Well lots of speculation on HC.
Here is my take in regards to the recent announcement regarding Scott's appointment.
BACKGROUND
I have talked to Scott on and off for around 5 years. The first time I ever contacted him was because of my first ever PAR concern and that was after the very brief research I did involving GLP-1972, a potential competitor back then. I was worried so I reached out to Scott. At this point I had read Scott's articles on PAR, here are links to them if you haven't read them:
GETTING THE ANSWERS BEFORE THE TESTTHE NEXT AUSTRALIAN BLOCKBUSTER BIOTECHON THE ROAD FOR FURTHER DUE DILLIGENCEThose links above (single left click on them) are worth a peruse if you haven't seen them. I fondly remember reading them a few times, I was most interested with his experience of the Bene factory, most insightful. It gave a glimpse of what's involved, the barriers to entry and of course that iPPS was a real product (Don't forget I hadn't conducted much research for myself at the time).
The Bene Tour that Scott attended.I left a message on his VM a bit too late on a Friday and thought I'm not going to hear from his office. If I did, it would be from some lower level analyst and I'd prob learn virtually squat.
I was proven wrong. Not only I got a call back later that arvo but I got a call from Scott himself. We had a good chat on the phone back then and he took me through the competition and gave me reasons why they weren't at all concerned. Since then I have learnt a lot about our drug and why and how it works compared to the competition that's out there. I'm still learning of course, I can confidently say I will be learning lots well into the future on this unique drug...it's quite a product. The take away...Scott got back to me promptly, I wasn't even a client of his. He was swift..he was knowledgeable...he took action on the spot and mate, he entertained my questions.
SKILLSA lot on PAR HC won't know who Scott is, others will have pre conceptions of him, and others still will wonder why is a Fund Manager being asked to do some consultancy work for PAR and of what value is it when we have others like Plexus that are tasked with finding us suitable deals anyway?
All good questions, I hope to answer them here at least to some extent, read on!
Scott has a lot of critical skills that are acutely needed from my view point. As you may have read I research a lot on the drug side and what it can do. I haven't focused all that much on the corp side. It's here where we now need a lot of focus. I personally think Paul has done a good job getting us from drawing board to micro cap....
PR..from concept to micro...now we need to leap to the next stage...I believe PR has built several layers well into our foundations and has progressed this. Sure it has taken a lot longer than we all would have liked...but the KOLs and the programs they have in place are superb and indeed the authorities will be very interested in the data that's being finally produced currently and has been produced in the past. As others have stated, this is evident as an example, by such designations as the awarding of Fast Track and I believe there is more to come here... watch this space...
The number of Australian Fast Track designations are limited, its outstanding that we have this. It's a testament to what PAR have done that we have a successful SAS program in place, a successful EAP program that's been executed in the USA and that we are attracting the likes of professional bodies like the American Ex Pro Football alumni associations that are already resulting in pre intake numbers for us. To have CRO's asking about us and wanting to be part of it, and authorities like Anvisa and Mena along with TGA...that speaks volumes. Paul and the company have achieved this. I for one, can't forget this.
But getting back to the Corp side, yeah we do need help in filling the gaps. Scott has been appointed as a consultant.. Umm no, this does not mean he is going to take over...this does not mean that other current PAR roles will be made redundant. He will be utilising his expertise to ensure we are on track, that we have the best people on board, that the company is guided to find that perfect mix between doing a deal too early and doing one too late, ie getting a deal that's commiserate and balanced in light of what we have.
What makes him qualified for this?
After running the FiftyOne Capital fund, he was CEO for a multi-billion dollar family office for a successful technology business founder. He understands the corporate finance world, the funds world and importantly, understands structuring of deals/raising capital. Having had some well deserved time off and given how large an investment PAR is for him, it made a lot of sense to spend his time and energy getting this key Par investment to succeed and the advisory role was perfect.
Don't forget, for Scott to earn his keep he has to get the SP up and moving, it's the ultimate charge and incentive for him.
THE ROLEScott's role with PAR is primarily around assisting with corporate advisory and getting a deal – i.e. liaising with existing advisors (Yafo/Plexus) and to assist in getting a deal done as it’s progressing. In Mozz Speak? Forming a distinct and clear alignment with shareholders to best progress us. It's not a duplication, it's an assistance, a liaison and finally it's a mandate to really drive this process. It is also to look and consider viable alternatives and assess them to see if there are better options or pathways. It is to execute this in a TIMELY manner...no more dilly dallying.
Paul will be the frontman...but think of Scotty as an ace wingman. We cannot lose Paul, it is due to his fortitude in the Medical and Scientific fields that we are even here today. If he had not forged the partnership with Bene, if he hadn't come up with the programs with the team...well I wouldn't be typing this out here today...I wouldn't have done any research and to be quite honest, I barely would even know what OA is and who it even affects.
The part I love is that Scott is not just some independent contractor that's too clinical, that doesn't know our full potential, that doesn't understand our drug and why....WHY is it better than anything else... He will work closely with PAR. He is aligned. Yes he has a vested interest but he is also an astute manager that will CUT through the BS and the red tape as much as he can. He understands the product but more importantly understands capital markets.
From what I understand, Scott has no interest to be elected onto the board.
Please also note: Yes Scott is incentivised to get our SP moving, but this is a lot better for preserving cash over a salary and is structured on delivering results for shareholders. This is good for us despite it having some dilutionary effect, it will only be marginal and we prob won't care a lot if the blessed SP does move upwards! The other factor that a lot don't realise is that if all the options vest and are exercised, Scott would need to chip in a cool $7.5 million of his own cash to exercise.
I see Scott's appointment as a very welcomed move and a step in the right direction. This is a guy that is going to work hard, yes for himself, but for us in tow; In terms of his package, the nominal component is equivalent to a NED wage and mostly will go towards analysis and other such expenses as part of the role, so nominal! Remember, If Scott
doesn't succeed he would lose out on his shareholding (like everyone else).
TEAMWORK
I believe this is one of the best ways forward for us as holders. There needs to be a great link between let's call it Science and the Corp side. In actuality it's a bit more complex than this, but let's leave it at the high level. He needs to manage both sides and ensure they are on track, one should not trump the other. There is no point for us to have a super duper product but we run out of vital cash to see it through. There is no point in having the best CFO and Financial dept. if we don't have a decent clinical program supported by an ace Clinical and Reg. teams! (I had the good fortune to meet the Reg team for the first time at the AGM, they were delightful and entertained my questions).
Scott will cut through the red tape as much as possible, he will get things done.
I understand the frustration, the dilution, the pushing back of timetables..but also I acknowledge to be able to get the quality of the KOL's we have on board, the PI's...all the CRO's...it is a testament to not only to PR but the staff. I have not at all heard many comments about how good the PAR staff are in the years at HC. They are flying under the radar....I do not have enough opportunity to thank them...I will try my best to articulate this though, any time I meet them. Considering how few staff we have, and considering what programs are in place and what's to come (my opinion)...it's crazy amazing. They have worked hard for us and have achieved some incredible results so far.
Yes it's one thing to work hard, it's quite another to achieve the great results we have achieved...for such a tiny company to be represented at many different forums and seminars, to presenting our wares to the investment community...roadshows etc. Sure, we still have a lot to do, it's the next phase we need help with.
Scott will guide this through and ensure this is a well oiled machine...specially for the all important next stage...micro cap to small cap.
I get a feeling that Scott is more than acutely aware of at least some mismanaged capital and timing thereof and the corporate side requiring a mighty lift up, it's paramount at this particular juncture. I personally would've loved this if Scott was appointed months ago. Better late than never.
I know for a fact that Scott realises the magnitude of the excellent science and he not only has seen the results from many others, he has seen it first hand.
Yes, he has been a very happy recipient of iPPS himself.
STORY TIME
In the old days Scott told our story well (just read those three links above at the start of this Mozz post)...this is what we need once more. To tell our story well, to utilise the amazing data we have seen to date but to really explain it to the new guys, new investors and new funds. Yes there is a fair bit of explaining to do. It's not just the science and how the drug works, it's also on the corp and the financial side, to give them the confidence that we can go forward and that there is a lot of excitement and brute positive progress to play out.. We need staff, we need directors to really be passionate about what we have, to be really excited about what we own and to ensure we sell this thing like no one ever has before. Why?
Because the product is that good.
The world has not seen this before.
There are only a very limited number that know what iPPS can actually do. Imagine...you reading this....there are very few that truly know what is coming.
VISIONARY
It's one thing for someone to like a stock play...it's quite another for someone to be passionate about it. Scott is passionate about it...he believes in this stock. I have personally seen him at work, I think the expression is "Dog with a bone". The bone is big, but the teeth are razor sharp...there won't be any loose ends.
Like many (including me) I don't like that we are so down to the wire...it's a worry, it
weakens our bargaining power...but I personally feel Scott will assist greatly in righting the ship. For any of you that think he is a threat and it's a take over. A coup? This is false.
The trick here is that one needs to understand a few things:
A) What our product is capable of
B) The ability to work WITH....or work ALONGSIDE the PAR team...to have HISTORY with PAR so you can understand where they have come from and what are the nuances of this company
C) An astute financial and corporate acumen
D) The ability to take on change and steer and guide it
E) Access to an investor network
F) Deal making experience
G) Motivation and DRIVE
I believe Scott has all of the above....in spades.
I can understand how new investors or people that don't know Scott well would have a percentage, a degree, of worry. Change always will carry risk, but in our case, as most of you understand, change is desperately needed here. I hear your cries...We cannot continue on our path of dilution....Scott is supremely aware of this and is aligned with arresting the share price collapse..
QUOTE TIMEThere were two quotes I got from Scott in the past...one was the major one that drew me further into PAR and spawned a deeper research drive. Realise, I have never researched ANY company (though I LOVE investing and read and listen widely) like PAR ...I still, to this day remembered my reaction when I read Scott's heading below:
“This is the most extreme asymmetric risk/reward trade we've ever come across”.The second quote also made me sit up...it was on a phone call some 4 years ago...he simply told me..
“Mozz, this could be the best investment opportunity that I will ever come across”.I digested that for some time....Scott is a successful fund manager, he has had a plethora of opportunities that has crossed his desk...he has a large network, he has travelled many times for many corporate deals and successful ventures. He has also seeded one of Australia’s most profitable technology business ever – VGW. If PAR can succeed like VGW has, we will all be very happy investors – but good things take time!
A success!...and finally a new quote for you:
"The key is getting this to market and making sure we keep the economics as best as possible for shareholders".PRAGMATICLook as I have said, I'm also a shareholder and one that has followed the company for a long time. I also feel disappointed when our share price is not only non reflective of the true value but it has been dwindling for not months but for years. However, I see what other companies have done...there are so many examples where they flatlined, where they channelled for years. Yes we are different as we are running out of cash and we can't really stomach another dilutive CR...but I do still think there is positivity and there is hope. Yes we need help, I believe it is coming (Scott is one step in the right direction). This play can change very rapidly...We do need to watch it closely.
NEXT STAGESo what will Scott have to do? Well a lot...he first needs to get up to speed on the business, he is already the best person for this as he was involved all those years ago and knew the company inside and out.... he will then get a sense of where we are and what is next. What is that best balanced middle ground where we get a deal that's still commiserate of what our value is...but not hold out for too long. He will look at our funding and what is required to strengthen us. I also believe the non dilutive funding will play an integral role here but it will be balanced with what's to come.
I would've loved to have Scott on board some 6 months ago ...we are a bit close to the wire here...but at the same time the timing of his appointment is really good.
- We wait for the FDA feedback
- We wait for Anvisa feedback
- We wait for other milestones...
This gives him time to get back up to speed and then to formulate plans and guide us through.
There are many things in this story that are happening and have happened in the background that we aren't/weren't aware of. A couple of examples...
Fast Track came from nowhere.
The on boarding of the Canadian program arm....this was a complete surprise to all of us. We need more such positive surprises...Once we get that licence, these areas/regions will be highly accretive and it will happen very much faster than we think (my views). Peer review...yes it takes ages, some question it still and ask why are they hiding the data. It takes a while to compile and acquire feedback then do the rounds of changes with the reviewers...005 I believe will get combined with the incredible data of 008...when it eventually hits, it's going to be an even greater read than our previous 008 announcements - my views.
The science has never been seen before. There simply is NO pain medication that has the efficacy BUT concurrently has the immaculate safety profile. (I think of drugs like Ozempic, what a rise to stardom, how many Billions has it made for the holders...BUT at the same time I hear of terrible side effects and problems, the pain it causes when one has to wean themselves of it. Compare that to our drug. Our drug is NATURALLY based....our drug has none of this rot.
Guys, what is our Primary end point in our P3? It isn't something technical like Bone Marrow Regression. No it's not what percentage of the Higher Weighted Hyaluronic is produced...its not even how much CTX II (One of the FDA's Biomarker consortiums' key OA marker) is falling or even Cartilage Volume levels....
Nope....
It is Pain.
Plain and simple.
How much knee pain reduces from baseline compared with Placebo.
All the other fancy stuff comes later and is an adjunct. A pretty good adjunct, but it's in addition to the Primary.
This story needs to be to told to the world. Just because we have a magnificent data set....this does not mean that we don't need help selling our story. We need it to be done in the right forums and the right way and it is this bandwidth I believe will be now expanded and addressed...
I am firmly of the belief that Scott as a consultant will go a long way to adequately guiding this ship but also bringing a lot to the table and to ensure we strike correctly and quickly in terms of deal prospects. He has worked well with Paul in the past and both of them will form an excellent team to lift us. It is in their interest to succeed and no doubt will work well to achieve success.
This is our next level opportunity.
Mozz
PS: Usual caveats apply - best to DYOR
Ref:
https://clinicaltrials.gov/study/NCT04809376 
(20min delay)
