OK, here's the report! About 20 people in the audience, including at least three from Smith Barney, Jack Rifkin, Paul (I assume, although I didn't know who he was), a Fidelity fund manager (multi-billion dollar fund; couldn't tell if he was interested or just hanging out), and Ron Trahan, PRLN's PR person. Of the remaining attendees, judging by the depth of their questions, three were clearly quite familiar with the company. Ron Trahan was being attentive to those in the room and was doing a good job signing up people for the mailing list. I had the opportunity to talk to Arthur Koch, CFO, before and after the presentation. I was able to ask him directly about two things on my mind--the status of the ongoing legal action by those formerly connected with PRLN, and the CEO succession question. I suggested that PRLN make copies available of the slides used in the presentation. Mr. Koch seemed agreeable to that. So everyone should call his office and ask for copies to be sent to them.
Here are some details from the presentation, not in any particular order, and probably boring to those who closely follow the company already--but I'm just going down my notes as I took them:
--PRLN thinks it is the only company now pursuing the dual route to product approval--dietary supplement and traditional FDA approval.
--In addition to AndroVir and AndroCar, PRLN has "identified" more than 370 other products for future development.
--This technology was first identified at Cornell when researchers observed signalling within cells that is necessary for the cells to grow and divide.
--The company has a $23 million market cap, about a $7 mill. float, no long-term debt and 22 market makers including Smith Barney.
--Babish made the interesting point that when science is successful in postponing the mortality caused by a disease, this can actually result in larger numbers of people infected with the disease. This is because no way has been found to prevent certain diseases, and by slowing down the rate of mortality from a disease, more people end up walking around with it. This puts tremendous strain on the health care system. The analogy was made to diabetes--people who have diabetes are living longer than before, but still suffer from hypertension and all the problems associated with diabetes, and this is overloading our healthcare system.
--Two measurements--the viral load and CD4 count--are important to gauge the relative health of those who are HIV positive. If therapy commences and results in a lowering of the viral load and upward trend in CD4 count, this is proof of efficacy. PRLN claims to show in a study with humans that AndroVir had positive impact on both. Patients were given 5 milligrams of AndroVir per Kg of body weight, for three weeks, then twice that amount for the next three weeks, then no Androvir for three more weeks. The results were as hoped with regard to viral load and CD4 count, the most impressive response being in weeks 4-6, and then a sharp drop off in positive response in weeks 7-9. Another measurement of efficacy of therapy is the serum cholesterol level, which tends to decrease in the patient as the disease progresses. There was a positive response to AndroVir here, too.
--In a three month study with humans, 13 of 16 subjects completed the study. Side effects were rashes and a rise in serum enzymes but this was transient and not related to organ toxicity. Of the three who dropped out, one had an allergic response to AndroVir, and two couldn't stand the bitter taste of the drug. PRLN thinks the taste problem is a formulation one that the company can deal with. (I couldn't tell if these were two independent studies, and, if so, how many people were enrolled in the first (nine week) study.)
--PRLN thinks AndroVir is extremely complementary to cocktail therapies. It is a problem that viruses can "mutate through therapy" very easily, but AndroVir works to completely "shut down" the ability of cells to accomodate the virus.
--Having chosen the dietary supplement route, PRLN is precluded from filing an IND with the FDA. However, human studies being conducted now can be used in support of the application when it's made.
OK, here's what you really want to know:
--Assuming a 3.8% penetration of all AIDS patients in the first year on the market, AndroVir could generate $2.4 mill. in sales and make a $1.2 mill. profit contribution to PRLN. Likewise, AndroCar, the drug to enhance the well-being of cancer patients, is assumed to penetrate 1.9% of the cancer market (as measured by number of patients) in its first year, generating $4.0 mill. in sales and $1.6 mill. in profit for PRLN. Potential markets are $300 mill. and $400 mill., respectively.
--AndroVir expected to be introduced in May of this year and manufactured in East West's facility in Emeryville, CA. (No details given on the structure of the agreement with East West.)
--AndroVir assumptions: 210 mg. capsule form, taken three per day at cost to patient of $60 per month, or $720 per year. Selling price for PRLN: $30.00 (note from me--I'm not sure what this refers to). Projected gross profit: $21.60, for a gross margin of 72%.
--AndroCar assumptions: 350 mg. capsule form, taken three per day at cost to patient of $97.50 per month, or $1170 per year. Selling price for PRLN: $58.50. Projected gross profit: $37.95, gross margin 60%.
(This data was on the slides and would be in the packet if you call for it.)
NOTE: I haven't run through these numbers to see if they add up--no time right now.
Other financials: $3.3 mill. in cash at last reporting period, annual burn rate of $3 mill., company hoping stock price moves up so money can be raised at a decent stock valuation.
Finally, there's this time line: PRLN is searching for an HIV specialist (an MD) to join and spearhead the AndroVir rollout. Company expects to announce the person in a few weeks. PR campaign to commence next month, followed by ad campaign in April.
I'm travelling for the next four days and will answer specific questions when I get back if Paul hasn't already done so. Christine
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