Always enjoy your financial commentary Madamswer … because its...

Always enjoy your financial commentary Madamswer … because its quite a different approach to biotech to someone like myself with a different background.

But interestingly despite the different approach I think we get to the same answer. The retail side of this will be very hard get over the line.

Many shareholders might emphasize with SI that the cost of living pressures of a New York lifestyle are intense. But they will have very different priorities for to solve this problem.

They might suggest that Si could start with “fully finalising” the partnership agreement for the adult GVHD trial. This would produce an immediate single digit million dollar saving. As they say in the classics a penny saved is a penny earned.

Then he could finalise the “very advanced” partnership negotiations with big pharma. A $50m payment (not subject to certain closing conditions) would solve all the problems.

Or “in short order” he could resubmit the child gvhd BLA. Approval (which apparently is in the bag with no further trial required) would produce a share price of $2 with retail holders jumping over themselves to help SI with his further trials.

With such easy obvious alternatives why the desire to squeeze the last drop of blood out of his loyal followers.

An insurance policy.

There does seem to be an unofficial three strikes and your out policy for penny stock biotechs. The third CRL usually heralds the departure of the CEO and often times the company itself.

So how did MSB get to the position of staring a third CRL in the face?

Five years ago MSB were told by the FDA to do an adult RCT. The FDA’s AD Com briefing notes (p.11) reported that during the rolling BLA MSB were advised:

“FDA recommended a new randomized trial of remestemcel-L versus standard of care for treatment of steroid-refractory acute GvHD, indicating that such a study would likely be feasible in the adult population. A randomized, controlled study in the adult population could potentially also confirm clinical benefit in the pediatric population, depending on the results.”

SI decided instead of doing this trial he would battle it out with the FDA. But when SI made this decision time there were plenty of other irons in fire. In other words, he never intended this to be the hill he would die on. But as we know all those other irons all fizzled out; the trials all failed and the partners all walked.

By defacto the child gvhd BLA resubmission has become the Little Bighorn for SI’s last stand. And just like for Custard SI knows that this is not a great hilltop to fight a last stand on.

But shareholders don’t know this. They believe that the FDA has actually told MSB that an expensive, risky and time consuming adult randomised controlled trial will not be required for child approval. Just fix the potency assay problem. And so with the potency assay problem nearly addressed why is an insurance policy needed at all. And more to the point why should they have to pay for it. Hence the tough sell.