Replies to post #293845 on Avid Bioservices Inc (CDMO)

[north40000]

WH, are you in Washington now, and attending AACR 2017? If so, answer this short note, and I can arrange to meet you at a time you find convenient. You may recall that you, my M.D., J.D. spouse, and I had lunch after an ASM in California. Let me know...I can tell you what I have done regarding the exosome part of your essay. I also have attended AACR this past Sunday and Monday, and have retained my pass to enter tomorrow.

If I don't hear from you, I will correspond later. I do not recall whether I retained your card and/or your email address from our previous meeting.

[spankyvol]

Exosome testing is interesting. I wonder what the clowns will do with it next?

Probably nothing.

[chevalblanc-47]

WH,
I agree on what you are saying 100%.
Been in TCLN/PPHM since 1994, EL is a friend.
I do not understand why PPHM is trading so low. As you write, they have a role in 3
very exciting fields. The ovarian thing is unbelievable but no one cares. Why?
There are many companies out there with less than nothing in the pipeline but market caps in the billions.
I don't believe in manipulation or sabotage. Maybe we are still way below the radar screen of serious investors.
Wall Street for sure doesn't know we exist. Time will tell, pretty soon I guess. Let's have a March 2000 run again. :-)
thank you
kind regards
danny

[BioBS2012]

Wildhorses, that is an excellent and accurate description of the three "arms" of $PPHM's core business as it stands today and also the relative importance of each "arm" as things stand today. Hopefully at some point (SOON) #2 and #3 will over take AVID in terms of importance and value assignment to the company. I believe you described the pros and cons of each very nicely. Not much to add myself. Well written and thank you.

Cheers.

[asmarterwookie]

Top O' the Wonderful Words Wednesday Wild horses and All Peregrinners!!!!

Great post WH. I love the blah blah blah.... : )

Long time no post?

One wookie thought about the exosome test. We have a sample, then a sample of the sample needs to be extracted. The 2nd "extracted" sample is the one that can be examined for physical attributes (ps exposure) and/or genetics/other markers.

I think a major differentiation is along the lines of your "titration" statement regarding the sample. I think I used the term precipitate. The word "sample" has many layers and this is where Peregrines method stands out. Peregrine seems to be able to extract the important pieces that need to be tested from the blood sample without denigrating the "extracts" genetics and other delicate stuff that may be damaged through other physical separation methods such as centrifuges and filtration.

My point, Peregrine may have the method to grab the sample that everyone will want, not necessarily the "testing" part.

Analogy: Everyone wants the gold and you must have the best equipment to separate the dirt from the treasure.

wook

[Hypi]

Here is what your are missing:

An RS is on the way and 90+% of the time its real bad for shareholders. Those getting in after the RS might do ok, but I would wait as it will pull back for a few weeks at least. Probably get us back to what will be an equivalent of .30 and that means a long way to get back to where we are today (100% gain) before breaking even.

Now if what you posted comes true (even part of it) and we can avoid the RS, while not running the ATM on full throttle then YES the future is bright. I just hope to God these SOB's do have a real plan for avoiding the RS. Tired of the green shoots, puppy dog tails and blue skies. SHOW ME THE MONEY!

Hopefully Ronin is smarter then me and knows something regarding the RS and how it will be stopped.

[Protector]

Wildhorses, in response to your post:

1) I am also into PPHM (all-or-nothing) since TCLN and while it was 90% nothing to start with I have build my position up seeing it get closer to ALL as several risk factors fell of the table. Today my personal estimate of "nothing" is 5%. Bavituximab not working was the biggest risk which is gone now. Getting it FDA approved is a matter of running the correct trial. Loans and financing problems were another big risk as were hostile acquisitions and breadcrumb deals with BP that encumber pipeline and IP. All gone. So like you I have a big long position.

2) About the new AACR information you wrote:

I'm "extremely hopeful" and I don't see others sharing my optimism. So, I'm a bit confused.

You are not alone, BUT CURRENTLY you are only in the company of those that understand and all together, a few exceptions apart incl. myself, most of them don't post. That may you make feel alone but you are not.

3) I start to have my doubs with P. Lytle two. I gave him all the benefit of the doubt over an extended period but but statements as the one you quoted, the way PR's are released, the way PPHM communicates, the clouded representation of Avid numbers (hiding Bavi production in 3rd part cost) etc make me see him as a weak link. Probably he unique selling proposition is that he does what CEO King tells him to do and he is no source of leaks and loyal to the company. SO keep him but give him an assistant that understand IR/Wall St/Markets/etc.

4) His x2/x3 statement for a business in the bio-similars markets that is no longer a 2 but now I think a 7 award winning business of which PPHM claimed in the past that they can build the facilities for 10% of the price they normally cost, cGMP compliant, newest advanced state of the art (or behind state of the art) technology, producing GRAMS where others produce MILLI-GRAMS, full order book, backlog, new facilities in build-up, etc is worth WAY MORE then x2/x3. I think our x6 may be closer as the business is growing at an extend that last year 10Mil$ orders have been refused due to lack of capacity.

5) Avid is indeed not the home-run, it is a SUPER financing vehicle and has now triple confirmation for SUSTAINED PROFITABILITY in 14 months from now. So doing AVID is the safeguard that keeps PPHM from encumbering its IP/pipelines under their potential value or as collateral for loans.

6) Indeed the backlog is COMMITTED business that has been called for under the cap of a more general contract that just defines the terms under which a customer calls for production of batches. As massH explained such contracts are, due to practical reasons and the cost of start up etc, mostly long term contracts. The HALO reports about the selection of Avid for their ROCHE contract confirm that.

7) Bavituximab works, indeed more and more data supports it but more importantly the KOL and now World Top scientists, who presented it with PPHM at AACR and upcoming ASCO, say it too. But working isn't sufficient and the FDA has no good approval system in transition times. And with emerging IO we are in transition times. During Sunrise Opdivo was approved and the control arm patients, and since yesterday's information from AACR we know it for SURE, got benefits from such treatment and therefore MADE IT APPEAR as if Docetaxel+Placebo had a super result, while actually it didn't. yet we had to compare Docetaxel+Bavituximab results to the control arm AS IF Docetaxel+Placebo achieved the results in their MOS table. But OK, since we now have 100% sure confirmation Bavituximab works it is a question of presenting a clinical trial to that FDA that can EFFECTIVELY measure the difference WITHOUT involvement of OTHER treatments (that might have been promoted to control arm by BMY because it was in their advantage. The centers were know, the type of cancer too, so singling out the patients would have been peanuts).

8) You omitted biomarkers in your assessment and they will make a BIG DIFFERENCE. Being able to single out the patient group for which a treatment works BEFORE including them in a clinical trial should speed-up clinical trials tremendously as the graph tails will very quickly separate. At a first look-in the chances of stat.sig results are very high.

9) PPHM has PRed yesterday for the second time in a few days that the PS targeting program is ALSO being partnered. As a consequence the space at that table you were mentioning will very quickly become very large.

10) About new hope. There is, IMO, a difference with new hope for something completely new or new hope based on previous hope with a 'practical bump in the road' to use Dr. Garnick's terms. I would say that in the case of Bavituximab we are NOT talking about new hope in a new substance, but in a WAY to bring it to MARKET. Sunrise was our previous hope (a PIII clinical trial) with a path to market related to chemo-therapy. While it would have resulted in faster ROI the IO market, the new hope, is so much better and the pre-clinical work, including yesterdays new clinical results, are SO MUCH MORE PROMISING. Voices in the industry have recently (say 6-12 moths ago) start doubting about IO due to its low response. If you must ROI on 20% of the patients then you become extremely expensive. The new hope Immuno-oncology takes some longer but, certainly since we can now also include CAR-T, is SO MUCH MORE LUCRATIVE. But the BEST THING is that we have the top-notch scientific leaders and KOLs behind us on this one and it aligns with BP's interest (doubling, tripling, etc there # of responders to their drugs).


11) Exosomes are no new hope, they are an additional application from the PS targeting platform. Biopsies are unwanted by everybody because of their price, in some cases painful for the patients (remember liver trial), etc. Blood taking is easy, widely offered, comparable cheap, fast and patients perceive it as a minor intervention.

12) I completely support your statements on "early detection" of cancers but I would add "accuracy" to the mix. Many of today's available diagnostics for cancer suffer false positives and false negatives. In my view that makes the worthless because you want to know for sure, it is your life we are talking about. Because PPHM relates micro-vesicle composition ALSO to PS levels and NOT ONLY to the levels of OTHER composing molecules that are of interest in cancer diagnostics, they can seriously improve their results. The presence of one of said other molecules in levels that would otherwise signify a 'positive' can be cancelled out if the PS levels are at the continuously ongoing apoptosis levels rather than at the increased apoptosis+cancer levels. In that reasoning damaged cells due to cancer increase the total amount of PS in semicircles as the damage is mostly with the endothelial cells that, when damaged, bring their micro vesicles directly in the blood stream.
That, IMO, in what should realy be the source of excitement because it will change the complete landscape of solid tumor early detection diagnostics.

13) On the FINANCIAL side of PPHM's exosome blood your 'pro-active' statement is probably what will make it a hit. I to would not hesitate for a simple blood test yearly or twice yearly, just as the dentist visits, to prevent a lot of misery as it works for all solid cancers at once. Do such tests yearly today, for ALL SOLID CANCERS, would not only force you in MANY interventions and doctor/hospital visits but it would ALSO ruin most people plain and simple.

14) Fast, Cheap, Simple and Accurate! Yes, why isn't everybody talking about it yet? Well IMO first the relatively poor informed public about these topics. How many people knew what titration was before reading this board? How many knew about the impact of needing centrifugal services on your sample, time & price wise? How many to begin with even new that most tests today have much false positives, do only a fraction of what diagnostic tests should do and are a pain in the A is many cases for the patient? Yes, PPHM's IR/PR on the subject was as usual not market grade, NOR BP CEO or Director grade, but scientists grade. So they depend on that scientist XYZ with BP ABC reading it, then shelving it because he might see his own diagnostics work cancelled if his company invests in such new technology. And Wall St...well for Wall St. this new PPHM exosome technology will have value depending on HOW it will be brought to market. A world-wide exclusive partner such as J&J/Janssens Diagnostics, AstraZeneca Diagnostics Dept, Roche Diagnostics, etc will give a MUCH HIGHER value to the exosome test then distributing it via many of the smaller players, as there are in abundance on this list. Signing a partnership tells Wall St. it works and there is money in it or BP wouldn't take it.

AIMO.









Now here's what I don't understand. If you understand the statistics related to early detection as it relates to survival, why isn't everyone all a gaggle about PPHM's announcement on exosomes and the information it provided on Ovarian cancer detection? Quite frankly, I found it to be unbelievably compelling. Now understand, as is usual, PPHM didn't go overboard with their disclosure. And, the field of competition is hopefully very robust in this area. I say hopefully it's very robust because I want to see results in the area of cancer treatment as I stated above. So, I want someone to succeed. But, if you recall, I also would like to make money. So, I'm also hopeful that the eventual diagnostic winner is PPHM. So, I've been researching this area a bit. Different folks are heading down different paths. But, so far, I've not come across an approach that seems to make as much sense or quite possibly should have as large universe of application than the UTSW/PPHM method. The fact that they were able to get the results they got and that they PR'd have me drooling?

Another factor that I love about this application is that we are not talking about trying to develop and test a treatment that will require years of human trials and testing. The PPHM exosome test relies on doing an analysis on a blood sample taken from a patient. Blood can be drawn in 2 minutes. The UTSW/PPHM method concentrates exosomes via titration, not expensive centrifugation. So, one might conclude that this test is very simple and should be relatively inexpensive. And, here's the best part. Patients should be lining up to get tested in the examination phase. Why not? The difficulty is limited to a blood test. You don't take a drug. You don't cram and instrument up some body cavity. You don't get scanned. You don't ..... Then, if you have a suspected positive, you're off to biopsy testing. Something I'd certainly want to do.

So what am I missing guys? Are we on the verge (as an industry) of having fantastic new diagnostic tools that will do more to advance cancer survivability than any new super drug that's come along - or will come along. And, if we are, is PPHM the guy's holding the hole cards? And, if PPHM does have the "goodies", have they done more than look at Ovarian cancer? Given the simplicity of testing, I'm betting they have.

So summing up. I think owning a fast growing high-tech toll processing business is very exciting. In a valuation event I'd expect to get a very high EBITDA multiple on this type of business. Additionally, I truly believe Bavi will find a substantial "niche" in the arena of turning cold tumors into hot tumors. There should be substantial profits that arise from this technology that should dwarf the toll-processing business. Finally, if the exosome test proves to be as attractive as the first data point (Ovarian) suggested, this could prove to be the most significant advancement in the cancer arena to-date! Think about it. Early diagnosis leads to effective management - not life prolongment. And, the test also should effectively reduce substantially the time required to evaluate and test new treatments.

Ok, time to stop. Sorry for the promotion, triple N's. I know I'm over-simplifying. But help me out here. Who looks better in the liquid biopsy space? Who's got the lead horse? I'd really like to know. And yes, I'm open to spreading my investment dollars around.

Back to AACR week. Three biomarkers so far? Neat stuff.

Regards,

WH

[swg_tdr]

WH, thanks, awesome summary for all!

Agree, the Exosome Engine will pull this train to Wall Street early valuation. You are a great wordsmith, along RRdog's missives.

Any one to venture to have their wealthy friends now re-consider, based on this "whole story" including CP's add-on? Some might even bite.

best,
N