Good post, and these are all good questions, but they're almost impossible to answer without a great deal more information than we have available to us. Most of the analysis that I've seen has been fairly superficial, and not necessarily wholly unbiased. . My understanding is that BME (swelling caused by build up of excess fluid in the bone marrow) is usually caused by factors such as a broken bone, or a heavy bruise, or a chronic condition such as osteoporosis, and also arthritis of course. It seems that it most commonly occurs in the hips, knees, and ankles, and can be very painful. I suppose on one level, that's potentially a positive thing, as PPS could perhaps also be used to assist in the treatment of BME related pain following traumatic injury, as well as in treating OA-related BME.
I believe that to get a generic approved, even in the case of a non-systemic drug, there would have to be clinical trials against the named version to assure bio-equivalence. No idea how long all that would take, or what the cost would be, etc., but I suppose pharmaceutical companies do this sort of thing all the time.
From the announcements, it sounds as though PAR and Bene have got a good working relationship, and obviously, for Bene, this would be an opportunity to move PPS from a niche drug to blockbuster status, so I can't see either party having any interest at all in upsetting the applecart.
I do see four principal risks to the business model.
A legal challenge to one or more of the patents
A legal challenge to the exclusive distribution agreement
A generic PPS being brought to market more rapidly than anticipated
Non-sustainability of the proposed pricing model
On the positive side, all the clinical data is very supportive, and it does seem quite possible that some sort of deal can be put together before anyone else has an opportunity to make their move. Also, of course, I'm sure that the directors, who are very well qualified and experienced, and whose own interests are closely aligned with those of the shareholders, have considered all these issues in far more detail than anyone else, and have done everything possible to protect the company's interests on every level.
Probably, as long as we're under the radar screen, none of this is going to get much attention, but if it starts to look like there's big money at stake, perhaps expect a bit more focus.
I'm not a doctor, nor a lawyer, nor a chemist, so these are merely my uninformed observations, so don't take them too seriously, and DYOR.
On balance I still think the upside potential is sufficient to considerably outweigh the downside risks, so happy to add to my holdings.
PAR Price at posting:
$1.40 Sentiment: Buy Disclosure: Held
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