I would like to briefly interrupt the constant bitching, moaning, ranting and raving, bleating and expressions of frustration, anger and other negative emotions that I have been reading on this board over the last few months to review the progress PPHM has made to date, the events I expect to see occur over the next six to nine months, a clearer picture of our financial landscape today and going forward.
Financing and the stock price:
Up until the end of the fiscal year my projections for the burn rate and ATM sales were very much on track. In July when they reported the results (See my mid-year assessment sniped below) things started to diverge. In spite of the fact that they reported ~$5M in revenue from Avid for the first quarter, the ATM continued at a blistering pace…??? Why? I first thought that the additional cost might be associated with the cost of so many additional trial sites. That still may have been a contributing factor. And then ~9% of the company was sold for ~$6.5M…WTF??? The recent discussion on this board about the possible Avid expansion strikes me as very plausible. Management has not spoken about Avid recently, other than upping the revenue projects to ~$10M to $12M. Regardless of the method i.e. increased CMO revenue, Biosimulars, partial sale of Avid; increased revenue/capital is in our future. My guess…6 – 9 months from now.
This is from my mid-year assessment.
“Last quarters operating costs (Burn rate) were approaching ~$8M. With all of the irons that PPHM has in the fire, I cannot see that going down. As a matter of fact I see the potential for the burn rate to go up.
With a burn rate in the $8-9M range for the last quarter I assume that that money was raised in March and April. With an average share price of $2.27 for March and $2.51 for April they could have sold between 3.5M – 4.0M shares. That would leave ~$24M as a cash reserve at the start of this new fiscal year and outstanding shares of about 71.4M to 71.9M.
With an annual burn rate in the range of ~$32M to ~$36M and my projected cash reserve of ~$24M at the start of the year I suspect that the “Going concern” clause will be with us again. What could change that? There could be signed contracts with projected timetables and payment schedules that could impact the clause in a positive way.”
Data from the 10K:
Burn rate for the fourth quarter was $8,961,000
As of 4-30-11 there were 69,837,142 shares outstanding. +1,951,331
In addition, the 10K states: “Number of shares of Common Stock outstanding as of July 8, 2011: 71,069,858”
Cotara:
There is NO doubt in my mind that management will do everything it can to close a deal for Cotara. I speculated on what I thought a deal would be worth in my beginning of the year analysis that I posted in January, sniped below:
My SWAG…Trial cost ($24M to $37M) + Prior development cost ($20M to $30M…???) + Lump sum ($35M to $70M…???) = $79M to $137M
The above was for both the E.U. & USA markets. There are several scenarios that can come into play; including PPHM keeps the USA market for itself and partners E.U. or Partners All…PPHM goes it alone…or nothing…!!!
BAVITUXIMAB (Viral):
In my earlier assessment I did not consider Bavituximab viral beyond the government contract; however I now believe that the viral indication could be licensed before the oncology indications. I think that the plan is to replace peg-interferon in the current HCV cocktail. In 2010 world wide sales for peg-interferon were ~$2.4M…Hmmmmm… ~$1.6M of that was Roche’s…More Hmmmmm…
BAVITUXIMAB (NSCLC):
According to management we should have data from the two trials by mid-year 2012. Will someone start nibbling before then…???
My personal financial plan…I will continue to buy on these dips and continue to sell half of my trading shares on the pops. That allows me to slowly increase my long position with shares at a zero cost basis.
I hate two things…The shorts that are driving this stock down and waiting…!!!
Regards
Golfho
