Ozbiotans

Apologies for the delay, but the truth is there has been little to report.

In fact, nothing to report is the theme for this post.

So far, this influenza season has been very slow. This should have been expected after last year's severe season, both here and in the northern hemisphere. This means that the recently reported commencement to LANI trials have picked the wrong year. My general guess, and there's no science to this, is that the severity of the epidemic not only affects numbers of infected people, but the severity of individual cases might also be affected. This is important in the context of the outcomes of the clinical studies: LANI will show the most improvement over placebo where the disease is at its most severe. In my view, the use of neuraminidase inhibitors is at its most effective in, or just before, ICU.

By the way, what ever happened to randomised trials of neuraminidase inhibitors in patients admitted to ICU with influenza? In all likelihood it's probably an unethical study now, but it would be worthwhile addition to the evidence for NI.

So, likely less Inavir sales next winter from Japan.

Nothing to report from the company either. Commencing LANI trials is a meaningless release. Not commencing them would be news.

No news is good news? No, it isn't. The market has been savage to BOTA: it is now at it's lows, with little support. Again BOTA didn't benefit from the general uplift in stocks through Jan-May, but fell when the Nasdaq fell.

The big problem is that it starts to become what it looks like: an underpriced cashbox with a single lucrative grant for a single marketable product.

I treat my contacts with other shareholders in strict confidence. However, I think I can make an exception for non-contact. So, my recent effort to discuss Ozbiota and our company with Hunter Hall has failed to generate a response. Hunter Hall have bigger problems with a very large redemption of funds (8%) called on them. This might put some selling pressure on their stocks, although they would be taking big losses on BOTA of they tried unloading on (or off) market right now.


The point I made to them? What impressed me with the activism by NABI institutional shareholders around the reverse merger was that what was good for the big shareholders was good for small shareholders. If a big holder thinks it can make gains at the expense of their smaller holders, they can - but it shrinks the pie for everyone. Institutions will do best when they do the right thing for all shareholders.

So, let's wait for the EOFY statements. Or any other statements. Or occasional signs of life.

If you know any other BOTA shareholders, ask them to email me at: ozbiotaATgmail.com- join up.

Regards

The A$ helps our cause

Well, Ozbiotans, the only news to report is that there has been a lift in value for Australian shareholders of BOTA. The exchange rate of about 1.02 was used in the merger, and we are back at 0.96. The devaluation of the A$ has helped the valuation significantly over the last 2 weeks, and there may be a little more to come.

Although I voted against the takeover, I thought the exchange rate play was the only advantage, and Jim Fox made that point at the oddly uncontrolled last EGM. 

But, in the end it was a frankly crazy way to get exposure to a forex play. 

In the unlikely event that the Aussie dollar sinks to 50 cents US, we need another strategy. The SP is struggling at historic lows.

AAGM

The number of shares linked to Ozbiota is now well above 1%.

My intention is to hold an AAGM (Australian Alternative General Meeting) after the end year results are announced in July or early August. It will be in Melbourne. By then we should have the results, and a little more news to digest.

Between the results and the meeting I'll write to the Chairman, requesting a discussion regarding the company. 

I'll also invite along some Biota experts to the AAGM meeting to help broaden the discussions. But the meeting will rely on your participation. I know that's not why most people buy shares, but for all the reasons outlined before, it helps all of us who are long BOTA to act outside the square.

Valuation of the Company

With the strategic review done, the valuation on the company has fewer components. 

Hep C, and the gram positive program, are both valued to zero.

Relenza is dead and should be valued at zero.

Vapendavir has a significant cloud over it, and probably needs to be valued at zero for now.

The ex NABI compounds have no discernible value.


That leaves: GYRASE (gram negative program); RSV (but a new lead candidate); and LANI ROW and INAVIR in Japan. 

The gyrase progam has some legs and hopefully will produce a deal. But valuation is difficult.

The patent life left on INAVIR is maybe 8-10 years, so possibly a $20 million valuation would be reasonable.

Again, it highlights the importance of a ROW deal for LANI. The market (and we) get some idea of the value of our company. The combination of seasonal and stockpile sales could reach 50% of tamiflu's market. While that's a fair assumption, it's difficult to assume that BOTA will earn 96% of that share of the income. Margins can be calculated then.

Without that royalty figure, the valuation is open to violent after shocks. 

And I think that's why the market is avoiding it.