Conversation with Procept, 29 July 1997
I spoke by speaker phone with Mr. Michael Higgins, Chief Financial Officer and Mr. Kenneth LeClair, Principle Investigator on the NIH SBIR grant. Mr. Higgins was calling to answer the list of questions I had faxed to Procept on 25 July. It was obvious to me that Procept is working hard on improving their investor relationship and company image. This is extremely positive! The conversation was informative and beneficial. Mr. Higgins couldn't discuss everything because of security regulations, but that's understandable. The following is my understanding of what was said and it is possible that I might have misunderstood. If I say something that someone disagrees with, please feel free to challenge me. This thread could use some more participation.
Highlights of our conversation:
1. Stockholders did approve the use of Preferred Stock. The Aries Funds can request at any time that their Common Stock be switched to Preferred Stock.
2. The SBIR grant is for six months with additional grants possible. This is not a human trial. I believe that the CD1 drug research and development program is significant to Procept, it shows Procept as more than an one drug company. All the news in the past was on the PRO 2000.
3. The PRO 2000 Systemic Study will probably stay on hold, unless the current three drug combinations become ineffective because of resistance by the disease.
4. The SAR by NMR and autoimmune programs are early stage, but developing fast. The use of SAR by NMR will provide some strong drug leads.
5. Paramount Capital is using its resources to find additional capital. Procept would like to raise additional cash in the $7 « million range.
6. Procept continues to meet the NASDAQ listing requirements, even with their stock price below one dollar. They have met the Net Asset Test. NASDAQ is currently planning to close this test. Probably by early next year. At that point, if the stock price is below $1.00, a reverse stock split may be necessary to get Procept's stock price higher, so as to maintain their National listing.
7. Procept and Paramount Capital (as value investors) believe that the current stock is undervalued when compared to similar biotechnology companies. Procept believes that they will end the year in a stronger position.
8. Procept will continue to issue Press Releases when they have material events.
9. The Phase I clinical trial in England should be completed by late summer. Procept is currently developing the Phase II protocols. Some efficacy will be shown in the Phase II. Phase II will be next year.
10. Procept is still discussing a partnership arrangement for PRO 2000. Discussion are ongoing with three pharmaceutical companies. Nothing is definite yet. A partnership decision may/or may not come before the completion of the England trial. A lot of good data from the Antwerp trial is available for review by potential partners.
From my perspective, things are looking better.
Procept has:
1. Significantly reduced its cash burn rate.
2. Reorganized its operation.
3. Obtained the short-term funds necessary to bridge them until Paramount Capital does a private placement.
4. Involved NIH with the tuberculosis vaccine.
5. Obtained positive results from the PRO 2000 Phase I trial in Belgium.
6. Increased institutional investors.
Within the next five months investors can expect announcements for:
1. Results of the England trial-should be positive.
2. Additional funding by private placement, probably preferred stock.
3. Announcement of a Phase II trial start date, next year.
4. Partnership with a Pharmaceutical company for PRO 2000.
The only negatives may be:
1. Possible reverse stock split.
2. Further dilution of the stock price from issuing additional common stock.
My guess is that by early next year the stock price will be above $1.00 |
