The volume of shares recently traded in Biota is unusually high. Also, the trading is lumpy. The share price has increased, at times hitting 2.80 before settling back again.
US trading is notoriously opaque, so the market is none the wiser. Whether its new entrants, or holders adding or selling we really don't know until the end of quarter reporting and that's 6 weeks delayed. Apparently the high frequency trading skills don't extend to high frequency reporting.
It looks to be a nasty northern hemisphere influenza season. And the CDC is (rightly in my view) recommending early antiviral treatment.
But seasonal sales of relenza always disappoint. There is no marketing, poor stocking, and so sales are minimal. Other than a surprise Japanese stockpiling order early in the year, I don't expect much from relenza sales the rest of the FY. So, that can't explain it.
Inavir sales for this winter won't be reported until full years results in May.
And we know the R&D calendar is set way back.
Any end of FY rebalancing shouldn't have continued into the first week of the new year, and it has.
And, a BARDA settlement would be just cash, which is great, but a one-off.
So, I can only speculate this level of activity is a balance between large holders wanting out, and someone else confident of, or planning, corporate activity. It's a level of turnover that's just too high to be normal. And, I'm a firm believer that unexplained share movements always have an (eventual) explanation.
Saturday, 10 January 2015
Monday, 29 December 2014
2014 has been another disastrous year for Biota.
Over the last month or so, we've seen someone unwinding their major position/s on market. Significant lumpy tranches of shares have traded on a relatively frequent basis, with little else happening in between. Obviously, someone is on the other end of those trades. Hopefully, there is consolidation happening with an activist fund taking the running.
Going through the recent quarter results leaves a few questions.
1. The
Company spent $5 million in the quarter on VAP development. They indicated no
result of this Phase 2b likely until mid 2016. Without a fixed budget estimate
from the company, it’s reasonable to assume therefore that VAP Phase 2b
development will cost $25-30 million over the next 18 months.
2. The
company spent $2.4 million in general and administrative expenses, with a 100k
increase recorded over last quarter. Looking forward, the annualised
expenditure will be $9-10 million. The company previously announced that it
would seek to closely align internal overhead costs with anticipated royalty
revenues. It doesn’t seem possible. My most optimisitic estimate is BTA will
earn 4 million pa, and that’s assuming the negative LANI trial
results doesn’t have an impact in Japan.
3. The
cash burn approximates anywhere from 20-30 million per annum. A settlement with BARDA would modify that assumption.
4. The company
previously announced an aim of 20 internal employees. Why does a company with
20 employees need 7 directors?
5. Biota
sold its antibacterial program during the past quarter to TAXIS without an announcement. What were the terms for
that divestment? Free to a good home? Cubist is being acquired for similar compounds.
6. Further,
regarding VAP, without a rapid rhinovirus diagnostic:
1. Phase
3 trials will be long, and expensive; and
2. FDA
expert clinical subcommittees will not look favourably on it. If they limit
registration to PCR proven rhinovirus in asthma, it will have limited value.
No partnering deal was made as a result of the first
(apparently successful) VAP trial, implying there was no value in that compound
with Big Pharma, or that Biota management were hubristic and held out for more than they would ever be offered.
If the company spends another 30 million on its development,
that will bring total expenditure on the program to nearly 50 million.
Why is it better to spend 50 million than 20 million on a
compound that has no expressed Pharma interest?
No-one has (ever) explained if there is actual Pharma
interest in this (BOTA’s) VAP program and at what value that sits.
Given cash value is the only thing supporting the share
price, it can only follow that if expenditures continue at the current rate,
the share price will be 30-40% less than its current price in 12 months.
The Board hasn’t explained why the current plan will deliver outcomes. It is
far riskier than LANI, which was also pursued without a partnership deal in
place. We’ve seen the implications of that. If VAP isn’t partnered, and it
fails, the company will be decimated.
The market’s current view is that
the only possible salvation for shareholders is through partnering or merging.
The company talked about both at the full year results, but neither were raised
with the recent results. This company must partner VAP, or LANI, or RSV or if not
merge the company while it still has assets.
Hopefully there is a major shareholder out there who agrees, or better yet, has a better plan. The Company should know that the still significant Australian shareholder base will not support it if it comes to a proxy fight.
Wednesday, 1 October 2014
Well, now there's something to talk about
Biota has announced it corporate update and 2014 year results. And board and management changes. And some guidance on strategy.
Very cheeky of Biota to seek an extension to the Relenza patent. Hopefully it succeeds, but both GSK and the USPTO will make it very difficult. This company finds it hard to catch a break, so on form it shouldn't be expected.
The generally positive sub-outcomes reported on the Igloo trial are interesting. Even the positive data on the smaller studies, including asthmatics. The combination data approach is worth taking. But the news on discussions with FDA on the Igloo trial and the future of LANI are no guarantee of anything. Problem for the FDA is that there is already pressure on the regulators about the quality of data behind registration of NIs. My reading is that Daiichi, who have suddenly become our partner again, are the only buyer for LANI. The comments about uncertainty around the ROW contract if the marketer is not a third party were initially referenced to Biota being the marketer, and now its clearly (in my view) directed at DS's role. DS have an interest in protecting LANI's reputation. All this would have been better avoided by using the same outcome instruments used by relenza and tamiflu.
Vapendavir has tested its new formulation, but has decided to proceed with the original formulation for the current Phase 2 trial. The new tab formulation will be used for subsequent trials after some enhancement to get more than 60% bioavailability of the original. The new formulation gives them a fresher patent, and thus a longer patent life.
Large institutions seem to have obtained the resignation or demotion of Mr. Fox and Mr. Plumb, as well as the withdrawal of some stock options, and renewed vigour for M&A. It's not clear what executive function Mr. Plumb will retain, but he is the Executive Chairman. Mr. Fox seems to have been given charge of finalising the BARDA extraction. We wonder which institutions were at that meeting.
Mr. Patti is talking up M&A. I guess the company has its cash reserves, unclaimed tax credits in Australia and UK, vapendavir in Phase 2, possibly RSV in IND, and a small residual on LANI (and an even smaller residual on relenza). M&A is the only method to recoup share value. I and other shareholders at our drinks event yesterday thought that it was not likely that the company would seriously pursue VAP as it's reason to continue as a stand alone company. His comments were, to our ears, fairly pointed about M&A.
It's hard to speculate where the merger interest will come from. However, a lot of cash poor speculative companies would love the cash pile. We'd prefer bigger companies with a good record.
Possibly after finalisation of a merger, Mr. Plumb and Fox and many of the rest of the Board will resign. There are, by my count, still 8 board members, if I assume Joe Patti will be on the board to replace Mr. Hill. That's quite a lot, for a company soon to have 20 employees on the direct payroll.
These things will take some time to pan out. No merger will be finalised until the FDA says something about LANI (determining how much DS will throw in the hat), BARDA is finalised, and Melbourne is completely shut down. So, another long wait until mid 2015, I guess.
It still causes us to shake our heads over a beer, while we count our losses. Right now though, our interests are shackled to the larger holders, because there is no market for us to sell into, much less them.
Thanks to those of you there last night.
Very cheeky of Biota to seek an extension to the Relenza patent. Hopefully it succeeds, but both GSK and the USPTO will make it very difficult. This company finds it hard to catch a break, so on form it shouldn't be expected.
The generally positive sub-outcomes reported on the Igloo trial are interesting. Even the positive data on the smaller studies, including asthmatics. The combination data approach is worth taking. But the news on discussions with FDA on the Igloo trial and the future of LANI are no guarantee of anything. Problem for the FDA is that there is already pressure on the regulators about the quality of data behind registration of NIs. My reading is that Daiichi, who have suddenly become our partner again, are the only buyer for LANI. The comments about uncertainty around the ROW contract if the marketer is not a third party were initially referenced to Biota being the marketer, and now its clearly (in my view) directed at DS's role. DS have an interest in protecting LANI's reputation. All this would have been better avoided by using the same outcome instruments used by relenza and tamiflu.
Vapendavir has tested its new formulation, but has decided to proceed with the original formulation for the current Phase 2 trial. The new tab formulation will be used for subsequent trials after some enhancement to get more than 60% bioavailability of the original. The new formulation gives them a fresher patent, and thus a longer patent life.
Large institutions seem to have obtained the resignation or demotion of Mr. Fox and Mr. Plumb, as well as the withdrawal of some stock options, and renewed vigour for M&A. It's not clear what executive function Mr. Plumb will retain, but he is the Executive Chairman. Mr. Fox seems to have been given charge of finalising the BARDA extraction. We wonder which institutions were at that meeting.
Mr. Patti is talking up M&A. I guess the company has its cash reserves, unclaimed tax credits in Australia and UK, vapendavir in Phase 2, possibly RSV in IND, and a small residual on LANI (and an even smaller residual on relenza). M&A is the only method to recoup share value. I and other shareholders at our drinks event yesterday thought that it was not likely that the company would seriously pursue VAP as it's reason to continue as a stand alone company. His comments were, to our ears, fairly pointed about M&A.
It's hard to speculate where the merger interest will come from. However, a lot of cash poor speculative companies would love the cash pile. We'd prefer bigger companies with a good record.
Possibly after finalisation of a merger, Mr. Plumb and Fox and many of the rest of the Board will resign. There are, by my count, still 8 board members, if I assume Joe Patti will be on the board to replace Mr. Hill. That's quite a lot, for a company soon to have 20 employees on the direct payroll.
These things will take some time to pan out. No merger will be finalised until the FDA says something about LANI (determining how much DS will throw in the hat), BARDA is finalised, and Melbourne is completely shut down. So, another long wait until mid 2015, I guess.
It still causes us to shake our heads over a beer, while we count our losses. Right now though, our interests are shackled to the larger holders, because there is no market for us to sell into, much less them.
Thanks to those of you there last night.
Thursday, 18 September 2014
OzBiota drinks
The Company will be offering some form of update on September 26.
I would like to invite anyone with an interest in Biota to drinks on Tuesday 30 September at 6pm.
I thought we could meet at the Market Lane Bar, which is apparently inside the Rialto Melbourne Intercontinental Hotel (495 Collins St)., the site of many previous Biota management presentations. Remember those presentations? All complete nonsense, an odd combination of deception, self or otherwise, and incompetence.
So, it's fitting to meet there without management.
It will be quite informal, so no agenda or presentations. I haven't even booked a table. Hopefully, the company update on 26th will give us something to talk about.
I will bring along a little sign. Come along, if only to save me from being the sad lonely little man sitting and drinking at a small table with a weird sign saying 'Biota'.
I would like to invite anyone with an interest in Biota to drinks on Tuesday 30 September at 6pm.
I thought we could meet at the Market Lane Bar, which is apparently inside the Rialto Melbourne Intercontinental Hotel (495 Collins St)., the site of many previous Biota management presentations. Remember those presentations? All complete nonsense, an odd combination of deception, self or otherwise, and incompetence.
So, it's fitting to meet there without management.
It will be quite informal, so no agenda or presentations. I haven't even booked a table. Hopefully, the company update on 26th will give us something to talk about.
I will bring along a little sign. Come along, if only to save me from being the sad lonely little man sitting and drinking at a small table with a weird sign saying 'Biota'.
Wednesday, 20 August 2014
Nup-date
It's interesting that in the aftermath of the BARDA stop work and cancellation of contract, some funds and institutions were buyers. How do you figure that? In fact, aside from a couple of major holders selling out/down, the impact at that point seemed controlled.
It will take another three months, alas, to discover the damage to the register caused by the IGLOO trial failure. While Broadfin has bought since then, the selling might have been curtailed by the fact that the stock is so unknown and illiquid that they couldn't sell for cash backing. So they held. Welcome to our little club.
I wonder if BARDA will now feel obliged to offer any compensation for cancellation of the contract, given the Phase 2 result.
Well, the rest is conjecture, and because there is such an information vacuum at present, we'd be just whistling in the wind.
Jim Fox has taken over chairmanship of Genmark Diagnostics. It's a maker of diagnostic PCR tests, with a strong Australian background. Does PCR for influenza and HRV as a matter of fact, but hardly a portable device. A half a billion dollar company, Nasdaq listed.
In case anyone local reads this, I'm planning a Melbourne based Ozbiota shareholders (classy) pub meeting in September. Sorrow drowning, at least. More details later.
It will take another three months, alas, to discover the damage to the register caused by the IGLOO trial failure. While Broadfin has bought since then, the selling might have been curtailed by the fact that the stock is so unknown and illiquid that they couldn't sell for cash backing. So they held. Welcome to our little club.
I wonder if BARDA will now feel obliged to offer any compensation for cancellation of the contract, given the Phase 2 result.
Well, the rest is conjecture, and because there is such an information vacuum at present, we'd be just whistling in the wind.
Jim Fox has taken over chairmanship of Genmark Diagnostics. It's a maker of diagnostic PCR tests, with a strong Australian background. Does PCR for influenza and HRV as a matter of fact, but hardly a portable device. A half a billion dollar company, Nasdaq listed.
In case anyone local reads this, I'm planning a Melbourne based Ozbiota shareholders (classy) pub meeting in September. Sorrow drowning, at least. More details later.
Sunday, 3 August 2014
Flu-iiQ and you
It's interesting that symptom relief has been at the centre of many influenza trials. Because for many other drugs, it isn't. Influenza seems to have been selected out for special attention in this regard: whether it's the company's own marketing departments who want it, or whether the FDA directs it, I don't know.
For most other infectious diseases, hard outcomes are usually preferred. If I wanted to trial a new antibiotic to treat pneumonia, I'd look at fever, pulse , BP, respiratory rate, changes in blood counts, days in hospital, days off work and serious morbidity and mortality. We aren't usually that interested in whether the cough is still troublesome, or your muscles still hurt a bit or whether your appetite has returned or not. Those are subjective and less helpful in determining effectiveness.
If I was to apply hard outcomes to influenza trials they might be:
time till fever resolves
time to pulse, BP improves
time till bloods improve
(perhaps) days off work (although this is also subjective in many ways)
complication rates, including hospitalisation
mortality
Here is the paper introducing the Flu-iiQ test. It was published in May 2011 and sponsored by MSD. The paper, with its validation, was published just before the LANI trials started.
http://www.valueinhealthjournal.com/article/S1098-3015%2811%2900107-0/fulltext
It would be interesting to know where else this instrument has been used - because I can find only 1 reference in Pub Med to a paper looking at patient reported symptoms in Hep C.
By using soft data, like patient reported outcomes, rather than hard data, like objective clinical measurements, you are subject to the validity of the instrument.
It looks like Flu-iiQ is so new that it has not been used in significant studies. Before Biota's. Let me know if I'm incorrect.
Also, given other NIs trials didn't use it, it's hard to make comparisons between them.
Did Biota scientists select it? Did Barda? Why use it? This is the small stuff that needs sweat.
Well, it needs sweat before it's implemented. Too late now.
It's ironic that in his previous job Russell Plumb sold a compound for a lot of money that subsequently failed, and in this job he was handed a compound that failed and cost his company a lot of money.
It's hard to see a way forward. BOTA is a cashbox now, but 80 million buys very little in this still overvalued biotech market. And in any event, they didn't want to wade back into early stage compounds, which is really all they can afford. They can't fund a phase 3, and could only manage a straightforward Phase 2 depending on the patient population. But on the other hand, this company changes major strategy every 2 years, so nothing decided last year is worth anything.
In my experience managements with this much cash hold on tight. It's a decade of salaries. It's hard to know how these directors will handle shareholder pressure, but remember a big proportion are still you and me and we are invisible to them. It's so reminescent of NABI that it's almost eerie. I was kidding a few posts back about being the subject of a backdoor listing, but it's as likely as any other outcome right now.
Vapendavir and RSV are poor reasons at best for them to continue as a stand alone company. The new management team looked very unfavourably on VAP initially. The change of heart comes from having no plan B, or maybe someone in pharma told them they were interested. But neither have strong cases at present. VAP outcomes are all about symptoms in a subset of common colds, although asthma does come with some hard outcomes.
I guess it does offer something in addition to the cash that might let them give back what the funds paid in the capital raising in January.
Generic relenza? Not if the generic needs to be supplied in a rotahaler.Waste of time.
LANI is Daiichi's drug. But they never showed the slightest interest in ROW deals (or at least, none that Biota ever disclosed), so it's unclear they would bother or care now, except that government pressure may be brought to bear in Japan to account for this trial result.
Boy, what a mess.
Problem is there isn't a lot of faith in the large number of Directors gathered at the table. Management does have time and some money, but not enough of either to waste.
For most other infectious diseases, hard outcomes are usually preferred. If I wanted to trial a new antibiotic to treat pneumonia, I'd look at fever, pulse , BP, respiratory rate, changes in blood counts, days in hospital, days off work and serious morbidity and mortality. We aren't usually that interested in whether the cough is still troublesome, or your muscles still hurt a bit or whether your appetite has returned or not. Those are subjective and less helpful in determining effectiveness.
If I was to apply hard outcomes to influenza trials they might be:
time till fever resolves
time to pulse, BP improves
time till bloods improve
(perhaps) days off work (although this is also subjective in many ways)
complication rates, including hospitalisation
mortality
Here is the paper introducing the Flu-iiQ test. It was published in May 2011 and sponsored by MSD. The paper, with its validation, was published just before the LANI trials started.
http://www.valueinhealthjournal.com/article/S1098-3015%2811%2900107-0/fulltext
It would be interesting to know where else this instrument has been used - because I can find only 1 reference in Pub Med to a paper looking at patient reported symptoms in Hep C.
By using soft data, like patient reported outcomes, rather than hard data, like objective clinical measurements, you are subject to the validity of the instrument.
It looks like Flu-iiQ is so new that it has not been used in significant studies. Before Biota's. Let me know if I'm incorrect.
Also, given other NIs trials didn't use it, it's hard to make comparisons between them.
Did Biota scientists select it? Did Barda? Why use it? This is the small stuff that needs sweat.
Well, it needs sweat before it's implemented. Too late now.
It's ironic that in his previous job Russell Plumb sold a compound for a lot of money that subsequently failed, and in this job he was handed a compound that failed and cost his company a lot of money.
It's hard to see a way forward. BOTA is a cashbox now, but 80 million buys very little in this still overvalued biotech market. And in any event, they didn't want to wade back into early stage compounds, which is really all they can afford. They can't fund a phase 3, and could only manage a straightforward Phase 2 depending on the patient population. But on the other hand, this company changes major strategy every 2 years, so nothing decided last year is worth anything.
In my experience managements with this much cash hold on tight. It's a decade of salaries. It's hard to know how these directors will handle shareholder pressure, but remember a big proportion are still you and me and we are invisible to them. It's so reminescent of NABI that it's almost eerie. I was kidding a few posts back about being the subject of a backdoor listing, but it's as likely as any other outcome right now.
Vapendavir and RSV are poor reasons at best for them to continue as a stand alone company. The new management team looked very unfavourably on VAP initially. The change of heart comes from having no plan B, or maybe someone in pharma told them they were interested. But neither have strong cases at present. VAP outcomes are all about symptoms in a subset of common colds, although asthma does come with some hard outcomes.
I guess it does offer something in addition to the cash that might let them give back what the funds paid in the capital raising in January.
Generic relenza? Not if the generic needs to be supplied in a rotahaler.Waste of time.
LANI is Daiichi's drug. But they never showed the slightest interest in ROW deals (or at least, none that Biota ever disclosed), so it's unclear they would bother or care now, except that government pressure may be brought to bear in Japan to account for this trial result.
Boy, what a mess.
Problem is there isn't a lot of faith in the large number of Directors gathered at the table. Management does have time and some money, but not enough of either to waste.
Friday, 1 August 2014
Goodbye LANI
well, I'm surprised by today's announcement that LANI's Phase 2b trial showed no improvement in symptom relief in influenza.
actually, stunned.
the impact on viral shedding was demonstrated
I'm not certain if the low recruitment numbers was the main issue
I will need to look at the instrument chosen to measure the outcome, but it's too late anyway.
this is a severe blow.
my guess is somehow BARDA knew this was the case and pulled the grant.
and announced at the beginning of a little bear market..I hate to think what the SP will finish at today
where does this poor company go? It really has few options. I'll think more before I write anything.
Once again, though, we should have made a deal the day after the BARDA grant was announced. That milk is spilling everywhere
actually, stunned.
the impact on viral shedding was demonstrated
I'm not certain if the low recruitment numbers was the main issue
I will need to look at the instrument chosen to measure the outcome, but it's too late anyway.
this is a severe blow.
my guess is somehow BARDA knew this was the case and pulled the grant.
and announced at the beginning of a little bear market..I hate to think what the SP will finish at today
where does this poor company go? It really has few options. I'll think more before I write anything.
Once again, though, we should have made a deal the day after the BARDA grant was announced. That milk is spilling everywhere
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