To all: I had a nice long talk with Gail and Donna regarding the state of things at Alfacell, on various matters:
1) Concern about insider selling. A repeat of prior explanation - that Kuslima Shogen had taken out a personal loan of $750,000 to help finance operations and must sell stock periodically in order to make the necessary payments to lender. Also, over time options were issued to various parties which were exercised, since they were in the money. This had the salutary effect of bringing funds into the company, but they were immediately sold in the market (the amounts precluded buying and holding). This occurred primarily in 1996 and is tapering off somewhat this year.
2) Both Carter and Conklin received stock options (and will continue to receive them each year) - for joining the BoD. 15,000 per year each, I believe. These options, which I believe have only a one-year hoding period can be exercised at any point after that.
3) Gail believes that finding an investment banker that will invest substantially in Alfacell is a key objective right now, and they are working on that. She seemed very positive about the possibilities here.
4) No interim results of trials are planned or anticipated. The key objective here is to disseminate what information has been published and have others publish data and opinions regarding the promise of Onconase.
5) Timetable - though approximate - indicates completing the patient data accrual around the end of the year; then observe patients for another six months; then file NDA, by year-end 1998, then wait for FDA approval, which may be shortened from average, due to nature of the disease (some AIDS drugs are being approved in 3 months). So we're looking at somewhere around mid-1999 for FDA approval.
6) I related to Gail the opinions of an oncologist friend (stated here earlier), and requested her opinion:
a. GEMZAR's success was due to the fact that there was nothing else available; the drug is really not very effective. She agreed with the first, did not comment on the second.
b. That Alfacell could not successfully market Onconase on its own. Gail disagrees. She stated that their contacts in the pharmaceutical and investment community indicate that given the fact that the Oncologist community is a very close-knit group, they will be relatively easy to reach. Published study and trial results will adequately inform them.
7) On the matter of seeking a buy-out, Gail stated that of course, should a buy-out offer come about, they would certainly examine it. They are not averse to the possibility. As to their seeking a buy-out, she declined to comment.
8) I asked if there was some assurance she could give, some item of information that could be divulged that would help set our minds more at ease concerning the eventual success of the company. Gail stated that although there was not any specific information she could provide, I should examine recent events and draw my own conclusions. Specifically she alluded to the addition of the two BoD members, whose background, knowledge, expertise specifically in oncology, proteins, etc., should give us an indication that things are moving in the right direction.
9) The next annual meeting will be on November 20th.
I felt quite satisfied with the dialogue, albeit disappointed that we may not see approval til sometime in 1999. I personally feel things are moving in the right direction, though I, like so many others, am frustrated by the snail's pace and lack of investor value enhancement.
But that aside, I would welcome your comments and views.
Regards,
Gil
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