Good morning Bio. It has been a while since I did one of my long posts sharing my opinions here, but it seems timely to play a bit of the historian role and weigh in current potential for Avid sales growth. Those who have not been long investors in TCLN/PPHM/AVID likely won't care about the perspective I bring forward, but here goes.
Regarding suppressed valuation of PPHM technology as PPHM became AVID, there is little doubt that shareholders have experienced an agenda driven orchestration to lift control of the company from the old BODs to the new. Why little doubt? Investors voted their shares to authorize just that sort of change after being subjected to much claiming of old management incompetence and PPHM tech having questionable value. We can observe that the initial Avid facility purpose for producing product to support PPHM trials and selling surplus mabufacturing capacity to produce product for a few customers on the side has now been positioned to be the primary enterprise for which shareholders are invested. Avid the side activity emerged as Avid the potential profit maker as production capacity expansion was deployed and PPHM was apparently being rebuffed with their attempts to entice a large Pharma to commit resources.
Oncologie appears to be a created entity for facilitating such technology rights transfers and sure enough, PPHM tech rights now reside there, along with a progress payment schedule to bring value back to Avid if Oncologie ever reaches milestones. But none of this is "within my expertise". I recognize my investing is as a situation taker, where there needs to be trust that the new BODs that are guiding the Avid Mabufacturing company growth will also have provided for appropriate value participation for Avid investors as the PPHM technology is groomed by "third party interests". Is such trust warranted going forward? I hope so.... but how can I know but for the delivery of results?
Bio, you are outlining why the aggregate of downside to Pharma through financial impacts if their "ox gets gored" due to release of PS targeting and biomarker technology that becomes mainstream for patient treatments and displaces current treatments. In turn, it is not unreasonable to project that the Pharma existing sales downside can outweigh the perceived valuation basis for the technology to the shareholders of the company (PPHM) that holds the tech rights. Never mind that this tech was funded by long investors (and others) through various trials to the state of development it was in when certain rights were transferred to Oncologie in exchange for future consideration if there are profits or milestones met.
Being pragmatic, and perhaps a lot naive, I don't see there being a collaboration of Pharma companies being out there that would conspire to place the PS targeting tech on the shelf, just as a means to help keep their approved pharma drugs in the realm of delivering them profits. Why? Those same Pharma, individually, ought to be able to glean far greater profits by acquiring the tech rights from PPHM, even if there might be some Pharma negotiators that would lament that the old BOD were simply insisting on too large a piece of the profits pie.
I can't help but think of using an analogy to the closing scene of that movie "Blood Diamond" where that company assistant guy places the special blue diamond that brought death to many who wanted to possess it into a vault that contains other such valuable diamonds that would disrupt the diamond markets bread and butter sales for jewelry if released to market. That was a great movie and I suppose that industry controls supply and demand to help prop up pricing at healthy levels, IMO, but I just can't see the parallel being a fit to PPHM's phosphatidylserine (PS) targeting technology rights being put on the shelf so Pharma as we know it can go about its business. As a side note, a was surprised that my Google spell check for PS offered several vitamin supplement versions of PS to be taken to improve cognitive skills!?! The vitamin advertising description of what PS is and what it does was amusing, to me at least. The theme of targeting "inside out" PS as was one of the major developments from Dr. Thorpe's research efforts, was not in play there, not even close. Rather, the plug was to put more PS into the diet for whatever benefits are being claimed. Biomarker technology is understood by few, it would seem.
Regarding $40 pps being "easy", I can't help but note that the two reverse splits that were implemented while I have owned TCLN/PPHM/AVID shares make a 5 x 7 = $35 per share multiplier and that the company was fighting against hedge fund and short interests to retain the $1 pps needed to avoid NASDAQ delisting those many years back, just a year or two after many shareholders may have acquired shares during the period when the pre double RS share price had run up to $16+. Of course, I know you know this, as well, but history does affirm how a move of the current pps to $40 would simply be placing some of those earlier share purchases in that pre double reverse split era of $1 to $16 per share (translate to $35 to $560 pps!!) at the low end of break even.
That was then. This is now. Now we have Avid increasing their sales in a Pharma mabufacturing industry that would realistically provide a 4 to 6 price to sales ratio for a company that has not been shunting their profits to pharma development research and trials, as is now supposed to be the case after Ronin and crew stepped forward as the instrument for ousting the old BODs.
If we use the 6 price to sales ratio, figure 50 million shares outstanding and consider annual sales projected at just under $60 million, (perhaps high side of the range we heard in Monday's investor call from Avid, but easier round off math), the imputed share price now ought to be around $7. That is a "right now" valuation for when profits are not being bled off to pay for the mop up of the PPHM trials and tech research, not a maybe later valuation, if a 6 Price to Sales Ratio is considered valid. Using the 4 price to sales ratio, the right now valuation might be about $5 pps. Interesting, that is the "brand new" trading range for AVID after Monday's cc affirmed the financial stats posted for the last year and the projected sales for the next fiscal year. Of course, absent news of new customer sales, we might expect short interests to erode the pps as has happened multiple times. In effect, the tech that went to the caring hands of Oncologie to develop appears to be receiving no consideration at all in the AVID share price.
My point? The reality check shows that pps growth is now tracked to align with Avid annual sales growth and the tech valuation has been shunted to the sidelines awaiting third parties associated with Oncologie to send Avid money, if that will ever happen. I am VERY disappointed by the outcome of the PPHM tech development that emerged over the last year and don't know if Avid experienced a "Blood Diamond" sort of tabling of tech. But I am still invested because I understand the AVID sales growth potential dynamic, know that Avid capacity is still under utilized and that expansion capabilities supporting sales four fold or greater levels than now can occur over the next few years. Where are the new customers? We need to wait. Perhaps, a two year outlook for a double or more of the pps is not unreasonable, perhaps Avid is negotiating to deliver such sales growth tomorrow. We don't get to know until if and when that happens.
With my cost averaging that included shares purchased at half of today's trading range on up to now embarrassingly high pps levels (LOL!), I am still positioned to turn an overall cost average profit through AVID if the new BODs reasonably deliver on their business plan goals over the next year or two. What a remarkable and stressful dynamic long time investors here have had to experience.
Best wishes and IMO.
KT
News 
Market Data 
Discover 
AI
