremendous value and is hidden in the PPHM IP I have previously alluded to.
Dr. Thorpe "doubles down" and moves "all in" re my previously commented upon "Imaging" patents.
He goes even further by talking about a "diagnostic that is also predictive". The value here continues to grow. My only difference with PPHM is that I would be looking for a major diagnostics company for immediate partnering. This is a whole different field and PPHM can barely handle what's already on its plate. My opinion on this would only change if PPHM raised 75-100mm from a commercial partner and could afford to set up a separate division devoted solely to imaging. Imaging , IMHO, is worth a fortune to PPHM.
Lastly, the most important business issue for PPHM still needing to be addressed is financing. Until this is addressed, shareholders are faced with the steady drip of ATMs. Once again, IMHO, this silliness gives longer term investors tremendous value opportunity assuming this issue will ultimately be dealt with.
As an adjunct to the last paragraph, PPHM really needs a first class investment banker. If they truly have first of class technology moving into phase III then why not walk into a major banker instead of the small firms they talk to. Smart bankers can see future potential in small companies--especially if there are billions of dollars in market cap at stake. There are numerous superior structures for financing at higher market cap value than PPHM is currently getting for ATM. Really would like to see mgmt wake up to other possibilities. After a decade of ATM its a little analogous to "Libya"--time for a change.
IMHO, PPHM moves closer to partnering, which must inevitably happen, and they have more partnering possibilities. Public Reply | Private Reply | Keep | Last Read Edit Msg (1 min left) | Previous | Next
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