The rain on the plain is mostly the same.
In 16 recent days of trading over the last 20 or so
the buyer using Peters has bought 504,000 shares of
DMX. Peters during that time didn't sell a single share.
This is after the buyer using Research Capital accumulated
some 850,000 shares net over the past several months.
I also agree with the detective that a third buyer working
through Anonymous accumulated a smilar sized position
although this is somewhat less easy to verify.
The gloom that pervades now is distinct from the doom that
gonged loudly as DMX marched to $1.47 with no buyers. It
is the gloom of no news.
It is my opinion that the entire file wasn't assembled with
full documentation until mid August and that it was around
this time that it was ready for that final director's
review.
I don't know if 60 days or so is a long time for this
review or not. I do believe that Rebecca's comments
about August continue to show a CEO who does not have
enough experience either with approving agency processes
or with managing market expectations. This is not news.
I have heard rumours that back in August the FDA was
literally flooded with calls from DMX shareholders who
called expecting to be told the status of the submission
and predictably came away with a variety of impressions.
There is evidence IMO that Dimethaid has some serious
weaknesses in its operational capability. The decision to
go with Provalis in the UK I think was understandable. The
cancellation of the agreement in February based on abysmal
success I can also accept. The cancellation of an
existing supplier without having a replacement eight months
later raises serious questions about operational decision
making.
In Canada, the decision to hire and train a sales force
based on expectations from Health Canada falls in the
same category to a lesser degree. Being ready to hit the
ground running (so to speak) by investing in a contingency
is fine - as long as you have existing revenue and cash
flow to fund setbacks.
I don't see either of those situations as core issues;
but, it does show the business world in my opinion that
DMX needs to make better market decisions. And rightly
calls into question the decisions the same team will make
in the future. Dimethaid may benefit from reviewing just
how much Rebecca tries to do herself and the CEO would
do well I think to strengthen her team in this area. This
step is a serious challenge for all the triple A types who
run small companies.
The biggest missed opportunity I think will be addressed
at the AGM which is the praiseworthy achievement of
completing the FDA submission for Pennsaid. This is the
premier market and toughest agency to get through. REK
has taken this product from early clinical trials through
to the end of the applicant process. This achievement
is experienced by only a few in a thousand products.
Asking why it took so long falls into the same category
in my mind as asking why there are recessions. It did
and there are.
Lately those who pay attention will have noticed that for
the first time in almost 2 years companies generally are
meeting and exceeding their appropriately reduced targets.
As a result of beginning to hit these lower numbers, the
investment community wishes to immediately have valuations
at unsustainable levels. Nothing changes.
The tendency in major pharmas is to partner early. My
research says this happens in the majority of cases with
the minority being buyouts and licensing of existing
approved products.
This along with my own reasons for believing JNJ is serious
about Pennsaid suggest the possibility that Rebecca may
be going down the road she has always said she would go
down which is to offer a partner an approved product.
The cash big pharmas put in is immaterial to them and part
of the cost of doing business. The profile is some cash
up front, some on various milestones, the biggest chunk
by far on approval, and then into the revenue sharing.
The risk management group in those big pharmas exist to
manage the companies' risk as a whole - knowing a material
percentage of these partnerships will fail during their
approval processes.
If DMX had signed with (for example) JNJ earlier, I suggest
they would have received some additional $10 million US
on signing (somewhere in 2000 or 2001) and would perhaps
have received several million more at this point in
completing the submission.
Demographically this is the risk money where the big
pharmas expect to lose significant percentage of their total
investments in owning the rights to potentially marketable
products.
You can believe I'm pulling these numbers out of a hat if
you like - but I'm telling you that if DMX had signed
with JNJ early they would have some $10-15 million more from
them up to this point.
The offset to sharing the risk with the partner, which I'll
make the point again is the industry norm, is that the
deal for the product is noticeably richer once the risk
of approval has been reduced to zero.
Has this been analyzed by investors?
end of part one |
