I have recently researched PCOP and find it an interesting company with significant upside potential, both short and long term. I am hoping that there are others out there that would like to have discussions about or follow this company more closely.
In a nutshell, PCOP is a leader in combinatorial chemistry, one of the major and growing methods of identifying compounds that may ultimately lead to marketable drugs. Combinatorial chemistry is used to create libraries of small molecular compounds that are then screened and assayed against biological targets (i.e., for activity against substances known to be involved in diseases). The company has a protected (but publically reported) method that allows it to more rapidly synthesize larger libraries than its competitors, to rapidly produce additional libraries based upon the preliminary screening results that are used to home in on (optimize) the most effective compounds, and to more readily identify the structure of the compounds of interest. The business plan of the company has three emphases: 1) provide other drug/biotech companies with libraries to specs that they can screen for targets unknown to PCOP; 2) enter into partnerships (they already have 7 large ones) to generate libraries for specific, known targets, and 3)generate libraries that can be used in house for PCOP to use in identifying drug candidates. Royalty agreements are put in place for libraries going to other companies and in partnerships; in addition, the libraries use a tagging method that PCOP has to 'read' for the client or partner companies, so they maintain control to a certain extent. The business plan basically allows for multiple sources of revenue that keep the burn rate to a minimum, even though R&D is high. The licensing agreements are less risky but yield less reward if drugs are developed from PCOP libraries, but will permit PCOP to develop in house candidates without pressures for secondary offerings, etc. Based upon the number and size of payments involved in the partnerships, it appears that PCOP's methods are being well-received.
I am not a member of the biotech research community (actually I'm a researcher in the physical sciences), so cannot provide much technical info, but I'll be happy to supply as many details as I know if anyone shows any interest. I am long PCOP.
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