BIT (ASX) Ann: POSITIVE FDA GUIDANCE FOR COVID-19 CLINICAL PROGRAM

Originally posted by GiddyYup: ↑

Biotron announcements always need to be read carefully.

This announcement does not indicate any sort of approval has been received and does not guarantee a phase 2 trial. The announcement merely advises that the FDA has now responded to a bunch of questions asked by Biotron so that the company can consider its possible next steps. In itself this feedback was expected and inevitable. To determine if the feedback to individual questions posed by Biotron is positive or negative we would need to know both the questions and the answers, none of which we are aware of. The company seems to feel that the answers have been helpful. Thats good but this news in largely benign and leaves shareholders to go back to sleep while waiting for another announcement about a possible phase 2 design and timing.

The market did however respond to the last paragraph which fuels uncertainty re the funding and a possible departure from its traditional rights issue and options funds mechs. While Biotron has talked for most of the last decade about funding future trials (particularly phase 3) and commercialization via a partner deal, this has never come to fruition in the past. The SP is relatively high ATM so the inference that they aren't looking at equity based raisings could be seen as either good news or bad news depending on your views on the other possibilities.

On one hand capital raisings are often done at a price below the current market price (because who would buy more shares from the company directly if they can buy them cheaper on market?) and the net result of this is usually a short term boat anchor on the SP. Therefore an announcement which "infers" what there will not be any equity based capital raising should be positive for the SP, but thats not what has happened here.

On the other hand we have the concern as to the nature of partner funding. The little guy needing the funding (BIT) often is seen as the beggar in the negotiation. Remember Biotron have been seeking a partner for trials and commercialization for BIT225 as long as most of us can remember. How much of the IP which BIT holders have funded over the many years will still be owned by BIT holders under such an arrangement? Partners will presumably want a big piece of the pie. Don't get me wrong, Biotron was always going to need to go this way and have been honest about their intent to do so for the decade or so that I have been following them. Overall a partner (of the big variety) will probably be the best news BIT holders have heard in many years as it might infer that those industry players who have the ability to commercialize BIT225 have finally shown real interest. That is however still a big "if" as the announcement doesn't suggest that there is any actual interest from a potential partner at this point and a decade or so of announcements about seeking a partner have not resulted in any announcement about finding an actual partner. Lets hope this time is different !

In my opinion the worst case is the words "and non-equity funding sources". This might suggest Biotron could start borrowing money. This would possibly be alarming news. Generally companies start borrowing when their equity CR sources have dried up and with no revenue to repay the debt it can force the company into a downward spiral to debt refinancing on progressively worse terms. Its hard to see how this scenario could be good for shareholders or confidence. When companies with no revenue borrow rather than use equity markets to raise funding there is real cause for concern. Equity markets are still strong and there is endless cash still washing around so I can see no good reason BIT would go this direction however the announcement doesn't provide any clarity about other non-equity and non partner based funding so what are they referring to if not borrowing? There are other possibilities here which could be great news such as grant money however as they didn't actually say this it might be stretching to infer this from what was actually written.

In reality this announcement leaves more questions than answers. Realistically that is often the case which is why gambling on BIT shares is like being in and endless but quite fun suspense drama. Constantly hanging on to see what happens next but never getting any closer to knowing how the story will end.

10 years on I'm still here waiting for them to finally say something financially significant ! Lets hope this latest virus is the one BIT225 finally cuts its teeth on. Its such a shame to see so much R&D going to waste.

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That's actually a good post. Today's price action was a bit like a knitting needle to the side of the neck drive by if I am honest and I was a little troubled by some of the less than ideal language, ok - ambiguous- wording used in the announcement today.

I am leaning towards government grants and incentives to maybe get the business closer to the trial and hopefully knockout news a large swathe of us hope for.

Bit seems to have tapped into some long term mistrusting sentiment today. I am getting a general sense that a somewhat silent majority think along similar lines and that this doc today earnt their wrath in particular.

I still have hopes on the third day sp resurrection. 2 sleeps to find out I guess.

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Last 3.7¢		Change -0.001(2.63%)		Mkt cap ! $33.38M

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