Capital raising Part 2

This secondary offer got away without a glitch.

No, I didn't get an allocation. Just a brief email telling me all the shares had been allocated the previous week. But my guess is that even Jamie Packer couldn't have got shares if his enquiry had come from an Australian server.

The share price rose Friday, probably on the back of a small avian influenza story coming out of Asia. There is still a fantasy among some that the FDA will grant emergency approval to inavir. It's like UFO sightings - some people just keep believing. Still, over 5 is a welcome sight. Especially given that some of those who were allocated shares at 4.30 would be very glad to give them up for a quick 20%.

Influenza in US is very widespread, so I think the study will recruit fully and hopefully early. If I was a fantasist, it would be that FDA would listen to a story that the current Phase 2/3 is adequate for approval without formal Phase 3 next year.

Instead, we wait now for evidence that Daiichi will do a deal. There is no other news of any interest in this stock other than that.

Raising Capital Part 1

Biota's recently announced capital raising/new share issue has been anticipated for some time. Management's entire rationale for this issue has been made clear -  is about increasing stock liquidity; it concedes it doesn't need the money. Indeed, the first observation about the amount raised is that it still won't buy all that much. Hunter Hall's sell down has done something for liquidity. But there are a lot of Australian holders, me included, who stubbornly hang on and don't buy, sell or otherwise trade. Australian holders... and East Hill.

Here are some thoughts:

1. This share issue just about completes the set of completely ridiculous (disclosed) actions made by the company as part of its Australian departure. Their effort was just amateurish. Worse could be said, but I am being polite. The definitive statements made in public about not needing to raise capital are ringing in my ears.

The use of NABI as a listing vehicle was a mistake. Even if NABI shareholders didn't fight the deal, all BOTA would have had is extra cash but not the extra shareholders, and by the logic of this issue, no more liquidity than it has now.

An IPO would have been the best way to enter NASDAQ.

2. The timing and price of the issue is doing Wall Street a favour. The price is at its near lows, and no significant corporate or research action has yet occurred. So, they have gone to the Street with a powerful value proposition at the expense of the rest of us. I guess the argument is that the favour will be returned.

3. The dilution, in terms of shares issued, could have been worse, so I'm thankful for that.

4. The issue closes in about a week which hopefully means they have their buyers lined up.

5. They have done a vastly better job at supporting the company in the market and protecting it from a shorting attack than the previous Board on its announcement of the original deal on the ASX. Some pumping in the last week, and some significant support through the day of the announcement.

6. I emailed Guggenheim and have asked for an allocation - let's see what they tell me!

Other interesting issues from the associated presentation (SEC filing dates 9 Jan), which is a good update, include

1. IGLOO is already 30% recruited: that augers well. The first few patients at each centre are the hardest to get - the rest then tend to follow more smoothly. Also, centres can be shut down over Christmas. I expect they will complete recruitment as planned. The current influenza season is severe enough. In some odd way, a polar vortex is unhelpful - people might get the flu but they need to go to their doctor/medical centre and enrol in a trial which you might not be bothered to do if you're freezing cold, even if you have a 50% chance of getting free Inavir.

2. Vapendavir seems to have been resurrected as a respiratory drug! I only hope someone is interested in making a deal. I hope BOTA don't plan on pursuing it alone. Really, don't.

3. RSV is powering along with 2 new candidates and some good preclinical data.

What don't we, or the market, have?

An update on the ROW agreement with Daiichi Sankyo.

A very Happy New Year

for the BOTA shareprice!

Went off like a party popper since the Nasdaq struck 2014.

Looks a little more solid than previous efforts, so lets see what the rest of the year brings. Flu activity, especially H1N1, is early and reasonably active. Hopefully, this translates to a high chance of trial completion on schedule.

Inavir approved for use in prevention in Japan

which is nice. It took just over a year for approval. The trials supporting the application were adequate, but from memory the first trial influenza season was influenced by the low rate of influenza spread in family contacts in the controls and it had to be extended another year.

Despite the efforts of NSA, it appears odd that the announcement came after the end of trading on Friday. This is despite news wires reporting the approval  hours earlier. Maybe confirmation needed to be made in writing by a certain DS official: but hours of good frothy trading were lost.

Having said that, the approval is good news but will make little material impact on earnings. Inavir would have been bought into the Japanese stockpile in any event, but this might see it extend favoritism past Tamiflu on effectiveness and convenience. Cost remains an issue.

Again, the froth will probably be blown off the share price in short time, unless bigger players start to become interested.

Hopefully, the next BOTA announcement with Daiichi Sankyo mentioned will be the most important: the details of the ROW royalty arrangement. It is extremely important that this occurs in a timely way and on terms favourable to BOTA.

A legal case around ROW Inavir rights would be terrible.

Have a Happy Christmas. The year to come holds promise for BOTA, but I've thought that every year for the last 10.

Hunter Hall AGM video presentations

offer a valid and consistent explanation for the BOTA sell down by HH.

They have had a clear change in guidelines and direction, from major (often controlling) holders with occasionally activist involvement to passive holders with a maximum limit of 3% holding of any company's stock.

They have sold down to that level in BOTA.

They have even sold down stellar performers like Sirtex, although they are making an exception to the 3% limit for them.

As I said, if it has helped the liquidity and hasn't hurt the share price, then fine. Just seems weird strategy.

Well, that was easy

Hunter Hall sells down to 1 million shares.

Why would they sell out, having offered critical support for the company's move to Nasdaq through all it's disastrous stages for presumably the rich benefits to follow? Instead they sell at the lowest price in years.

And especially if, having a seat on the Board, they know what the next 12 months has to offer.

Mr Hill will soon vacate the Board, I suppose.

Words fail me. I guess it's all to benefit the Hunter Hall shareholder or unit holder. Somehow.

We'll discover the buyers eventually.

Some increased institutional buying reported at

 http://whalewisdom.com/stock/bota

- it's a good site for tracking institutional activity in BOTA, and as you can see there has been a significant increase in institutional buying. However, it could be just the placement of the 1 million shares last quarter. It will be interesting to eventually discover where the last 2 million went.

Blackrock have bought into BOTA.

Doesn't recognise East Hill or Hunter Hall, though.

I wish these 13F filings were easier to find and more timely - need to find a better source.

Not that the share price has reflected this: we're back to $4 after that brief uplift.

The company has announced dosing for the Northern hemisphere LANI trials. The influenza season here in Melbourne was very late: cases in late spring!