Ann: AGM Shareholder Presentation, page-6

The stand-out information for me is about Epichem. It is already truly international and profitable, which is most impressive. The new information is the objective to aim for 1% of the market or US$10m in revenues by 2020 (perhaps A$11-12m?). This compares to A$1.89m in 2014. So somewhere between an A$8m increase in revenue at parity or $10m increase if the A$ is at 80 cents over six years. The bulk of this revenue increase should fall to the bottom line. Not bad at all. And what is important to me is this is not some pipe dream. The business was formed in 2003 and is already more than 10 years old. The creation of this business is a success and a credit to management.

The rest of the presentation is one for the scientists. My take away is that the low-key involvement and belief in the story by Professor David Morris is very important. He clearly is a “true believer” in PPL-1 and is more qualified than most to make that judgement. Of course, he is a thorough professional and therefore circumspect in how he communicates that belief. His presence at the AGM and the detailed scientific evidence that justifies his belief is the other stand-out information for me from the presentation.

Putting my shareholder cap on for a moment: This stock has a market cap of A$13m. Potentially this could be justified by Epichem alone. The real value is in PPL-1. Here we have two trials underway which the market is attributing little or no value to. It is certainly undervaluing this technology compared to the technologies of other biotech companies listed on the ASX which objectively are in the same position – but without a real business like Epichem in the mix – and with capitalisations of $50m, $100m or $150m plus. Of course it comes down to judgement, and this is where one can make a judgement about David Morris and other members of the management team.

This is definitely a real and commercially run business with scientific credibility and that is valued much, much less than comparable companies on the ASX. It is not a slam-dunk – nothing in this sector is.

But, on a risk-reward basis, it is attractive and on a relative basis compared to its peers it is massively undervalued.

Is anybody going to the AGM? Grateful for any feedback.