sydney meeting, page-17

Probably would have been interesting to get this out during trading, but here is some more from today's meeting.

I'm swamped with catchup work here, so a detailed response might not happen till later tonight and in the meantime Kangaroo or Reiner might like to add some points, but here is a quick precis on key points I can remember. Not sure if any other HC posters were there (perhaps 10 people in total).

- As noted, managed to prise a comment from PC about a new CEO going forward. This came up because we made the point that neither NABI holders, nor many BTA holders seem too enthused about the prospect of current management (BTA from a business "sell" perspective, NABI from any perspective) collectively running the show of the merged entity from Day 1 in the US. Therefore, on the basis of history, how could either company enthuse and expect their holders to vote "Yes". PC finally came clean that we are almost certainly going to hear an announcement about a new US CEO before the votes. Sounds like (from what PC intimated) this person ("he") will be a mover and shaker type (my words, not his). There will still be a transition period where PC & DL will be in their roles. I believe this message about a new savvy CEO is critical in the fresh start message that Biota has been trying to sell to investors. Can't wait to find out who he is, but obviously hoping (and expecting) he will have the business runs on the board and if he does, than I would expect a complete rethink in terms of extracting near term value out of the relisted stock (code) "BOTA".

- Though we indicated the science was the best there is, we didn't hold back in hammering PC in terms of his (management's) performance in terms of extracting value for holders. There was one analyst there ("Tom") who Peter turned to for supporting his view that Biota's performance has been hampered by the GFC and poor Aussie interest in Biotechs like Biota. We immediately jumped on this and asked "Tom" whether he believed Biota had done a good job in enthusing the market. His response was something like, they could have done better. This endorses most opinions here about management performance.

- Re pipeline, Biota's non nucleoside HCV candidate is in a state where it is available for sale. I'm glad that this potential transaction will be handed over to a US savvy CEO to take forward. Note, early/mid stage HCV agents have been fetching ridiculous license fees of late, although some big pharma money has been thrown away due to some of these candidates subsequently falling over clinical hurdles. Biota has a great history of successful science, so I'm looking forward to the new CEO siezing a chunky license as perhaps his first big scalp over the next year or so - my view only, but time will tell...

- LANI capacity will be ready in the US by 2014, so if there is a Pandemic from that time, there is the possibility for emergency FDA approvals - this is speculation, however, it brings potential LANI revenue forward by a min 3 years based on current expected timelines (via normal FDA approval processes). Importantly, production capacity will be high enough to respond to large scale US stockpiling needs within 4 weeks of this 2014 availability.

- PC confirmed his expectation that the Biota/Daiichi Sankyo (profit) shared ownership of LANI (which equally applies in Japan), means that a similar reverse royalty arrangement would be applicable for ROW - in other words, the order of 4% payable to DS, with the other 4% payable to Biota and the balance 92% going to Biota to cover normal Business costs (including contract manufacturing). PC confirmed that gross revenue after manufacturing would be 50-70% of sales revenue.

- Re HCV patent in dispute, sounds like the big issue from Biocryst's perspective is that their patent application was rejected by the USPTO on the basis that they were short on data, not necessarily on first attempting to file. In other words, Biota's patent application was backed up by enough data to satisfy the USPTO to issue a patent - conversely, Biocryst's application/s did not have enough supporting data to give the USPTO the opinion that it was deserving of a patent - NOTE - THIS IS MY INTERPRETATION OF WHAT PC SAID - the others may be able to describe this more eloquently.

- Asked PC whether they (Biota management/reps) have met the US institutional holders of NABI and whether they believe they will vote "Yes". He said YES.

This should be enough for everyone to start discussing for now - I'll add more when I have a free moment, but I guess I will keep an eye on the discussion in the meantime.

Reiner will no doubt discuss the downside in relation to "abandoning" local shareholders, from the perspective of local Superfunds not willing to invest in US stocks.

If I don't get a chance to reply to those holders going to the Melbourne and Brisbane meetings, my recommendation is that you should go with questions and be prepared to be frank, upfront and civil with PC. He is the CEO - the buck stops with him (as the front man). If we have an opinion, as holders, we should not be afraid to step on anyone's toes. There is nothing personal here. As a person, I have no problems with PC, but as a CEO, I'm upset and had/have no problems making my opinion clear.