Gabor,
Very appropriate post! Your point of view is very logical and rational as well, no question about it. I appreciate you sharing your opinion with us here. Since you apparently have had dealings with patent related issues, that make your comments even more relevant.
I agree with you that this stock is a long shot. My point is essentially the same. If it was not a long shot, it would not be selling at these valuations. My expectations of a possible positive outcome are based partially on hope and partially on limited research that some one like myself is capable of doing. It is not much, but that is all I have to go by.
The Product Concept: HVSF's concept is similar to that of Caverject and Muse. Effective drug with local application. Since this concept is working for Upjohn and VVUS. It is not unreasonable to expect that it would work for HVSF as well.
The Competition: It is a legitimate question that if an effective product is already available, what is the need for the product by HVSF. That question is very effectively addressed by the fact that HVSF brings to the market a substantially better product.
Prostaglandin E1, the drug has an extremely short half-life. To keep it stable it must be kept refrigerated at all time until it enters the body. HVSF's drug, Prostaglandin E1 containing LYOPHILIZED LIPOSOMES is better in that it remains stable at room temperature. Consequently, the presence of an appropriate dose is more reliably assured, and the cost of drug manufacturing, distribution, and storage is significantly reduced.
These material improvement will justify an appropriate market share for HVSF.
The Clinical Trials: The Phase I trails have been concluded. The presentation at AUA by HVSF that described the results of the Phase I trails was received by the participants positively. The results of the Phase one are being audited by FDA. The audit should conclude shortly. With world renown scientists like Dr. Lorenz Hofmann, and Dr. Irwin Goldstein, working with HVSF, there is no reason to think that they should have problem with Phase II and III trials. The expectation is that the Phase II trials will start in April this year.
The Patent: The company has the patent for both the drug as well as the delivery system. To take care of the problem that VVUS may file a lawsuit right when the company is ready to start the marketing/sales of their product, they have pre-preemptively filed an action asking the court to decide the patent infringement issue. This not only shows that they know what they are doing, but also is indicative of their confidence level in the strength of their patent position.
I am looking forward to Feb. 18, 1998 when HVSF patent will become public information, so that I can read it and evaluate its strength/weakness as much as I can.
The Financing: Their own financing announced recently should be adequate to take them through Phase II trials. By the time the Phase II are completed or are near completion, and by the time the action filed by HVSF regarding patent is resolved, they should be in good shape to negotiate a favorable licensing and distribution agreement with a Pharma. That should in turn take care of costs related to Phase III trials and marketing.
The Product Manufacturing: There is no reason that they cannot sub that work. They are doing the same for the production of their product for clinical trials.
So, as you can see it is not just pure hope. There is a foundation that exists and affords the possibility to build on. Certainly there is uncertainty, but that is part of life.
With very little effort any one can do this level of research and see that there is a rational basis for expecting a possible positive outcome.
Afaq Sarwar |
