Gav,The deal is NOT significant in cash terms.However, it IS...

Gav,

The deal is NOT significant in cash terms.

However, it IS significant in the following way:

i) Endorsement of the Phylogica "platform" technology by a global pharma; and

ii) Extension of this platform into the "new frontier" of the intracellular matrix.

We still have J&J, Wyeth (Opsona), Dynamic Microbials, burns and neural trauma compounds. Each of these areas will likely produce "lead compound" deals. To this we can add, in the fullness of time, a new class of drugs based on the Roche partnership.

Suggesting that PYC.ASX is a "sell" based on the lack of apparent cash for the discovery phase of the partnership is weak on the following basis:

i) The value in the partnership is as outline above ... these partnership deals are rare because foundation technologies for new classes of drug development are rare.

ii) The drug deals will follow with $1billion "headline" valuations. The chance of a blockbuster is greater in a greenfields technology development compared with sifting over old ground. Phylogica has the screening and drug development technologies ... for now they are advancing on a very wide front (applying Phylomers to a vast range of disease states, in partnerships with those who have the screening models and capital to take promising compounds through to drugs.

iii) Development projects with big pharma mean that the patent estate can be expected to "broaden" and "deepen" - this is the key to ultimate value in biotech.

Do not underestimate the significance of this deal. The danger in selling the "golden goose" for the apparent low value of a single "golden egg" is a classic situation of "grasping defeat from the jaws of victory".

If you are a holder ... consider your position, very carefully, before you take a step that could make someone else very wealthy.