Replies to post #141697 on Avid Bioservices Inc (CDMO)

[biopharm]

I still can not understand how someone who can be so smart about so many things is so colossally stupid IMO on the subject of dilution.

Instead of trying to justify managements' decade long persistent use of the ATM to the point of addiction, you should use some of your brilliance to investigate alternate means of finance of which there are many. Write half as many times on alternate means of financing and I will start to take you quite a bit more seriously instead of as just a mgmt apologist. Their way is not the only way.

First... I don't mean to step on CP's feet here in responding-- but RRdog, I am in the camp that there is always a way to think out of the box and always a way to better ones choices and decisions, whether personal, business related..etc and I'd like to hear some of these "other" ways to finance a small biotech--without selling off a portion of the company and/or IP?

But as for Peregrine management and BOD.... I believe that they strongly believed.... that they had the struck gold and found a path to a safer and more effective cancer treatment. I'll forget about the fact that they know now "exactly" how to describe the MOA and lets take all take a step back many years when the anti-PS target was patented by Dr. Philip Thorpe and SK and the structure of a deal was finally in place with Peregrine and UTSWM. Its this very moment in time that one can't possibly say how many trials or how many patients.... or how many indications that they needed to at least reach a point where "someone" else such as Big Pharma knew they had something to make an early partnering deal. This would be 1 way to finance the company and with this path what does Peregrine have to give up ? How much of a percentage would they need to sacrifice in future revenue and ownership of the company if their anti-PS dreams were right on target?? This is the sticking point ...

This is when "MOSTLY ALL" small biotechs would take what they can get early and the question we all have to ask ourselves is "WHY" these small biotechs make deals early on and sacrifice longer term profits? The answer is simple.... they play the odds, just like AF/DD/PC can play the odds and are right most of the time.

Everyone knows now how important and historic the anti-PS targeting is and I believe Peregrine realized this many years ago and maybe they got a little too excited in the beginning (hell, who wouldn't ! ) and good for them that they didn't sell out early on in the development of Bavi and targeting anti-PS which is now known as a "platform".

I think some people are jealous that they can't stake claim to the anti-PS platform.... much like staking claim to developing "Carboplatin" in the UK when hardly no one ever remembers the part where it was born out of the University of Michigan but was simply paid off and raised in the UK. There is no problem with this...as many biotechs or scientists will take the money and allow others take the credit in the history books.

I see a small biotech in Peregrine, that discovered Bavituximab and the anti-PS targeting was born ... and Peregrine management and BOD have clearly no interest in giving it away and why should they? Maybe everyone has a price and maybe they do have a price.... but I'd only call that "creating shareholder value".

We are still back at the question... of since we know Peregrine is holding onto developing Bavi and the anti-PS platform, I ask would they be be "maximizing shareholder value" by selling out early to a Big Pharma with this platform in hand? No way I say.

We know all know the "extreme" Fargo measures that were taken and Fargo like trials.. which CLEARLY tells me that yes, SK and the BOD were absolutely correct when I believe they thought they had control of something ( the anti-PS platform ) that should place them high in the ranks of biotech for drug discovery and research.

Finally... and sorry for the long post, but this is something I feel strongly about-- in that how many Billions of dollars would have "long" shareholders missed out on if at this moment... Peregrine owned only 50% of due to Peregrine doing what all other biotechs do, in selling out to Big Pharma. Then when its finally time for a deal and IF they got 50% of U.S. profits which would be great!... our final percentage is now down to 25% and thats if they were lucky enough....

Lucky enough they found "clear evidence of dose switching" and the biotech world will not stop looking behind their backs... because I believe it was only the tip of the ice berg for what has gone on for quite some time = Big Pharma trying to squeeze every dollar legally and illegally out of any small biotech they want.

So I have no problem with Peregrine squeezing every dollar they can out of Big Pharma at this time.... because I want them to be firm and they must be firm since they have something "every" Big Pharma wishes they had and this deal can only be done once.

156M shares outstanding... one day we will have 1 Billion shares outstanding and holding 1,000 shares will be thought of as pretty lucky for one to have. I believe they are closing in on a deal and Eyebuys words may have been too harsh for some... but I'll easily be taking my shares down till the end because one thing is for sure--- a buyout is how this all ends and I can only relate holding Peregrine stock to possibly the Green Bay Packers or any sports fan that buys stock in their favorite sports team. I can't and shouldn't compare the two though... because "everyone" is affected by a friend of a friend or family member that has to go thru cancer treatment and one a life is at risk vs. just another Sunday football game. My bet is that those holding the cancer stock will completely surprise the Hedge Funds or anyone else trying to take their place at $5 or $10 ... but we all have a price, mine just happens to be much much higher and I say one day we will see those much much higher prices.

To be fair though RRdog... I do agree that selling out to Big Pharma early on "in many drug developments" are the way to go because those are the drugs for one indication..or don't have the impact or novel approach that exists with Peregrine. PPHM has much more in this anti-PS platform and is exactly why possible risks were given the go ahead in Fargo like trials. Someone may have had the bright idea that since Peregrine may not sell out early on.... they may sell out while in crisis mode.... that someone hopefully has a the bright idea to hire a good attorney because Whistle-blowers actually get paid well these days and even FDA Whistle-blowers have a bit more protection these days...

May historic data... bring us historic market caps.

GLTA!

[Protector]

RRDog, thanks.
Good to see you are still following the board.
I missed your posts :)

Every brilliance surely has a component madness. Maybe my madness is the ATM.

On that topic:
I would not be against a good loan, even with Avid as a warranty, if PPHM could negotiate THREE things out of the terms:

- That they are allowed to use the ATM for AT LEAST the amount of the payback of the loan/interest that is open at any given time (=a way so to say to get rid of the banker in an emergency).

- That they are allowed to issue all the needed shares, without ANY needed form of permission by the banker, in case it is within the context of the poison pill. (=avoid disabling the poison pill or making its deployment submitted to the bankers agreement)

- That our IP and pipelines should stay unencumbered. (keeping our hands free for any negotiation).

This would make the loan an acceptable vehicle. Just so that you know I am not blindly against a loan. I am against the loan because I think giving implicit power to the banker is not good in this stage of the company. One never knows under what influence the banker will operate at some point. His self interest will always out-weight the interest of PPHM.

With the above conditions a loan would be acceptable for me.

Of course the best way is upfront-payments of a partnership, sufficient to bring us at the point where licenses or participation start to come in on a regular basis. That would be at least 50Milj$ (rough guess) I think for NSCLC given our current situation and excluding BTD or other factors which are currently in the speculative area.

On the equation ATM dilution vs PPHM value leverage we will probably have different views. At 150Milj outstanding shares, say average of 20$ per share (4$ pre-split) we would be talking about 3Bil$. I think Avid, Bavi, Cotara and all applications around it are certainly worth 3Bilj$ (and actually much more) and we know that management didn't collect 4$ average per share.

So the only remaining question is, suppose we didn't do the last 75Milj shares of ATM would the pipeline then be in its current state of value? 75Milj loan (suppose that we would have got it) payback plus interest and STILL some time to go before income. Would we have made it. On what basis would we have received such a loan! Whit what income would we have paid back?

We would end up with encumbering our IP and pipeline to pay back the loan, because I see no other revenue, and I am sure that some BP would have come over the bridge because there are people out there that do understand what PPHM has but they would have grabbed every occasion to get it cheap. I know you have provided several very creative ways of financing in the past and I know they ALL would work. Using deals around Cotara as the financing vehicle for instance (and I think that one is being implemented and close to conclusion).

There is that balance between getting X with risk Y and getting X-z with risk Y-w where w>z. If the ATM would turn out to give us X-z then the price for loosing z is the decreased risk and the increase of the chance to realize X-z versus BK or X+huge z.

Question is what in the end brings the most into the shareholders pocket in a quite sure way. It is my believe that it is the ATM, then followed by a favorite termed loan and then, and only then, when there is no more other solution, bread crumbing the IP/pipelines, preferably only partially (e.g.: Cotara).

In that last option it is my fear that we may not see the real potential of the parts that could be used for such deals. Digital Imaging may seem marginal at this point but could well become the most lucrative Bavi application of all. It is hard to say, because for the same effort it will remain a memory of very nice pictures of Doctor Thorpe's mice and it never becomes anything in human application because we can't get it approved. (this was just an example, I do believe we'll get Dig. Img approved).

Is this believe correct? Not necessarily, hence it is my personal opinion.