I used to have a physics teacher in high school who would always say "Clear as Mud" whenever he was talking about some less than obvious point. I haven't thought about him in years. I wonder why he comes to mind today?
What does the data mean and why didn't the price go up? The other AIDS drugs that have been released lately have caused AIDS virus counts to drop below detectable levels. A 38% decrease in viral load isn't all that impressive compared to these drugs. And I am guessing that most people who look at this release will say "Oh, a 38% decrease in viral load. Big deal."
What they are missing is that this should not be compared directly to other AIDS drugs because it will fill a different niche. It may be useful to those who are allergic to other drugs. This is speculative, but it may be useful in helping patients save money if they can take AndroVir and reduce the levels required of other drugs. (This is speculative because I don't think AndroVir has been tried in combination with other drugs yet.) And there are a LOT of people in the third world who just can't afford the $10,000 - $20,000 a year it costs for treatment with other drugs. AndroVir would be tailor made for this market.
Did somebody just say China? When Paul revealed to us a couple of days ago that the Chinese government was a stockholder and could be a big customer for AndroVir, I just smacked my head and said "Of course! Why didn't I think of that?" I had not realized that China was a stockholder of PRLN, but with a little reflection it is not surprising. After all, PRLN needed to pay for the rights to the Chinese Herbal Medicine. How would Paracelsian, a company that was cash poor and stock rich, pay the Chinese? In stock, of course. So although this may not be as effective as the other drugs, it still has a niche to fill.
I'm guessing that the market did not consider this background information when it valued the stock today. It may be some time before the stock rises in price--perhaps we will have to wait until March when AndroVir is rolled out and when the marketing plans are more thoroughly detailed.
Well, that's my analysis. Take it for what it's worth. That and a quarter will buy you a pay phone call.
Here's a question for Paul or Rick C. or anyone else. Have you ever seen a situation like this before where a small company reveals ambiguous, but somewhat positive data about a new drug? Does the market usually take off? Does it take a few days to digest the news before taking off? Or does the drug have to actually be on the market before the price increases?
Robin M. |
