A full page article in the Globes today;
Hereby the inofficial translation;
Shlomi Cohen (1)-translation
by: isrdeu 11/25/04 04:23 pm
Msg: 113940 of 113944
Exposure: The round table investors of Pharmos.Pharmos, as made clear, has an investors club that includes senior physicians and is led by a mysterious figure. Known at chats as Noach707. As of September 30, the bunch of friends do not fall asleep due to their excitement, and now, they are sure, it is the time the shorts will loose hours of sleep.By Shlomi Cohen , Globes November 25, 2004, 15:26 Tel-AvivPharmos published on Monday one of the “Most important” announcements, as defined by its founder, Professor Chaim Aviv, but it was very difficult to percept it content, and the confusion among investors, analysts and the few international journalists that cover the stock was enormous, as for example in the important financial web “TheStreet.com”.Using an analogy of the football, for one of my kind, that is not understanding much in medicine and clinical studies, in first reading of the announcement I said to friends that “we were defeated 5:1”, since the announcement spoke about one success and five failures. Only the few words of Professor Aviv at the end of the announcement, where he expressed high satisfaction, convinced me that there may be an achievement and it should be investigate thoroughly, and after many discussions I understood that the one that succeeded is enormous. Biotechnology companies that publish such fundamental announcement about the end of some stage of a clinical study, not to speak when it is about an innovative drug that none of its sort exists in the market, are leading a conference call and answer questions of analysts and institutional and private investors. But at Pharmos as usually at Pharmos they made it done with two interviews of Aviv to local financial papers, and maybe having these or other discussions with analysts and that’s all.So it happened that investors remained confused, the website TheStreet.com came out with a horrible headline that was changed during the day from “catastrophe” to “bad”, the share dropped, recovered, dropped again, and only yesterday, Wednesday, returned to its summits as before this announcement since maybe only yesterday the token finally fall with the investors that we have here a tremendous achievement, and add to that the “shorts” started to sweat. BTW, Aviv usually is not taking part in quarterly conference calls although he is declared as Head of Board, CEO and CTO, and although the quarterly discussions are completely of medical nature, since Pharmos has no sales yet. Even in the investors conferences Aviv presents rarely, and usually the show is handled by the president, Dr. Gady Riesenfeld.When a company does not cooperate with its investors in a formal and ordered manner, it enables to rumors to fly to all directions, and more severely, it leaves, with no intention at all, fertile grounds for the professional “Shorts” to “celebrate” by spreading rumors, since anything done by Pharmos is a huge gamble and everybody knows that the variations in the share will be large to both directions.
About the magnitude of the “Shorts” activity in the share, we can learn from the fresh publication that came out yesterday, Wednesday, after hours, and according to, between mid of October to the mid of November and before publishing study results, the level of “shorts activity” in Pharmos leaped almost to 50% of 3.86 million shares to 5.7 million shares. Since the mid of September, when the share touched during trade a bottom not viewed just a year ago, 2.3 dollar, the level of “shorts activity” raised by 110%.The “Shorts” of Pharmos like at other biotechnology companies, minority of them are day trade speculators that post the nonsense in the chat websites, as in the case of Pharmos, the nonsense that Aviv and/or Riesenfeld sold shares since they knew ahead the failing results. The majority of the “Short” is created by the managers of known trust funds that it is part of their forecast assignment, thus meaning they short any biotechnology company that is intending to publish results of clinical studies, since the fund managers know by statistics that most of the studies fail, and therefore if they lose in a ill short when study is a success, on the whole over time these funds are doing well. Regarding the study that its results were published this week, a very distinguished scientist with not joined to Pharmos or its studies warned me many months ago that what Pharmos tries to prove with its Dexanabinol drug in the study about patients that went through bypass surgery is mission almost impossible, since it deals with issues of cognitive impairment, thus dealing with the level of the active behavior of the patient and not with problems that are centered, although not solely, about physical impairment like in the TBI study results due to be published at the end of the year. This scientist believes very much in Pharmos success with the Dexanabinol drug with the TBI injured patients, while basing his optimism around the huge success of the stage II of this drug.I did not succeeded getting the response of said above scientist to the publication of the week, but to understand in depth the results of the study with the heart diseased patients (CABG), I traveled yesterday to north of Israel. Why to the north while PHARMOS is situated in Rehovot? Since I never get a call back from Professor’s Aviv office and in the north lives a person, to my best judgment second to Aviv and his scientists in understanding to the most the technology obscurities of Pharmos and his name is known to all at the chat webs as “Noach707” that often makes fun and sometimes his knowledge is not taken seriously by all as I do. I learned to know Noach707 who is an relatively large private investor, at the beginning within the chat webs before the bubble era, at end of the 90-ies , when both of us believed in the VoIP and specially in the pioneer in this business- Vocaltech (VOCL). Both of us at the same time, at the year 2000, we came to conclusion that the future of communication is VoIP , however without Vocaltech, since it did all possible mistakes that the main one was not being sold with astronomical value when could be sold. And really except some spark of hope with this share, I localized last year, a spark that vanished too, it seems that this share is going to join the historical list of companies that invented a product out of nothing and disappeared letting other to benefit.
The investor Noach707, being a one share man, moved then from VocalTech to Pharmos while diving to the depths of the medical material special to Pharmos up to last comma, and what helps him to understand it is his literacy in a tangential area to medicine, acquired by him in Germany. When he met with Riesenfeld the president of Pharmos, a year and half ago, he sent him ahead a questioner of 80 items that dropped the last of his chair. In a strenuous work enduring few years over the different chat webs , Noach707 built a private club of Pharmos investigators from all around the world, holding according to him, many millions of Pharmos shares.Among these investors exchanging information 24 hours whole day, there many physicians including surgeons in the domain aimed by Pharmos, the head and the heart, including physicians working in huge drug companies. The common nominator to all of them is that they do believe that Pharmos has a revolutionary platform that will launch through years new drugs and therefore they put their money where their mouth is. The Noach707 members of the club are taking part at all presentations of Pharmos most of them held in the USA and inform almost in real time any word spoken there by Pharmos managers. Since Pharmos lacks PR department that functions with the international financial, they function as the PR of Pharmos, and within their last achievements is the mentioning of Pharmos in the website of TheStreet.com before study results publication and also in the website of investors in the domain of brain sciences named neuroinvestment.com, both that were before the study results publication caused the rise of the share.In addition, this investors club localized two head injured patients in Israel that participated in the stage II of the Dexanabinol for TBI that recovered totally after administrated with the drug under study. Since these studies it is not known who administrated the genuine drug and who was administrated by placebo, at least in one case of these two, Pharmos checked backwards due to family request and confirmed that the same patient identified by his date of arrival to Ichilov hospital was administrated with the genuine real drug, and therefore healed.Noach707, as all of the specialist physicians in his investors club, think that the results of the study about the heart disease patients are a huge breakthrough, since it is the first time a drug that influences brain or to be more precise influences the cognitive impairments of human brain, what was defined in the contents of the announcement as the Stroop test. Again with analogy to football, what was seemed on the face value as five one defeat, is according to them, a one null a great victory, since the five other failing tests shrink compared to this one success that is a breakthrough of the influence of the Dexanabinol on the behavior of the patient during the three months that follow the bypass surgery. This success was achieved with a 99% astonishing rate of success with no negative side effects.
Noach707, contradictory to what Pharmos refuses to say, finds connectivity between this study and the TBI sudy, due to be published at the end of the year, and also to other studies due to take place in the following year with another derivative of the drug, aimed to prevent pain, including pain evolving as outcome of cancer. The connection is based on the few “modes of actions” of Dexanabinol, and therefore the great importance of this platform that treats behavioral problems, external head injuries problems, pain problems and in the future is viable of treating diseases like Alzheimer and everything because the drug, first of its sort in the world, works on the brain. This is the reason that at last conference call of last quarter Noach707 asked Pharmos managers to propose the inventor of the platform, professor Rephael Meschulam of the Hebrew University , as candidate to be Nobel Prize laureate of medicine. Until September 30 this year Pharmos was regarded in the said above investor’s club, as a small company having a potential for one drug for head injury patients (TBI) with market potential of 1 billion dollars. On September 30, the share of the huge drug company Merck (MRK) collapsed , and since than the investor’s club is in huge turmoil since most of them believe that on the base of the platform of Pharmos it will be possible to develop in the far future pain drugs that will replace those of Merck and Pfizer (PFE) that is based about what is called COX2 and that have in many occasion deadly side effects.Speaking about pain drugs , is speaking about a multi-billions of dollars market and the great dream of Pharmos investors is one of the huge companies shall “fish” the Dexanabinol platform in one or another contracting. Pfeizer is intending to handle a conference call coming Tuesday, after many years not doing it, with analysts and investors about the future drugs pipeline, and in the Pharmos investors club they are tensioned whether Pfeizer shall sign a cooperation contract with tiny Pharmos and shall announce it before the analysts meeting. It sounds very fictional but I am sure about one thing: the shorts that increased their holdings will not sleep well in coming weeks.
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Note;quite good translation
Midas |
