COMMENT
Since July Prometic's affairs have become more complicated and less clear. At times the company seems incapable of stating what it will do, then doing it.
In a previous post a reason was discussed: chronic cash shortage and overstretched personnel. Whatever the truth, Prometic shows signs of overreach. Failure to attain FDA approval for Ryplazim made a bad situation even worse -- imposing more cost-cutting and operational restrictions.
Again Prometic needs cash. Before 2019. The market seems to expect another dilutive distribution. That MAY be offset by a partnership agreement.
A Stockhouse post:
"Spoke to Fred. He knows what our expectations are. He specifically told me that the conference call will have some information about how /when we will have cash in our account. He did mention that partnership should give then 50million, istrongly assume that partnership is still in works for around 50million upfront but i could be wrong as well. "
— $50 million is so-so: not the $100 million expected, and not enough to carry Prometic thru 2019.
Notes on partnership:
Rumours have been rampant.
Prometic started badly with a public statement by the CEO that the process would be wrapped up in August. Then came notice that the number of suitors had increased from 3 to 5. Given the evaluation criteria stated by Bruce Wendel, 2 new suitors made a complex process even more complex.
Meanwhile the CEO stated that Prometic would now be open to partnership on Ryplazim, too.
It's now 3 months past the company's confident prediction, with no partnership -- though one may be announced around November 15.
However, if the posted $50 million figure is true, a few possibilities suggest themselves:
1 — Prometic's suitors were less enthusiastic than hoped
2 — The CEO's rumored (note rumored) reluctance to cede revenue and control took precedence in partner evaluation
3 — It was impossible to determine a usable split between up-front and back-end payments, milestone payments and earnouts
Not clear:
— which costs/trials Prometic will share with a partner
— which will be carried by Prometic, alone
— for Prometic and potential partners, goals for front-loaded and back-loaded payments
Unlikely that full explanation of any partnership will be revealed. Up-front payments will capture headlines -- but the devil is in the details.
— Remember too, management's comment that planned partnership(s) must be submitted to the FDA. ________________________________________________
The short campaign continues. As of 12 November, the reported US PFSCF short position is ~16.52 million: Canadian PLI.TO is 8.28 million, total 24.8 million.
— There's no shortage of big holders who willingly lend out shares for income from short sellers
— Nevertheless, current price does not accurately reflect actual value, which is ~$1.30 - 1.40/shr
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A survey of potential markets for Prometic therapeutics reveals potential in excess of $60 billion:
— NASH, diabetic foot ulcers
— PBI-4050 Chronic Kidney Diseases/Diabetic Kidney Diseases
— PBI-4050 (for Alström Syndrome)
— PBI-4050 (for IPF)
— RYPLAZIM (plasminogen) – for congenital plasminogen deficiency
— RYPLAZIM™ (plasminogen) – for IPF
— RYPLAZIM™ (plasminogen) – for Acute Lung Injury / Acute Respiratory Distress Syndrome
— Plasminogen – for Chronic Tympanic Membrane Perforation
— IVIG for Primary Immunodeficiency Disorder (PIDD)
— INTER ALPHA-ONE INHIBITOR PROTEINS (IAIP) – for the treatment of Necrotising Enterocolitis in Neonates (NEC)
As with PBI-4050 and fibrosis, there will more than one suitable therapeutic for each condition. Long-term to 2025, assuming Prometic gets portions of each market:
— 10% = $6 billion
— 20% = $12 billion
— 30% = $20 billion
Divide those figures by the float.
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Conclusions, 12 November — Prometic needs cash. Beyond that, no useful prediction can be made.
Jim |
