reports and opinions (1)

Readers,
The first three posts were originally produced at Sharetrader and posted at H/C.
I have now transferred these to this thread I'll be using for "Reports and Opinions?".
Obviously it can be used by everybody. Others may want to use alternative threads.
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There are 3 posts, the Ozestock one has the original calculations. This one is dated 5 Dec 2002 and it will be immediately followed by another post:

PTD's Fighting Fund- Projected Cash holdings on 31 May, 2003.

Please refer to Ozestock PTD post 22072 where in item 1, I projected cash @ $12.13 mill. on Sept. 30, 2002; this with the proviso that I didn't know the value of a milestone payment made and had to omit that.

It now appears that it was about $3 mill. This then gives a total of $15.13 mill. However, the Announcement gives a very satisfactory $ $14.48 mill. (I am glad that the two numbers are close!).

(Errata: Item 1: $25.28 to read $ 25.28 mill.; also, "130 June 2002" to read "Sept. 30, 2002).

# # # Item 2.4 of that post gives cash holdings on 31 May 2003 as $0 mill. Because of the extra cash as discussed, this is to read **$2.25 mill.** (It is assumed that the royalties matter with J&J will be over sometime in April 2003).

Most of that spare $2.25 mill. will go on legal and other costs.

Abbot's HUMIRA (D2E7) drug will be approved by the FDA in Jan-March 2003. On first shipment, a milestone payment is due to PTD. If in time, it would increase cash resources.

Presumably, Domantis wants PTD's last payments in April 2003. Should there be a feeling that the dispute would last longer, then the Animal Division, value $35 mill. may have to be sold, unless a small loan can be obtained or shares be issued. Hopefully, it won't come to that.

That is my opinion,

Gerry
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This last post is dated 4 Jan. 2003:

PTD: $1.82. There has been some bad reporting in Australia and I want to rectify that:

1. The 2 milestone payments referred to won't come in till about end of May or later.

2. In the year up to Sept 30, the revenue from Abbott can only be some $US150 mill. at the most of which PTD will get some $A6 mill.in royalties. There is the customary delay of 60 days in payment as well and this could reduce this income.

Thus, the sum total to come will be after May and some expect to see the J&J stand-off to finish in April.

3. There is a payment to be made to Domantis. It is not likely that this will be delayed. Abbott could possibly be agreeable to paying these 2 milestone payments earlier at a discount, but that is not certain.

4. What I am getting at is that normally the money would run out in the middle of May as my previous posts show. However, if the dispute with J&J continues then PTD would have to raise cash some 6 weeks before that, say end of March or perhaps somewhat earlier.

5. It seems to me then that if it is possible, PTD may make a share placement at a discount. That would dilute the shares somewhat. Both J&J and PTD would be aware of it.

That is my opinion,

Gerry
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Dated 12/01/03
My previous post mentioned that a share placement would occur; it did.

There has been some speculation and I as a PTD Holder want to deal with that. The following content are my opinions:

1. Why no options or share issue to existing holders?
That would not be businesslike and would take too much time.
The element of surprise came into it as well. The idea is a bad one as it would take some 6 weeks to organize it while in the meantime the share price would have fallen.
That could present a problem for holders and PTD alike.

Placement was swift and was done in secret. The results were announced and because it was successful, the share price rose

2. Is it a big deal?
It would have been if the $10 would have come from 1 source. That would have meant that that source was willing to take the sole risk and that in itself would be a pointer.

In fact it was split amongs 3 parties and others so the exposure for each was much smaller. AMP already was a holder and presumably the others were as well. So it became a case of protecting one own's investment by protecting PTD.

3. Was there any risk?
I am not sure what the arrangements are between PTD and these Institutions. We really don't know the terms on which these shares were issued. It could have been some "deal".

The security is there: the 2 milestone payments to come are worth probably some $20 mill. alone.

4. What about the timing?
That of course is the most important question really. My previous posts indicate that PTD has enough cash to the middle-end of May.

However, I indicated that they would have to make a placement sooner, say March.

I believe that the placement at an early stage was a stategic move: to show J&J that PTD could raise cash at will.

Therefore, this may have deflated J&J's ego somewhat. The signal was that PTD would most likely not settle for lower royalties.

Gerry