a morning joke sth cross equity report

Did a bit of trawling through my notes and archives. Here's the PRR research report done by Southern Cross Equities back in oct 2004. Share price was 14 cents then. Eugene Kopp had rtaken over as chairman and cleaned out Frost and Relivens rabble and was going to reinvigorate the company with a raising at 12 cents.

Well two and a half years later Kopp has reduced shareholder value by 61%.

Best of all the mob doing the raising and getting paid for it were so conflicted. Just look at their research conclusions

"After adding up our individual valuations for the four projects within Prima Biomed, and then accounting for the proposed placement at 12 cents per share, we valued the company, on a fully diluted basis post the capital raising, at 49 cents per share base case and $1.22 optimistic case (if $5.0m raised) and 39 cents per share base case and 92 cents optimistic case (if $10.0m raised). We therefore chose as our twelve-month target price 35 cents per share, which was a 10% discount to our base case valuation on a $10m raise"

Its a wonder that shareholders let company's and management like this get away with such blatant false reporting.

If you take SCE 12 month target as the benchmark of performance for Eugene and his management then PRR management have reduced by a massive 85% from where the price should be. Remember a 100% reduction means no value left (ie share price is zero).

Take yor time a read it....

PhIIa results due December 2005 ! Agian mis information that was never contradicted by PRR.

Now tell me if you all still believe PRR deserves your support.

The SCE report:

Prima Biomed to raise $5.0-$10m

What is Prima Biomed? Prima Biomed is a Melbourne-based biotech company working on four projects from the Austin Research Institute, Melbourne (ARI holds minorities, except for Cancer Vac where Biomira also owns 10%). The four projects are

1. Arthron (85%) – an ‘upstream’ treatment for rheumatoid arthritis

2. Cancer Vac (76.5%) – an ovarian cancer treatment

3. Panvax (85%) – vaccine technology

4. Oncomab (85%)– monoclonal antibodies to treat cancer

The deal: Prima wants to raise between $5m and $10m at a price of 12 cents a share. The shares will be issued with attaching 1 for 3 free attaching ‘twelve month loyalty options’ which will be exercisable at 20 cents expiring in 24 months for those subscribers to the current placement who hold the stock for the next twelve months.

Arthron (85%): Represents a next generation rheumatoid arthritis drug based on the FCgRIIa receptor, a good upstream target for rheumatoid arthritis and a billion dollar a year market for ‘TNF non-responders’. The Arthron technology is ready for licensing and is attracting interest from overseas Pharmas. We value Prima’s interest in Arthron at $20.1m-$54m. "With that valuation what did Prr get for it !!"

Cancer Vac (76.5%): Owns a powerful ovarian cancer treatment based on technology that primes dendritic cells to go after cancer. The technology performed well in Phase I and is now in Phase IIa against ovarian cancer, where there are few current treatments and there is the possibility of an Orphan Drug indication. Interim Phase IIa results are expected in December 2005. The technology has been partnered with Biomira of Canada. We value Prima’s interest in Cancer Vac at $10.5m-$20.5m.

Panvax (85%): Owns interesting vaccine technology that makes use of nanoparticles conjugated to antigens to produce good response from both arms of immune system. There has been great in vivo data in malaria, foot and mouth, RSV and cancers, and good collaborations with such scientific establishments as the Institut Pasteur. The technology goes into the clinic from 2005 as a potential colon cancer treatment. We value Prima’s interest in Cancer Vac at $19.4m-$63.7m.

Oncomab (85%): Owns some antibodies to Cripto-1, an antigen expressed on 70% of cancers. Oncomab has generated good in vivo results against breast and prostate cancer, and its antibodies are now being humanised with Medarex. A progress report is expected before the end of 2004. We value Prima’s interest in Oncomab at $8.9m-$31.4m.

This stock is significantly undervalued: After adding up our individual valuations for the four projects within Prima Biomed, and then accounting for the proposed placement at 12 cents per share, we valued the company, on a fully diluted basis post the capital raising, at 49 cents per share base case and $1.22 optimistic case (if $5.0m raised) and 39 cents per share base case and 92 cents optimistic case (if $10.0m raised). We therefore chose as our twelve-month target price 35 cents per share, which was a 10% discount to our base case valuation on a $10m raise.


$5.0m raised
$10.0m raised

Raising $5m
Base case
Optimistic case
Base case
Optimistic case

Cancer Vac ($m)
10.5
20.5
10.5
20.5

Arthron ($m)
20.1
54.0
20.1
54.0

Panvax ($m)
19.4
63.7
19.4
63.7

Oncomab ($m)
8.9
31.4
8.9
31.4

Cash now*
1.8
1.8
1.8
1.8

Cash post raising
6.8
6.8
11.9
11.9

Total value
65.9
176.4
70.9
181.4

Shares on issue post raising
115.8
115.8
157.8
157.8

Value per undiluted share
$0.57
$1.52
$0.45
$1.15

Cash from options ($m)
7.9
7.9
10.7
10.7

Total diluted value ($m)
73.7
184.3
81.6
192.1

Total diluted shares
151.3
151.3
208.3
208.3

Value per diluted share
$0.49
$1.22
$0.39
$0.92

Share price target (10% discount to lowest base case)
$0.35




* Figure obtained after discussions with the company








Recommendation: Prima Biomed is a Speculative Buy for Knowledgeable Professional Investors