A round of conspiracy and undervaluation
Introduction
Yesterday the board clearly ran a round of anti-Peregrine conspiracy and related it to a “give us the bread crumbs now and we’ll be quite” counter strategy. I will not generalize because cj, wh, ftm and bungler have certainly thrown some realism and feets on the ground counterweight but in the end the 'fil-rouge' was: conspiracy and be happy with 20$ per PPHM share. Well let’s see!
The Peregrine treat to the industry
It is amazing how we progressed from “Bavi the placebo” to “Bavi the existential treat for BPs”. Now, that is a good evolution, I prefer doom based on strength then doom based on weakness. But is Peregrine, and not just Bavi, a treat to BPs. The answer is yes and no! Let’s look into it step by step.
The BP dilemma
A BP can be dealing with pipelines drying up, coming to their end of IP protection, and being in need to replace their drugs with new and better ones that can again profit from IP protection. They can also be dealing with ‘uncertain’ pipelines. Avastin with its many mortal side effects has suffered retraction by the FDA after approval and most reports are really not good. Never the less Roche has 1500+ clinical trials, of which about 460 active ones including ISTs, running for Avastin alone and lots of money is involved. Other BPs have not so long ago, around the Bavi announcement of the 7th Sept, almost all in concert, stopped their lung cancer programs (as posted on the board). Finally, BPs that are normally deadly competitors decide to start up a joined research program. If they all won’t come up with better and newly protected drugs the generic drug manufacturers that don’t have the research, marketing cost and overhead cost of BPs will eat the BPs unprotected market bit by bit.
You do not protect yourself from that by killing a company as Peregrine that has such new and better product, or at least a compound that could be brought to the market in a ‘packet’ so that generic manufacturers cannot make the combination.
No, you embrace that company and make sure you continue to tank based on the protection of the new compound by contracting exclusivity for your original branded substance. All BPs could make such agreement with Peregrine and so doing extend their protection by association.
This brings us to the SOC risk. The biggest risk as explained before is that in doing so this composed package including Bavi will after passing the PIII clinical trial stage become the new SOC. That puts the BPs in a dangerous position that actually effectuates the real treat here! Adding Bavi to a cocktail doesn't make the original branded SOC better at all because it didn't change at all, the improvement comes from Bavi and therefor a dependency on Bavi.
If you want to undo yourself from Bavi you’ll have to place something better in the package to replace it and a drug with the qualities Bavi exposes is not one that we will see surface every 10 years, well not at the current rate of scientific research! So, Peregrine can sell business protection to BPs but that deal will include dependency on Bavi. That’s the BPs dilemma to solve the dry pipelines and generic manufacturers competition. However, unlike Microsoft that had only one BP, IBM, to make its deal because they where the only ones needed an OS, Peregrine has a minefield of BPs to make deals with.
Peregrine the sum of its components
I keep saying it is a big mistake to look at Peregrine and translate it into “bavituximab” and “cotara” and “digital imaging” and “Avid production” as if it were separate non related things. They are not from clinical trial point of view and at first glance they are unrelated, but from the viewpoint of an overall medical oncological process flow they match the detection (digital imaging – full human Bavi), delivery-tumor cell destruction (Cotara), clean-up and healing (Bavi) accompanied by manufacturing abilities (Avid).
It’s not me but Peregrine themselves that state that Cotara is for all solid cancers and brain cancer is just the most difficult one they pick for the clinical trial. It’s not me but Peregrine that picked none small cell lung cancer and pancreatic, amongst the most deadly and difficult to treat ones, for their clinical trials while also usable for breast, liver, etc. It’s not me but Peregrine that positions Full Human Bavi as the digital imaging product with which, as Thorpe pictures posted by FTM showed, light up your tumors as Christmas trees.
So this is another treat for all those BPs that are active in chemo/radio therapy and would have exclusivity for Bavi with their product, excluding generic products by packaging. Today it are those products that damage the cells which results in PS exposure outside the cell in sufficient amounts so that Bavi can come into play. But while they would have exclusivity for their specific drug type they would not be able to keep Cotara+Bavi from the market. Given the safety profile of both and the results achieved in Cotara brain such a cocktail would beat many, if not any, combination of current chemo/radio+bavi hands down! The damage to healthy tissue made by chemo/radio therapies is among other the cause of the many side effects which in turn result in early death which in turn weights on the MOS, survival and other clinical trial results.
BP strategies
BPs can deploy many strategies when they are dealing with small vulnerable, publicly listed or non-listed, companies for important but not existential, nor breakthrough drugs. They can solve it with money, obstruction, lobbying, etc. Mostly in such situations they are not even all competing against each other but apply the Nash Equilibrium approach (John Nash, Nobel price economy), each pick their thing from the market but avoid competition in order to keep the acquisition and partnership prices reasonable. Call it “Pax BP”!
Fortunately or Unfortunately Peregrine doesn’t fall in that category. It holds the cure, or at least a component to cure cancer today with high success rate compared to the current state of the art. It has something the world is waiting for, all European countries and I suppose others like the US too, have hundreds of charities and organizations all working towards the cure of cancer. Governments through social security and Insurance companies pay fortunes in medical care and life insurance, and voting citizens lose their loved ones to this terrible condition. On top of that Peregrine has not just a single compound; it actually can come up with the complete line of treatment and has a very good outlook to patent protection period extension because up to today it still hasn’t launched any commercial product that is protected by those patents.
Besides that there are complete communities, us here the individual investors at a world-wide scale, the Institutional Investors, the big investors such as dart, the hundreds of involved employees with their stock option plans, the BoD and Management with their shares and/or options, etc.
But as if that isn't sufficient there is a much, much bigger treat then all that in trying to push Peregrine’s head under water! The real treat is that here the Nash Equilibrium doesn't apply! As said, Peregrine is an existential treat to most of the BPs for their full oncology related pipelines from detection over delivery and destruction to clean-up and healing plus production and will LOCK the SOC for many decades!
Peregrine running that show is not a real threat. They are too small, they don’t have the means to run it alone, they could be kept from the market by medical rep lobbying alone, spreading some billion dollars over the doctors that prescribe the treatments or as my country did when the French wanted to challenge the soil cultivated high quality chicory (with-love from Belgium) with water cultivated one, give the complete yearly production at 50% of the price killing 90% of Frances water culture and clearly establishing the difference in product quality on the market. France never succeeded to make the 1 to 3$ per bot on the US market with their low quality water cultivated product. Peregrine would not be able to for instance compete at say 50% down marked Avastin prices, but Roche would possibly only feel it in reduced profit for a year.
So the bottom line is that when competition is existential and the Nash Equilibrium doesn’t hold you cannot rely on the ‘anti-trust, anti-consortium’ bypass that allows for unnegotiated price agreements that are legal compared to negotiated price agreements. The risk here is that one party breaks the trust and buys Peregrine and all the others would be in deep trouble. That is just too much to hang up on a ‘non explicit, non-contracted’ silent understanding.
This is where the BPs are left with 3 options. Make illegal agreements among them and make sure they include ever single party on a world-wide scale that has the depth of pocket to buy or sponsor Peregrine. I did not say BP, I said PARTY! If Warren Buffet would tomorrow be diagnosed with cancer, believe me Hathaway would be in Peregrine big time. So that option involves to many parties.
Involving politics and obstructing will only work if they ALL join in the effort and their again they need to make illegal agreements on a world scale, because if the cure is available in Russia then believe my you’ll have cancer tourism to Russia just as you have breast-enlargement and surgical tourism from the UK, The Netherlands, France, etc. to Belgian hospitals today. US citizens would be asking questions why they are let to die while other parts of the world have the medical solutions invented in the US at work. We live in a communication era with internet, social communities, news over satellites and keeping people dumb doesn’t work that well anymore.
So the 3rd solution, deploying money, and making agreements with Peregrine, individually or through their new Biopharma joint research initiative is most certainly the best way for everyone.
Conclusion
As there may be some stock conspiracy, if you can call that a conspiracy, I personally don’t believe in BP conspiracies. In this age they must adapt their strategies, certainly now that their obstruction techniques are in the open and the 31 US judges plus the Federal Court is starting an investigation and the governmental bodies are incited to get breakthrough drug approved faster and more easily. The US has for the moment an health care focused President and administration and a way to make social security available to more people is for sure the get better and cheaper products. Also Europe started a combat against their own BPs years ago with the mandatory offering of alternative products to patients that have prescriptions for the more expensive BP branded products by the pharmacies. If BPs want something done against the Russian, Asian and Indian counterfeiting of their brand products by the Western Gov’s they’ll need to play ball in other area’s. So I don’t think Peregrine has to fear any conspiracy and giving it away for 20 or 100$ is panic football.
You don’t give away the Microsoft of Biotechnology for 100$ a share.
AI
