Worthind - I've been reading your commentary on AVX for a while...

Worthind - I've been reading your commentary on AVX for a while now, thanks it's interesting.

BUT, you are long and wrong on this one.

AVX is a dog.


As you are no doubt aware, the typical early-stage Biotech Business Model is for a junior to exploit some sort of competitive advantage. Typically, the competitive advantage is development of some propriety technology to a mid-stage milestone, after which the asset is partially monetized and de-risked via out-licensing to a larger partner who then takes care of the late-stage development and marketing.

In such a case, each party is adding value in a complimentary manor.

In the case of AVX however, a junior (AVX) in-licensed a drug at mid-stage development (post phase-IIa) from a larger partner (Shire).

This would be understandable if AVX had some core-competency at executing phase-IIb / III trials BUT THEY DONT. This is their FIRST phase-IIb and phase-III.

Thus, I'm scratching my head over what value-add AVX brought to the party, and more importantly, what AVX management knew/know that Shire don't (i.e. why do AVX think ATX is worth developing whereas Shire obviously came to the conclusion that they were better off without the asset - or at best an FREE option over development of ATC).

Or, AVX could have some major competency in HIV? Have they? No!

The AVX business model is topsy-turvy and that should ring alarm bells. If it quacks like a duck it's usually a.....money loser.


No doubt you've considered these key issues and have answers. I can't get past the following and would short this one until the cows come home:-

1) Why did Shire give essentially give the drug away? (company line is divestment of non-core assets; that answer shouldn't cut the mustard with a good investor).

More likely, they new that positioning against ATC was going to be a bitch.


2) Why haven't AVX dealt yet? (company line is that all deals put forth by prospectives are 'too low'). This is standard rhetoric from Aussie Biotechs', and again shouldn't cut the mustard).

3) Why don't directors own shares? (company line is 'the windows perpetually shut'.....bullsh*t)!



At best, ATC will be a supra-generic of 3TC. In which case, management would be better off pursuing deals with generics manufacturers, rather than chasing an unattainable dream with proprietary driven large pharma.

Cheers,