Jake, frustration seems to me to be best directed at the lack of information that correctly contexts what PPHM unrealized shareholder value might tally up to. Part of the uncertainty can be explained because trials are underway and it is premature for PPHM to release data. That is not always the case though.
For example, Paul Lytle signaled last year that Avid may soon be generating enough revenue to fully cover PPHM working capital needs. Now, at the end of 2006, we find out Halozyme has contracted with Avid for up to 20 production runs per year for a five year period. Does that mean Avid is on the brink of delivering such core funding for PPHM, relieving their need for other mechanisms for raising funds? Shareholders don't know. Consequently, the prospect of 100 Avid production runs over the next five years is greeted with a "ho hum" market response. What is the cash flow involved with a production run? Most investors don't know that. It strikes me as somewhat unrealistic that PPHM could clear the $1 million plus per run that would be needed for 100 runs over five years to support PPHM funding needs. What is a realistic per run net revenue for a Halozyme, Avid contract run? Could the contract deliver half of PPHM funding needs? A quarter? 2X, LOL?
Another example is the significance of the PPHM collaboration with the Tribody technology. What does it mean that Bavi and other PPHM products might be attached to other cotreatment products in this manner? We don't know anything beyond what speculation about next generation PPHM treatments might involve.
Yet another example is PPHM's conference call that identified four or five areas for new trials being planned for prospective 2007 initiation. Shareholders are left with speculation as to whether the planning for followup trials should be presumed to mean that the ongoing trials for Bavi anti cancer and anti viral are showing good efficacy and safety. And where will the funding come from? During the conference call PPHM said the trials are not all that expensive to do. What does that mean?
Finally, PPHM says they are good to go with funding through August 2007 but are planning a shelf registration in first half 2006, just in case they need it and to leverage better financing terms. If PPHM pursues the go it alone approach and tracks along like Vertex or Imclone's business plan, where a future deal releases shareholder value of products developed through Phase 2, Phase 3 trials, it could be late 2007 before shareholders get a good sense as to whether that plan is going to deliver and maybe 2008+ for a deal closure.
I am prepared for the prospect that repeat dose Bavi trials come in successful and PPHM continues to attempt self funding at least through the start of the next round of new trials. Maybe the Halozyme contract award will prove to be a big deal, but it will likely be at least two quarterly reports out from now before shareholders get a sense of what the contract means for PPHM revenue. Unless, of course, PPHM management chooses to enlighten their investors with that sort of information.
I still prefer that PPHM pursue the go it alone approach while building value if the alternative is to sell off Bavi and Cotara at an unreasonable discount. It is unrealistic to expect shareholders will get to know what is being offered for PPHM products at this point. I can wait another year or two, if need be, to give PPHM time to play out its business plan, but I am not happy about the prospect. Maybe that is why I picked up some more shares yesterday, LOL?
Best wishes and IMO.
KT
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