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Avastin and PhIII results, page-15

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Mrdog

105 Posts.

31/10/14

15:32

Post #: 14217380
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Originally posted by Teddyward ↑

Peeters study got 4.9 months ( average across many recent studies is 4.7 months ) and we got 5.5 median PFS . Peeters got 12.5 months overall survival (OS) and we got 14 months. Still would not have been 6 weeks additional PFS as we only got 0.6 improvement ( or 0.8 if you use average) that ACL needed for approval.

ACL will look at why. They will do statistics on subgroups to see if there is a group of super responders in control and why as HA-I could with further trials be used in those subgroups. One suggestion has been 1st line treatment with avastin but I can't get that to add up on the surface until we are told more about the trial. Reality is another expensive trial and as it is a subgroup it narrows the end market so you are no longer hunting elephants just buffalo. There may still be value there but our phase 3 was small so by the time you drilled down subgroups ( if they have correct data on race, previous treatment etc etc) teh subgroups would be even more underpowered. The data is still valuable until it is determined that HA-I doesn't work or has a different mechanism to what they have proposed from lab and phase 2's.

It is a postmortem and ACL oncology is on the slab until data can show why the control out performed and why HA-i underperformed. ACL Oncology shouldn't be buried until the coroner ( TB) quickly and relatively cheaply discovers reason for performance differences. Unless it is something consistent and obvious that they hold data for it will be speculation. I want that process to proceed as it is the quickest way to add value ( above fonda earnings) and future growth of any scale back to ACL oncology.

At the AGM board and management should clearly set out what they are going to do with the scenarios that will present themselves so shareholders know what they are investing in be that a spec oncology platform if the data supports it or a cashbox distributing fonda income. We need to know what they will do if Ongology is dead and buried or if it isn't. Put a exact decision time frame and cost of how much $ if any need to go into oncology to prove if it is alive.
Either way I believe a decision would unlock and add value from where we are as it gives direction and a endpoint focus for the market because at the minute we are directionless and doubt over what will happen with cash so we are being discounted by the market significantly. . I don't want ACL sucked dry by ongoing oncology unless there is a specific achievable target evidence supported and presented to shareholders ( possibly independently assessed) with phase 3 data they should be able to get a partner to fund that if they really do have science that has prospects. .

A few old posters who have returned are promoting declaring oncology dead and burying it straight away as that is their fastest way of doubling their money. ie ACL is a fonda cashbox with next to no running costs and distributes cash divs. On teh surface a simple strategy. They have bought at 10 c and would dump at 20 plus or just on the bounce when the decision is made- sooner the better for them. . The reality of that is that it takes a lot of $ and time to wind down the company, pay every one out and it means managemnt put themselves out of a job ( how often do you see that) .. At the AGM management need to say they will do this if it is found that there are no prospects for the current oncology platform having short term value increase. ie they found the screw up and science is still good.. . Fonda cashbox is problematic in all aspects other than a quick trade as you don't need a listed vehicle to do that. A large holder or several if smart should band together and take over small holders ( probably doing that on market now?) and then they can force clear out of management and get fonda distribution . Problem is no one has access to exact DrReddys agreement and conditions . It may be the best strategy depending on what is discovered but shareholders need a deadline and information urgently.

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I spoke with ACL. As with shareholders, Board, management & staff are all in state of 'shock'. I got impression there will be no quick, significant announcements. Several things are underway:
(1) detailed analysis of Ph 3 results - will look at issues that various HC posters have mentioned - geographic differences, prior patient treatment histories, possible KRAS issues, patient sub-set performance, etc, etc. This likely to take about 6 weeks before they feel confident about saying anything.
(2) Based largely on above, conclusion re any residual HA-I value re colon cancer; value in continuing ongoing Ph 2 Chime & SCLC trials, and value/potential of overall HyAct technology platform
(3) An immediate review of budgets/costs/finance etc. Budget cuts a high probability
(4) Review of fonda & VAST activities, potential, options etc. Some expectation (hope?) that fonda revenues may improve a bit going into 2015 - end of DRL process improvement contributions, and Mylan taking over Arixtra/AG - thought that Mylan more focussed on profit than volume - Apotex very much volume focussed. But, at tops I'd guess fonda revenues at $10m to max.m $15 m/year. Say, abt 15-20 cents/share
(5) By early/mid January completion of overall strategic review and announcement re forward plans

I hope I'm wrong, but probable that only significant announcements at AGM in a couple of weeks may relate to budget cuts. I would have hoped they'd be able to give initial thoughts re issues in Point 1 above, but I have my doubts.

I made the point that I hope the budget cuts start at the very top and that it would be good to see a large chunk of forward fonda revenues passed directly to shareholders as dividends, even if only 2 cents/share. But, if they decide there's continuing real value in HyAct that needs be internally funded, I wouldn't hold out great hope for fonda dividends.
In my view, depending on any residual HyAct value, what can be generated from fonda, and what value in VAST, etc - in 6 months time could be looking at overall share value of between 15-30 cents. I personally don't see much value in selling out now at 10 cents

ACL Price at posting: 10.0¢ Sentiment: Hold Disclosure: Held
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