A big pharma parstner in one of the drugs, but:
1. Worldwide partner for the eyes product, but BOl wants a big chunk and will delay any partnering, BOL already said in 2Q report that they will count more in the drug business for growth rather than the devices witch is slowing and have heavy competition, but at the same time Bol is not going for fast marketing (contradiction here, maybe it will go fast) and it seems that they can not move it into the general practitioners, so it is to grow among ophtalmologists, even among ophtalmologists is growing just nicely.
Pharmos is please with this cause they have no options and time is not against them anymore. The big staff of Pharmos cash out some $ in the recent run up of the stock both ways company got more cash, insiders long due wait for couple of million$ was pleased to also do so, no rush now.
2. At $160M market value for a drug that is selling $5M a year (and not growing at 100%, and expect grotwh to go to maybe 20% a year) the company is fairly value.
The rest of the technology is only tamoxifen (very far, 2005 at current rate) and dexanabinol (far, 2003 at current rate), and since the company will use the available cash to developed dexanabinol (a one shot lets see if we make it or brake it thing) so dexanbinol is just the hole where the at hand and incoming cash will sink, so the company is more than fully value at current price.
3. But, if PARS get a partner that will pay for real, for dexanabinol or tamoxifen then it could get a good boost, but neither Pars is anxious (it will get an unfavorable deal if it rush)neither the potential partners to be!
4. Small boost from L-tobra is possible but short live, since the story behind the current eyedrugs is clear, it will not be a big catalyst.
5. The FACT that Pars is going along for the phase II/III shows that nobody is willing to pay, at least not what Pars is asking for. The Chairman has wait before and he is willing to wait now.
6. To go alone is good if next trial is good, if bad the company will be depleted both of cash and hope, back to sub dollar.
If good results then one have a huge move, expect results in 18 month (6 mo recruitment, 6 months follow up, some delays and one gets 18 months to see data). Quintiles will manage the trial, it will decrease delays, then 15 month time. It is already 3 month since initial news of next trial (maybe 5mo already) is proof of how slow this trials actually move, nothing intrinsic to Pars, is all biotech.
7. Partner for tamoxifen is a problem, is expensive to test, the reason of less side effects and/or more efficacy must be proved, or at least equal efficacy. That they do not have a partner for a proven more than a $billion drug, is suggestive of other problems.
I think that AstraZeneca the maker of Novaldex(tamoxifen)will not easily allow a similar drug (they lost generic in the US to Barr, after several years of effective court fights, meaning able to delay the new entrance).
Unless the Pars/tamoxifen is so a unique drug,is so good and AZ themselves agree to it, which will give AZ good new patents, new multiyear life for their drug. But, if so far in development they probably will negotiate very slowly, or Pars gives it a for little away.
Pars has no money for further development of any of its drugs (the "revitalize" (read: resuscitation)of the research program does not mean they have enough money for
anything but tiny human studies (most will be in rats, and in the so called stronger dexanabinol like molecules).
Tamoxifen has been ready for human phase I/small II for couple of years, no money.
They could sell the "other technology" for so little is better just to leave it away, they could try to get it going as a new IPO?, no way, they got the lowest of the financing models, they can not go that way either.
Bottom line too much technology dormant, not enough cash to developed it, no rush either, and dexanabinol has just some chance, is nothing for sure, and it is so expensive, that they will sink deep in a failure, an early partner will take away the big chance.
Love the company, out of it during the rush (my third chance to do so, did not take previous two, took this one)
I will not pay for it above $2 (is worth $6 with fully developed eye business).
Big pressure against going up by all the losers holding the stock (everybody above $5)that will rush to get even or something out of their investment. |
