The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
This time, PL75, the goal has been brought to Alan. The ball has been placed on a tuft of grass, and all he needs to do is swing a big left foot with enough precision to make contact with the ball. Then we score. What could possibly go wrong?
It helps to set the context to understand the perseverance required to succeed in this industry. Avacta have many talented people no doubt, but they are not immune to the statistical reality. That they have failed to see through a number of ventures to date is not unusual.
Precision hopefully is different and will represent the breakthrough venture that Avacta desperately needs. Not sure where they would go from a failed precision trial tbh.
Many drugs are flogged through trials on the promise of very marginal improvements over current treatments and yet we are seeing the precision trial is already yielding some pretty top end results. Now it is funded, I'm more confident that finally they can see this through through to commercialisation.
The success rate for life science companies is apparently lower than 10%, so statistically speaking it's a really tough market to make it in. Not only does the science need to stack up, on top of that there is the added hurdle of the brown paper bag protocol, which if required, and management not familiar with, results in lft type failures.
Based on those statistics it could take a long time for a biotech to make it. Our CEO has stated he's confident of a greater than 50% success rate for precision... I guess you have to look at the trial progress to date and make up your mind whether you believe what is put in front you. Hopefully the board will ensure that the task of navigating the second part, of navigating the commercials, is in the hands of the right people with the necessary experience.
Jesus, not another one. The convertible bond repayments don't just keep raining down like some nuclear strike. They will happen every quarter, and will be around 2% per quarter. Otherwise we are funded, so that's it, no other dilution.
I'm not proposing a change in management at this stage, the trial is progressing well, that would just be disruption and a distraction from the end goal. The numbers were more of a demonstration that the company could fall back on the DX sale at some point, either to clear the bond, or even to fund this venture over the finishing line.
Launch was acquired for 24m and Coris for 7.4m, totalling 31.4m.
The CL has now been reduced to 35.7m.
If DX could be sold for a smallish loss, say 27m, and that cash put in the bank, it could be used to cover those payments from here until a genuine inflection point is reached.
Whether that's a likely scenario or not, who knows. Surely must be under consideration.
No idea how much dx is worth now, but also worth reminding ourselves that the sale of that division will put cash in the bank. Even if at a loss it would still be preferable to further dilution, and likely restore some sentiment. It's a card to be played at some point, even if questionable to begin with.