any news today?, page-51

Yep. Correct.

From memory I had QRX with cash at say $15m and 164m share. For a cash backing of 9 cents a share.

But I expect QRX to trade significantly below cash backing in the not too far distance for several reasons.

First reputational damage. Rightly or wrongly a significant proportion of the shareholder base will feel betrayed by QRX who understated the risks and conveyed the impression approval was virtually a formality. .

Second the probability of success following three CRLs is nearly zero. Fail+fail+fail=more fail. QRX will waste the remaining money it has going down a path it is unlikely to succeed. Even if a safety advantage is in fact there (which is very unlikely) the bar will be set so high to be beyond the capabilities of QRX to demonstrate it. We have an indication of this when QRX was reluctant to enter into a SPA several years ago.

Third. Even if by some miracle a safety advantage is able to be shown it will take 12 months or more. There was already opposition from the anti-abuse lobby who believe Moxdou is much easier to abuse than the product it would compete with. Opioid policy will become tougher over time. And the regulatory goalposts may move. Very few people think the world needs more opioid products without some very significant efficacy or safety advantage.

Fourth. The remaining products in the pipeline arguably involve more complex regulatory hurdles. They require probably a fair bit of good luck, the ability to pick up on subtle nuances and canny judgements about where moving goalposts will lob to next. In other words the level of difficulty is quite a bit harder than navigating through the combination rules which are relatively straightforward. Students who fail in Grade 1 rarely go on to become top of the class in Grade 2.

Fifth. US interest will take a nose dive. The lack of transparency and the fact that nothing will be done in response to any perceived misleading statements by QRX will put a dampner on investing in Australian life sciences companies generally and in QRX in particular. Its bad enough losing money at home let alone to companies on the other side of the world.

Lastly however US interest in short selling our stocks should improve considerably. The ability of US investors to more easily short stocks will insure that any bounce in QRX is very short lived as it winds its away towards true value – which is basically zero.

Every 5 years or so I relearn rule 101 of investing in biotechs - which is never to hold for a binary outcome. Im a slow learner.

All the best to holders, Southoz