General comments on a weekend:
Tremendous thanks to FTM for his excellent posts on ORR, PFS, MOS numbers and Avastin comparison and history 76695 and 76738. These posts were informative and helpful.
Tremendous thanks to Purpledawg for his excellent summary number 76697. Couldn't have done a better job.
The full transcript of the CC less the Q and A is posted by Cheynew on 76701. Interesting and worth a careful read.
I agree with Jakedogman1 comments in 76734 specific to his data analysis only. I agree with him on this analysis and (when I am not angry or emotional) tend to rely on the math. In this case IMO there is a large probability that there will be "reversion to the mean" which should be very favorable for PPHM and Bavi. Hundreds and hundreds of patients have been tested on the chemo and there is a very well defined "mean" response. SK will have to learn how to be upbeat yet still "curb his enthusiasm" when he talks about preliminary data being "potentially game changing". If a few pieces move around in a small sample there can be swings in the statistical analysis. FTM , again, does an excellent job in his comments on this. The FDA and, more importantly for PPHM shareholders, "partners" will move on the MOS data. I hope the MOS is good of course, and IMO the probabilities are still very favorable.
I share the pain (probably more than my share due to sizing) of all the disgruntled posting. I have been particularly critical of the one "D" thinking re bridge financing and all the attendant issues. I note for everyone who commented on my numbers re Avid free cash flow that even if I was somewhat ahead of myself the numbers are moving in my direction. Too much debt is fatal, too little debt is overly conservative. PPHM could easily pay the interest and principal of 40-50mm in debt from Avid free cash flow. That debt could be retired at the time of any larger commercial transaction and thus be viewed as a form of bridge financing. My math says this could buy PPHM a lot of valuable time. It would be preferable to diluting through the ATM by 50-80mm shares at current prices.
That having been said, I think IMO posters have to bear in mind that this is "brain surgery" and "cancer research" - not easy stuff, not stuff always on a preset timeline. The data and decision making, and partnering and financing are not bound by hard and fast "Newtonian Laws" like the predictable orbiting of planets around the sun. Rather, these issues are closer to "quantum physics" where things are either energy or mass but never both at the same time, where there are always multiple options.
A few words on financing -back to my favorite subject. The announcement of this additional shelf for 150mm in addition to approximately 40mm still extant - no matter how clumsily timed--is interesting and I note the following:
1. The fact that it is filed and available does not mean it will necessarily be used immediately. On the contrary, IMO PPHM will try to do the least financing in this price area possible and will continue to titrate stock into the market to stay around the 20mm cash on balance sheet area net after expenses and Avid income. The good news IMO is that I believe clinical expenses are tapering down and that Avid free cash flow is moving up so that the burn rate may regress to lower more historical rate.
2. The timing is interesting. Firstly, there may be a desire to put all the nasty stuff out there and get it behind us. In that case we are in the "washout" period that JR talks about.
Secondly, there may be a bit of "negotiating bluster" to this announcement. This is encouraging to me as it makes the partnering discussions seem more "present time."
Thirdly, getting back to the quantum and opportunistic nature of the biotech business, if something good should happen (--I know, I know, it never does--) but, if something good should happen PPHM may need this shelf for a couple of reasons. Two come to mind immediately -- as part of a sweetener for a partnering deal and self funding at much higher prices.
For the two reasons above it is interesting to note that the shelf is expressed in dollars and not enumerated in shares. If, for example, there were a Cotara breakthrough at the FDA and then with a partner , PPHM would need less funding (to the extent of upfront dollars) but might also get a chance to self fund at much higher prices and less dilution. Self funding at higher prices would put PPHM in a much stronger position for further clinicals and negotiations.
This example is not totally a figment of my imagination. I found Garnick's discussion re Cotara/FDA very interesting. It is clear this FDA process is deep into an "iterative negotiating process" which is both verbal and written and appears cooperative on both sides. Twice Garnick used the word "orphan" when describing Cotara. Orphan status is for drugs that are encouraged by the state to be developed due to an unmet need , get an easier approval pathway, and sometimes get other incentives for development such as longer periods of exclusivity.
IMO, based on Garnick's comments, I think PPHM and the FDA will come to a partnerable middle ground re Cotara in the not distant future and this may be one reason for the need to talk about a larger shelf now.
Best Regards in this dark moment,
RRdog
AI
