The Voice

We all got to hear the first words from the CEO of Biota during the presentation to JMP Securities' health conference early Thursday morning. It was a relief to finally hear the crackle of etalk about our company. Go to the company site and listen. I had trouble opening it, but clicking on the adobe flash option at the bottom finally worked for me.

A few thoughts.

He sounded a bit nervous, which I wasn't expecting.

To "old" shareholders there was very little new in the presentation. In fact, very little has changed in 2 years. That's not encouraging, but is to be expected when the executives have 70 million in the bank. Where's the rush, huh?

He did talk about the seasonal influenza market, something Mr Cook (the previous CEO) rarely did. Cook felt that a stockpile order every 10 years would be somehow enough. 

He mentioned reducing cash burn to 5 million per annum, with a later goal of royalties matching expenditures. That was great news, but since royalties are lumpy, it's tough to call. The 7% margin on the BARDA contract is constant however: theoretically that's 16 million over 5 years. Nevertheless it's the first time cost control has been a focus for the executives, who liked to spend. Which is why we're in Nasdaq. Which if they didn't spend so much on the ASX, ah, chasing my tail gives me a view of my backside.

While we're on BARDA there was lots of interest in BARDA procurement and in BARDA fast tracking approval. Ultimately it's the FDA who calls those shots, and even in the case of an emergency, FDA would still be the arbiter in my view. These issues aren't worthy of including in any analysis.

Sadly, the earliest Phase 3 trials can start is the northern winter of 2015. We will hear about the Phase 2 in about a year's time. Time flies when you're on a patent clock and the disease comes around but once a year. I don't actually understand why, if Australia, Sth Africa and Sth America are all legitimate places to conduct clinical trials for the FDA, that the extensive Japanese clinical program is excluded?

Mr. Plumb spoke about looking to buy in other clinical assets, presumably ones that are in, or close to, market. But good assets are expensive, BOTA has only 60 million to spend, and the share price is too terrible to contemplate a raising.

Vapendavir is stalled while they look at other target risk markets. Which ones? Post transplant? Different diseases other than asthma?

He's right about oral versions of relenza: developers will need a complete and new clinical trials program because approvals are for the inhaled product. It will cost hundreds of millions to get approval for a molecule that is essentially generic. And you would be nuts to make a diskhaler with relenza in it. Glaxo were.

One last little point: early in the presentation he introduced the company as having a licence to develop LANI in non-Japan markets.

Um, I'm not sure that's strictly correct. BOTA are the co-owners of laninimavir with Daiichi Sankyo. There is no licence for non-Japan yet, as I understand it. And that leads me to the questions that weren't asked...

And there were plenty. This was a greenfield audience. The questions were fairly weak, and seemed to come mostly from the same one or two people. I got pretty irritated that it took so long to point out  that Phase 3 was already paid for by BARDA. They nearly didn't!

Nothing about the BOTA royalty split with DS in non-Japan.

Nothing about doing research in Australia and business in the US.

And not much for current shareholders. The US move has resulted in no other business development (obvious to the outside) for 2 years.

June 30 accounts should be out soon. There seemed nothing on the horizon that would create any value.

The analysts know that it's a 100 million dollar company with 70 million in the bank losing 5 million a year.

What did you think?