Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
Porky9
Re your 14:36
Could you provide precise evidence re your statement below that 4D has allegedly met the milestones for the second draw under Oxford Finance loan facility?
"... and secondly a finance arrangement with Oxford finance where they have met the milestones to facilitate further capital draw downs into 2023 "
As of this morning the company confirmed that they have not released any information regarding the part of the 0518 (lung cancer) trials which is a condition (B) to the second drawing under the Oxford Finance facility - you will have seen my earlier posts.
Do you have any information that has not been released to the market?
MHB
Question I put to 4D IR:
"... In the RNS there is no mention of further MRx0518 update re part B as there is only mention of RCC (please see below). What is stated is "Provide update on next steps in Phase I/II study of MRx0518 and Keytruda® in the Renal Cell Carcinoma (RCC) group."
Two questions here:
1. do we still expect to see some data out of at least 10 patients from the NSCLC cohort in say Q2?
2. have we reached the number 10 in the NSCLC?
If the answer to first question is negative, it would be very helpful to explain the reasons."
Answer from 4D IR:
"The study of MRx0518 + Keytruda in solid tumors refractory to prior immune checkpoint inhibitors continues to enrol, including the NSCLC group. We have not disclosed a Part B NSCLC recruitment figure nor provided formal guidance on when we expect to announce data from NSCLC. As for the recently announced RCC group, we intend to make an announcement when a formal endpoint has been met.
As and when the second tranche of the Oxford Finance loan facility is drawn down we will communicate this to the market."
Comment (from MHB):
The company could have at least clarified whether some data from NSCLC are an intended milestone (alongside a number of others in today's RNS) - all the more since it is a condition to second drawing under Oxford Finance facility!
At least we know that not mentioning NSCLC in the targeted milestones or news for this year isn't an omission! Whereas it is to an extent understandable that the company is (very careful) re expectations, the market hates uncertainty hence the reaction today is also understandable.
In a nutshell, it is important that 4D clarifies whether and when we should expect updates re the other three oncology cohorts and especially non-small cell lung cancer cohort in particular. The threshold of 1 in 10 success rate is not ambitious but it is a condition for the second drawing under Oxford Financing.
Satisfying the Oxford Finance (OF) conditions is very important as the criteria, for the further drawdowns under the facility, seem to provide a good assessment of progress in the business. As importantly, OF facility would provide valuable non-dilutive financing at a crucial phase.
Here below are the conditions for the second drawing under the loan facility (comment follows):
" “Second Draw Period Commencement Date” is the earliest date by which all of the following have been accomplished to Collateral Agent’s reasonable satisfaction: (i) Borrower achieving (A) positive data, including at least a 10% observed clinical benefit, in the Phase II trials of Borrower’s product candidate MRx0518 plus Keytruda in at least 20 patients with renal cell carcinoma (2 patients out of 20) and (B) positive data, including at least a 10% observed clinical benefit, from the non-small cell lung cancer cohort of at least 10 patients (1 patient out of 10); (ii) first patient dosed in Borrower’s product candidate MRx0518’s Urothelial Carcinoma Phase II trial in combination with Bavencio (avelumab); and (iii) Borrower’s product candidate Blautix advancing into a Phase 3 trial or Thetanix advancing into a Phase 2 trial, or Borrower achieving positive topline data sufficient to advance Borrower’s product candidate MRx4DP0004 into Part B of the Phase I trial in asthma."
(A): is satisfied (B): (addressed last)
(ii): should be satisfied shortly in this quarter
(iii): only one of the three conditions need to be satisfied. I'm more hopeful on the last of the three.
(B): here is probably the most critical question. Have we got yet 10 patients in the non-small cell lung cancer cohort and have we got one with a clinical benefit. It may be that we have (at least) one patient with clinical benefit but we are waiting for 10 to be assessed. However, in the anticipated milestones of the RNS there is no mention of an update for MRx0518 other than the next steps for RCC. Are we not going to see an update sometime in Q2 or even in H2 for the other cohorts corresponding to the other three types of oncology?
It's probably an omission so I have put the question to 4D IR so will come back with the answer when I receive it.
Finally just to say that provided we get a satisfactory answer to the above question I am not that concerned: one could be forgiven for thinking that the market almost needed that excuse for the chart predictions to materialise. It founded in the £54m of losses (which are NOT reflective though of the cash burn). Put another way: the market seems to have got the opportunity it wanted for the charts to become a self-fulfilling prophecies :-)
Au contraire! Being so vulnerable to SO, and to Woodford in the past, has had everything to do with the financial strategy or... the lack of a proper financial strategy. It highlights the lack of recent II presence and the lack of a diversified investor base: a REAL SHAME given the fantastic progress on the clinical front!
As I said, SO is the symptom not the cause.
The financial planning side seems not to have been looked after properly and if that carries on, it will delay progress on the scientific front. Time that changed!! If current management can't deal with this, maybe we need hires at senior level that can transform 4D into a medium-sized innovative global pharma company.
There appears to be some confusion on this thread: having a proper financial strategy doesn't mean raising capital in the short term!! By the way, the market isn't as closed to fundraising as some people think: a UK rival Microbiotica, an earlier stage company than 4D, successfully raised £50m as of early March, in this market.
With the exception of the recent loan from Oxford Finance, 4D has relied almost exclusively over the years on raising capital as its sole form of financing. Do you think that's the right strategy? Perhaps think again by looking at the share price over the years going from 500p to £10p down to around 50p now (even if the price was 150p now the same argument would apply). Dilution has taken its toll despite impressive progress on the IP front / asset side!
A proper financial strategy means you minimise dilution where possible. Whereas having a number of programmes is a big advantage because of diversification, it means 4D is to be burning a lot of cash as such programmes progress (each phase of one programme could burn millions of £). Well, having a proper planning as to how to fund those is essential.
Perhaps it is worth reiterating the points at the origin of this thread: Merck & Co Inc. is a US$205bn company and Keytruda is worth $17.2bn sales per annum. Yet, Keytruda has big room for improvement in terms of efficacy. 4D could help Merck improve the efficacy of Keytruda on patients, big time and therefore impact on sales could easily run in the multi-billions! It makes no sense for 4D to continue to be footing the bill of the trials alone. It could have been negotiated sooner but after the recent results, we have every justification to ask Merck to share the bill ... if not cover most expenses.
Bad negotiation on behalf of 4D or are we negotiating as we speak?!
As we begin to see the first results from Bavencio, could Pfizer and Merck (Europe) be asked to contribute perhaps in exchange for rights on revenues at the end?
Ditto with Parkinson's trial: given how novel the potential therapy might be, surely we can set up a JV should the early results prove promising.
IBS could be fast tracked but ... perhaps not very likely. Shouldn't licensing to a pharma be prioritised to generate some badly needed funds?
Last not least, are we getting close to any of the milestones on the Merck antibodies project?
The funding issue in the case of 4D is too important to ignore.
4D has relied on dilutive financing too much over the years. Therefore, SO is the symptom not the cause in my view. We could have been perhaps at 147p or even 247p rather than 47p with better financial planning.
Now the market is probably concerned about the funding gap between 4D funding requirements across programmes vs. Oxford Finance facility (assuming conditions are satisfied) + current resources. We shouldn't have to delay any of the programmes due to lack of funding so one really hopes we are actively negotiating licensing de
Two issues (elephants in the room) that need to be addressed, in my opinion, in order to reassure the markets and see sustainable SP rises:
1. The way that 4D is planning (or at least aiming) to finance the various programmes needs to be spelt out. In other words what's 4Ds financial strategy beyond the short-term? Is there one? Meeting conditions for accessing rest of Oxford financing will give us some runway but it's only a bridge type of funding.
Relying on raising funds and dilution should be kept to a minimum: that's only possible if we get Merck /other pharmas to co-fund programmes when they produce v. promising data sheets some way into phase II (0518) or at the end of it (Blautix).
2. Funds / IIs joining us as shareholders with serious amounts: would give us multiple benefits ranging from greater credibility in the market to greater negotiation power when negotiating deals with big pharmas to less share price volatility.
Until we have more clarity re the above points ... it may prove difficult to regain SP levels we'd taken for granted eg north of 100p -110p even with further good news from the IP/clinical front. The funding question should not be underestimated and neither should the investor side of things.
After the extremely welcome news of last Wednesday we are entering into a new era for 4D.
But, the financing challenges also become greater: why should 4D, a non-revenue generating company, carry on financing, on its own, the joint-trial with a drug whose multi-billion USD sales (USD 17bn+ in 2021!) could grow significantly, if not be transformed by 4D’s 0518?! To reiterate the point Keytruda could work on patients that it didn't before.
We could make the case to Merck (US): all the more now that 4D has more than proved the 0518 concept in RCC!!
From now on we should be aiming at the various 4D programmes to be as self-financed as possible once having reached the right stage. Co-financing (or drug self-financing) can be through an early deal of partial licensing i.e. granting a percentage of future revenues (e.g. 20% or 50% depending on the deal) in exchange for covering the costs of continuing trials and even ... some historic costs.
0518 and Blautix are strong candidates for some kind of early licensing or JV deal.
On a separate but related matter, 4D is doing exactly the right thing to search for new applications of 0518 with other big pharmas, notably Bavencio: we shouldn’t make our IP too dependent on Merck.
4D has limited resources and it will be a race between generating value against new dilution. The company has done well creating IP but the dilution has, over the years weighted more heavily than value creation. Why? The share price has been a downward one (overall) despite the successes in proving the LBP concept and its platform.
When the costs of each phase of a trial could run into tens of millions of USD, it is essential that we now pursue the co-financing / JV / drug self-financing avenues: yes we’d be giving up some of the future revenues but co-financing or other options would be very serious risk mitigants enabling us to pursue the various multiple programmes in parallel … and it’s not as if 4D hasn’t got enough ambitious programmes - various types of oncology, Parkinson's, IBS ... on its plate!
Of course, as an alternative, we could raise a lot of funds generating big dilution and run the risk of phase II/III trials not being successful. Let's face it: we only need one programme for our valuation to take off. Others, may well fail. So if we SHARE the very sizeable capital investment we will minimise the impact of further dilutive rounds before we hit that big success. Hopefully there will be more than one though.
Is Duncan Peyton and the team ready and capable of facing up to those financing challenges in addition to bringing in II investors?
The above are topics to discuss in the course of an AGM, if not to be raised
sooner. It would be a big mistake in my view to rely solely on consecutive capital increases / fundraisings and ONLY at the end of phase III to wait for a take-over.
Given the excellent results to-date vs RCC (phase I/II part A & part B separately), it would make perfect sense to have a spin-off phase III / pivotal trial out for RCC especially! It could be a spin-off is from the 0518/Keytruda trial which could carry on as planned.
This isn't a speculation as from RNS two days ago:
"4D pharma intends to discuss next steps with partners and its Genitourinary Cancers Advisory Board regarding the development path of MRx0518 and a potentially pivotal study in patients with ICI-refractory RCC. "
Whilst trialling the 0518 in other oncology indications:
(i) as per RNS "with potential expansion into other types of ICI resistance" and (ii) the indications we know already (other than RCC),
?ne can only imagine what it would mean for the advancement of LBPs in the fight against cancer and of course the other 4D programmes and the 4D brand name in general IF 0518 was getting close to approval re one type of oncology (RCC).
Oh and let's not forget the IBS which might also follow some kind of fast tracking.
Carrying on from the single-post thread of this this morning as I feel even more confident re the conclusion!
I emailed less than half an hour ago (as per the time of writing) and already got a response from 4D's IR: the question was a clarification as to whether the 4 RCC patients (out of 16) that saw a benefit in part B of the trial as per RNS this morning were the same or had any overlap with the 4 RCC (out of 9 in phase I/II Part A) that had seen a benefit as of 21 August 2020 https://www.4dpharmaplc.com/en/clinical/clinical-trials.
The excellent news is that there is NO overlap!! In other words, we now have 3 out 9 that saw a clinical benefit (improvement or stable condition for >6m) in part A and 4 out 16 RCC in part B!! That eliminates the very small possibility that part A results was an element of luck: 0518 seems to WORK for RCC patients at the VERY LEAST.
The ambiguity had arisen in my mind as it is the same number of people (4) who saw a benefit in part A as the number stated in today's RNS. Also, in the RNS of 3 Feb 2021 there was mention of patients who were continuing to take part in the study.
All good ... today it could be the most important MILESTONE for 4D to-date as it is a verification of its technology.
A strong vindication for 4D team, patients, for us investors and the 4D platform.
What I take away from today's RNS is that 0518 is here to stay.
We may not know data about the other cohorts (categories) yet, we haven't been told to what extent the RCC positive results link to the biomarkers, BUT the important conclusion is that a significant MILESTONE has been reached: 0518 WORKS for at least some patients and in at least one type of oncology.
That's good enough and now we can work on the assumption that the 4D platform WORKS. We've had strong indications so far, but information announced to-date pretty much settles it.
The next piece of good news now can come from Ukraine.
Bavencio has to do with both Pfizer and Merck!
https://www.pfizer.com/news/press-release/press-release-detail/bavencior-avelumab-receives-positive-chmp-opinion-first
But ... the latter is the European Merck (KGaA) not to be confused with MSD which is in the US is also known as Merck. Don't quote me but I recall reading they used to be the same company back in the first half of 20th century.
https://www.pfizer.com/news/press-release/press-release-detail/bavencior-avelumab-receives-positive-chmp-opinion-first
As we are eagerly awaiting the update on the 0158 & Keytruda trial thought I’d present some thoughts having mainly in mind the DAY AFTER.
First, there is certainly investor appetite for highly promising microbiome focusing companies in the same specialist sector as 4D:
https://microbiotica.com/microbiotica-raises-50-million-67-million-to-advance-pipeline-of-microbiome-based-therapeutics/
We're talking about fundraising for a company, less advanced and with fewer programmes than 4D (https://microbiotica.com/programs/) , in the same specialised sector (LBPs) raising money in this turbulent market.
In the case of 4D, we are NOT talking about raising money as we have a few more months of runway: we have been talking, however, about heavyweight, II investors being attracted to the same opportunity that we see who can buy shares at those ridiculous levels. Well, ridiculous for us but why the dozens (possibly hundreds) of possible IIs don’t appear to see it this way?
Re Mircobiotica valuation and as a total guess I’d say they would be worth well north of £100m post fundraising since they are raising £50m and have also had a few funding rounds behind them.
Now, Mircobiotica is:
- a British company and is a private one (not listed)
- it is behind us in terms of pipeline in terms of how advanced and number of programmes under its umbrella.
Two questions here:
1. If it can attract different types of investors (including IIs) in this turbulent market, why can’t 4D?
2. Why is Mircobiotica worth more than 4D and by quite a margin?
Not sure what the answer to the above questions are. What I am sure though is that management and CEO in particular should look seriously into this issue.
0518 & Keytruda trial results maybe just about OK to justify carrying on with the trial OR maybe they will be exceptional!
But … what will happen afterwards? Will we say: Oh that’s great and wait patiently for MSD to make an offer? Usually an offer from a “predictable” buyer never comes. After all, the offer may not be at the right price when target's too undervalued!
Shouldn't management (at last!) PROACTIVELY seek heavyweight investors that can help create a solid investor base, add value and reduce the high volatility in the SP? Share price can be influenced by external factors -temporarily- but, in the case of 4D, the irony is that (over the the last 2-3yrs at least) OVERALL trend in SP has been downwards against ... impressive developments on the scientific front! It’s time that changed – it’s about time 4D seriously engaged with the market. A weak and highly volatile SP isn't in the interest of anyone. SO only highlighted the strong weakness in the share price and the lack of investors that would make a positive impact.
Looking forward to positive 0518 results BUT also hoping for a CHANGE in the passive attitude by CEO and management. The company’s doing great on the science front, isn't it a great shame that the investor base doesn't reflect that??
Phil,
I'd think a lot of us have a solid core investment but are sometimes tempted to buy and sell top slices. Just makes the whole thing more interesting.
Fully agree that the upcoming 0518 news is probably one of the most critical milestones for the company: let's hope it is unequivocally positive.
Otherwise, I'm pleased with volume today as we pause for a breath of fresh air: volume stands already at 1.8m and it's not even midday. That coupled to the fact that there seems to be consolidation at a level c. 37-39 i.e. well up from the recent upper 20s / 30 mark, bodes well for significant further rises ahead of news.
2 weeks left at most but it could be news "as early" as Monday!
LOL, that's your prerogative of course but ... do you really mean "Sang" whose posting is driven mainly around trading positions - by the sound of it mostly loss making judging by the timing of the posts announcing the timing of purchases?
Did you also listen to Sang when he (or she) warned us about directors selling (1st Oct 2021 post at 12.21pm) or ... that we've been lied to by directors (around early December 21) to name but a few of the more negative moments?
Or, when he claims that private equity investors don't invest in listed companies (!) which is plain wrong... did you get reassured that this is the reason that the company hasn't been getting much in the way of II investment in the last couple of years or so ?
Granted, some of his posts can be thought provoking and informative re 4D's science and how it compares with peers as well as its people and the regulatory background. One wishes, there weren't too many arbitrary "conclusions" / poorly justified extrapolations at the end.
Anyhow, rumour has it he/she is about to issue a book "Bluff your way into biotechs, pharmas world" ... :-)
Luckily though, if your purchases are recent you are probably going to be OK.
Crl123
Good to see you are still around. Hope you are pleased by today's rise! Hopefully some IIs or big investors are taking positions so that the rise is sustainable and SP isn't hostage to penny traders.
Please don't be put off by deramper-come-ramper, penny trader Sanjijuelas1 and one or two others with personal issues to resolve. If rudeness comes so naturally to some people, it's not your problem, it's not anyone else's! It's something between them and their psychiatrist. I'd really not like to be a fly on the wall during their sessions :-))
By the way, you were 100% right about Putin - I didn't think he'd invade. I feel very sorry for the Ukrainians and all because the country wanted to be more part of the democracies of Europe. Although I think even the latter was the excuse rather than the reason.
There has been a rather strange obsession on this bb with Oliveira trades and what he might be up to in the last few months.
It's a passive and wrong approach to be focusing on Oliveira: had 4D management embarked on a proactive investor roadshow AND had 4D achieved a diversified & relatively solid investor base, Oliveira's trades wouldn't have mattered or would have mattered a lot less.
It's a very big investment world out there. It is understandable that there are punters who are somewhat unfamiliar with how the II investor world works or are looking at it only from a narrow window - though they try to claim the opposite ;-). There are specialist biotech investors or ones with biotech as one of their areas of expertise, there are speculative funds, there is private equity, there are hedge funds and there are high net worth individuals. There are those that can add value, those that would only care for trading gains. There are those that go for long-term and others that don't.
Even before the Russian invasion, in my view, SO had been the scapegoat for the SP collapse, not the reason.
0518 results are likely to be good but, in parallel, the company needs to be proactively seeking II investors and in particular the ones who can add value to
the business. Excelling on the science front is one thing, but we aren't talking about an academic team: this is a business.
The jury is out on management and so far it's not doing well! Hopefully this will change with further 0518 combo data but ... it's not as if there haven't been enough positive and very promising news to-date on the science front to make for a great story to tell investors.
Finally: being British and being a small market cap are no excuses (after all even when we were close to £200m we didn't really attract key investors): even on AIM there are companies that have done much better in terms of building an investor base.
Will be good to reassess the situation at the end of Q1 ...
Nelson TD,
"The SP weakness isn't just down to the seller. Its down to the fact that all investors know there is a seller and as such no-one is buying until the price lowers further."
Agreed re the first part only. I think that the share price weakness in the course of the last months is mainly related to the poor diversification of the investor base.
The progress on the scientific front and across programmes has NOT been followed by any enrichment and diversification of the investor base - Now, the SP has been paying a heavy toll for that.
And we are talking about equity investments but not only: investments by life science (or other) funds can take various forms not just stakes e.g. funding for the development of a specific therapy:
https://www.biopharmadive.com/news/blackstone-autolus-cell-therapy-investment/609627/
Is 4D actively pursuing strategic/other investments by IIs? If not, why not? If yes, why are they not happening?
Sanji,
Have you not heard of PIPE? (Private Investment in Public Equity) Private equity is investing in public traded companies, in fact it is hardly uncommon.
So maybe the flaw is in your knowledge? :-) Though I concede that VCs are mainly up to the point of listing. I'll give you that.
However the original point was about 4d's failure to attract II investment, not a rather pedantic discussion about diffferent II types.
Sanji, actually what isn't helpful is that your posting seems to be entirely driven by your trading position ... so one needs to filter heavily the content.
Sanji,
"I worked for 2 fund managers/brokers Michael. Charles Stanley and Old Mutual before the Quilter shenanigans."
That's a bit surprising as you appear to be somewhat confused re the distinction among various types of IIs in addition to the investment & business side of things! May I ask what was your exact role with the above institutions?
FYI: VCs, private equity, funds, even activist investors can all fall under the umbrella of INSTITUTIONAL INVESTORS.
See my original post at 09.50 please I referred to the failure of 4D to attract significant investment from IIs and even VCs (though granted VC investment is typically to pre-listed companies)!
Here is the quote to save you from looking:
"On the other hand, where there is a complete dichotomy is between the impressive (so far) track record on the scientific front and the unimpressive investor base: the 4D story hasn't attracted important new institutional investors in the last 18 months +. Even if one claimed that we are not on funds' radar screen because of market cap (it's nonsense by the way), the FAILURE to attract investment even from venture capital (who focus on earlier stage companies) is staggering "
So didn't refer to VC's only - do try to read other investors' posts for a change :-)) Hope you re less confused now!