“Ummm, maka I expect it's because of the demonstrated science, the slow cash burn and (as JTA has already mentioned) the fact that many OBJ holders are aware that confidentiality provisions in big business are normal practise and that a lack of daily announcements isn't enough reason to run around yelling that the skies are falling in.”
I agree with what you are saying, and to add further to the discussion IMO the only relevant change to the company’s position is that the shareprice has gone south. In the economical climate that we are saddled with the ASX has numerous companies whose shareprice is also heading south. I am sure that many other Bio’s would like to have P&G and GSK as partners, but more importantly are “funding” the research. It is easy to forget that it is the long term viability of the company that will be the greatest benefit to the shareholders, short term fluctuations for Bio’s appear to be the norm and if you look at other Bio’s at the moment this appears to be true. OBJ management have succeeded in gaining the interest of 2 of the heavy weights in their fields and from their announcements further interest has been shown. What people fail to realise is that the timelines that are worked to are the timelines of our partners –
“A significant finding was that one in four medicines approved was a medical breakthrough using a newly discovered molecule, unique to any other currently used to combat disease. It takes the testing of “10,000 new molecules, 15 years and $1.4 billion” to get one medical breakthrough from microscope to medicine”
Although it can take up to 15 years to bring a new medicine onto the market, this can be shortened depending on the molecule and the testing that is required. What is also of interest is that –
“Vaccine manufacturers are increasingly focused on exploring innovative delivery devices as an opportunity to improve therapeutic efficacy, enhance ease of use for patients and healthcare providers, and reduce cost of administration. In therapeutic vaccines, particularly, the “delivery method is developed in parallel” as the vaccine is targeted. Non-invasive delivery techniques such as oral/nasal sprays, transdermal patches, vaccine implants and jet injectors are becoming more popular. Vaccine developers are also increasingly looking at developing in-house delivery technologies.”
From this we could speculate that with OBJ’s recent announcement (Shareholder Update Aug 30, 2012)
“In a new technical development, OBJ announced “highly promising results” in the area of Micro-needles. Dr Tarl Prow of the University of Queensland has shown that OBJ’s FIM technology had a substantial effect on the bioavailability of certain drugs following application by Micro-needles. The results of this work were presented at the international PPP Drug Delivery Conference in France by Director Dr Chris Quirk”
These results are still moving us in the right direction, slowly but surely. With regards to P&G and possible timelines, we first started to collaborate with them in 2010 –
“The Letter of Intent for the Strategic Alliance sets out a program of technical evaluations that, if successful, should lead to an initial “5 year Strategic Alliance for the design and development ” of a “wide range ” of consumer products incorporating OBJ's micro-array and FIM® drug delivery technologies”
And this comment from Bob McDonald (Chairman, President and CEO, P&G)
“We need to get back after this in a meaningful way. In late July, we met with our global leadership to review and increasingly promising pipeline of “new category and brand opportunities” . While it will take some time to get some of these innovations ready for market, I can assure you, we have meaningfully advanced our work in this area over the last year. We should begin seeing the lead items in this portfolio enter the market in “fiscal 2014” ”
Using this info from P&G and the start of our collaboration with them the approx timeline here could be from 3-5 years, although without knowing the stage we are at, we could be anywhere (even ready for market)
Building Value in a Biotech Company Through Partnerships
If a growing biotech company wants to succeed, it must create “long-term” sustainable “value” . Everyone wants to partner with large pharmaceutical companies, however, either they do it very early and give away an important part of their long-term value, or they are unable to build all the capabilities on time to allow for their technological value to be noticed. These partnerships are difficult to manage given the important cultural differences between organizations, so, even though they are a fast way to build value, they very often fail to deliver.
The most reliable way for a biotech company to become successful is to develop a product that meets a “specific need” and thus, is bought by many customers. However, getting there is not easy. “OBJ has succeeded here by partnering with GSK & P&G”
Biotech companies normally strive to partner with a pharmaceutical company as a way to validate their technology and ensure financing. These partnerships possess many benefits, but also pose challenges and disadvantages, namely: an increasing number of biotech companies seeking partnerships; the fact that pharma companies really do not give extra benefits like better R&D effectiveness and only pay royalties for well-defined product candidates; the difficulty of managing such different working cultures; and the fact that the big company always gets the largest portion of the deal because it acts as the technology integrator. “OBJ has succeeded here by partner funding research, what price do you put on Confidentiality & Exclusivity….”
In order to achieve biotech partnering success, it is vital to design a carefully structured arrangement. It is necessary to look at the relationship throughout phases, and to define responsibilities, deliverables, and resource commitments for the first phase, always considering that something can change, thus, an alternative plan must be established in the agreement. At the end of each phase each partner must have the opportunity to commit again or leave, with clear terms that should be agreed upon.
The point of all this is that to invest in a BioTech company you must do your own research, understand the timelines and potential pitfalls that may arise during the whole process to commercialization, and understand that the company that you invest in may not have control of all of these steps and in OBJ's case, is tied up in Confidentiality clauses,
“Long term viability should be the important consideration, not short term gain”
Starting a sustainable biotech company means having the right blend of management, access to cash, adaptability, timing and location. By recognizing, leveraging and capitalizing on all the possible opportunities, you will give yourself a head start on the road to building a successful company. After all, although it can be done, starting a biotech business from scratch and developing it into a truly global player that can evolve and adapt with the industry is something that almost “defies natural selection” in today's competitive market. So don't focus all your energy into a drug that most likely will not succeed; rather, look to build a unique business, with great science, that is “forward-looking” and can adapt to the market “several years” from now. This will make your company more attractive to VCs at an earlier stage because you are minimizing investors' risks.
With these elements, combined with a long-term vision, an entrepreneurial spirit, good management, drive and passion, you will possess the keys to having a successful biotech company
“On average, the entire biotech process, from scientific discovery to commercialization, can take up to 15 years. This reality exposes entrepreneurs to a plethora of critical and time-sensitive decisions. For example, how can the company attract capital and collaborations without a tangible product in the early stages of its life cycle? Once the invention is in hand, who can the company partner with for manufacturing, design, and marketing—especially since most small biotech companies do not possess all the necessary competencies to make their discoveries available to end consumers?”
“The respondents in the sample talked about their continual efforts at establishing collaborations around the globe. The GNM founder remarked, ‘‘Although we are a small company, every day—yes, every single day—we try to form alliances. When I am not on the phone with the venture capitalist, I am trying to see who we can potentially collaborate with.’’ Therein lay a paradox. On one hand, interviewees realized that to survive in a competitive environment when they lacked in-house complementary competencies, they had to seek out collaborations with other companies. The founder of VX said, ‘‘We are not developing something that is out there. This is cutting-edge stuff. You want as much leverage and protection [as you can get] going forward. But we also realize we don’t hold all the pieces, so we have to collaborate with other players out there.’’ “On the other hand, biotech is an industry of closely guarded scientific discoveries and patented information” . Interviews indicated that forming alliances is not a straightforward process. During the pre-invention stage, collaborations are difficult to establish because of the absence of a tangible product and a high failure rate among small biotech firms that causes other firms to adopt a cautious approach. Post discovery, biotech firm’s face a new challenge as the CEO of GNM explained. ‘‘When we did not have an innovation, the dilemma was how to sell just an idea. Now that we do (have a product)—we are in this netherworld of having an “incredible discovery” that you want to talk about (for leverage or out of excitement) but can’t tell all about because its “value” lies in the secret; and if you “told it you have lost it” .’’ Despite a lot of collaborative effort at a certain level, the very nature of biotech and intellectual property legalities requires that “trade secrets be protected up to a certain stage” . This paradox makes forming alliances more difficult than has been mentioned in the literature”(source)
What is the fall out rate and where do most “potential partners” fall out in the process? Why do they typically fall out? Roughly 5% of original submissions move forward to a contract. We make approaches as well as inviting unsolicited approaches, but the former tend, inevitably, to have a higher hit rate. (Jeff Weedman P&G)
“Intellectual property rights, if exploited correctly, have the potential to create immense value for businesses, enabling access to funding. Thus, there are many reasons why companies seek ways to value IP and these reasons may affect the valuation method needed”
“Confidentiality agreements are generally a precursor to more definitive investment or licensing agreements entered into after due diligence has been completed and a plan for commercialization has been developed. Entrepreneurs generally seek to include in these preliminary agreements language that disclaims any representations and warranties with respect to the proprietary information to be disclosed during due diligence. Such representations are warranties are more appropriate in the context of definitive agreements when the business arrangements and related representations and indemnities can be spelled out in detail”
“Confidentiality agreements are critical. The starting point should be “enforceable agreements” with every employee and contractor involved in the business. Beyond that, it is important to require third parties to sign confidentiality agreements whenever they need access to the trade secret. This can encompass a diverse group of people, including potential investors, suppliers, customers and service providers.
Finally, timing is everything. In trade secret law, it is important to remember the oft-quoted adage that “you can’t shut the barn door after the horse escapes.” Once a trade secret has been publicly disclosed, the trade secret protection is permanently lost and cannot be resurrected by tardy attempts at secrecy. There is no substitute for the entrepreneur paying careful attention to trade secret protection at a very early stage of the business’ life”
(20min delay)