PAR (ASX) Blind spots

Originally posted by Denial: ↑
The following thoughts are not intended to be a crusade against PR rather an attempt to test the prevailing market thesis on PAR itself and question whether it in fact has it right at present.There are signs that is could be PR’s magnum opus moment (and shareholders by association) but there are also some early indications that this will not be a smooth run.Indeed, it may require an extraordinary conviction in PR himself to continue to hold a full weighting of PAR through the inevitable setbacks before the dream is realised.
The list of known and unknown risks below is simply my preliminary attempt to understand potential “blind spots” in my own thesis and so I do not expect it to be even close to an exhaustive list.The tip of the tip of an iceberg so to speak, and you’ll note some risks could be applied to most companies.

KNOWN RISKS
1
Clinical trial risk
This is currently being assessed as low due to existing P2 results and track record of PPS as a repurposed drug many.Many factors go into successful trial outcomes.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6092479/

1
2
Financial risks
Whilst we’re in good shape with cash in bank we’re now short for the completion of all the proposed P3 streams.

We’ll also lack visibility on realistic pricing and reimbursements until we get close to commercialisation.Best be very
2
3
Time overruns
Potential for P3 to run well past late 2023 (given external factors such as COVID) and therefore commercial launch delayed well into 2024/25
3
4
Personnel risk
Ability to engage and retain leading industry experts
4
5
Market risk
Bull markets eventual turn into prolonged bear markets the longer it runs in one continuous direction.Liquidity dries up during bear markets making future financing more problematic
UNKNOWN RISKS
1
End product labelling
The primary end point for P3 is pain not DMOAD.If DMOAD is to be the “holy grail” for OA why isn’t this the primary end point for P3? What influence will other proposed streams have on labelling and therefore distribution of Zilosul as a DMOAD? Will such labelling be enough to capture the medical professions attention given it’s not the primary purpose for prescribing the drug?Admittedly it won’t hurt to highlight that it reduced signs of key biomarkers associated with cartilage degradation. But will this fine print labelling be achieved on initial market launch of Zilosul or will it come later (or even much later)?
1
2
Key man risk
PR is founder and stepping up to role of CEO for the first time.The skill set requires strong EQ skills rather than just sales based skills.Can he get the best out of his team, will he ask them to be transparent and open to sharing alternative points of view?I won’t rehash my views on the latest corporate positioning, namely “repurpose experts” or the JP Morgan presentation “track record of meeting timelines” as you’ll get my gist here.
2
3
Regulatory risk
Will various regulatory bodies approve a pain management drug to their wider population and if so dictate prices lower than expected (currently +US$2,500) before approving for reimbursement?
3
4
Corporate action
What will PR do if an early offer is made given his age and physical condition?

How will any future deal be structured to align with future sales, which may or may not be account for DMOAD?
4
5
Commercial product approvals
What will the FDA/EM/TGA consider a unanimous pass before approving for commercial release (primary end point P<?).Will they seek further data points post P3 despite the latest clarifications and comprehensive trial design?
5
6
Stakeholders
What stakeholders could potentially work actively against PAR (e.g. opioid manufacturer and could the FDA panel be influenced)?
Expand
Well thought out, Denial.

Food for thought that the primary endpoint is only pain when PR is pushing PPS as the holy grail for DMOAD. I understand aiming for an easier target (pain) if that is more likely to achieve approval. However, if pain is the main labelling on the product it brings into question the revenue potential. Will doctors have enough confidence to prescribe it for treatment of the actual disease? Will governments and insurers pay $2,500 for something primarily labelled as a painkiller?

Perhaps PR was pushing the holy grail line so much at the same time he invited potential partners to talk with Paradigm as he thinks a large pharma might be better placed to bridge the gap. ie. perhaps a large pharma will be able to market PPS as a DMOAD even with the painkilling label better than Paradigm can do.

No.	Vol.	Price($)
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0.260	106349	3
0.265	30000	1
0.270	20000	2
0.275	13636	2

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13636

(20min delay)
Last 24.5¢		Change -0.010(3.92%)		Mkt cap ! $85.70M

Open	High	Low	Value	Volume
24.5¢	25.0¢	24.0¢	$59.66K	241.2K

Blind spots, page-2

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	1	Clinical trial risk	This is currently being assessed as low due to existing P2 results and track record of PPS as a repurposed drug many.Many factors go into successful trial outcomes. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6092479/
1	2	Financial risks	Whilst we’re in good shape with cash in bank we’re now short for the completion of all the proposed P3 streams. We’ll also lack visibility on realistic pricing and reimbursements until we get close to commercialisation.Best be very
2	3	Time overruns	Potential for P3 to run well past late 2023 (given external factors such as COVID) and therefore commercial launch delayed well into 2024/25
3	4	Personnel risk	Ability to engage and retain leading industry experts
4	5	Market risk	Bull markets eventual turn into prolonged bear markets the longer it runs in one continuous direction.Liquidity dries up during bear markets making future financing more problematic

	1	End product labelling	The primary end point for P3 is pain not DMOAD.If DMOAD is to be the “holy grail” for OA why isn’t this the primary end point for P3? What influence will other proposed streams have on labelling and therefore distribution of Zilosul as a DMOAD? Will such labelling be enough to capture the medical professions attention given it’s not the primary purpose for prescribing the drug?Admittedly it won’t hurt to highlight that it reduced signs of key biomarkers associated with cartilage degradation. But will this fine print labelling be achieved on initial market launch of Zilosul or will it come later (or even much later)?
1	2	Key man risk	PR is founder and stepping up to role of CEO for the first time.The skill set requires strong EQ skills rather than just sales based skills.Can he get the best out of his team, will he ask them to be transparent and open to sharing alternative points of view?I won’t rehash my views on the latest corporate positioning, namely “repurpose experts” or the JP Morgan presentation “track record of meeting timelines” as you’ll get my gist here.
2	3	Regulatory risk	Will various regulatory bodies approve a pain management drug to their wider population and if so dictate prices lower than expected (currently +US$2,500) before approving for reimbursement?
3	4	Corporate action	What will PR do if an early offer is made given his age and physical condition? How will any future deal be structured to align with future sales, which may or may not be account for DMOAD?
4	5	Commercial product approvals	What will the FDA/EM/TGA consider a unanimous pass before approving for commercial release (primary end point P<?).Will they seek further data points post P3 despite the latest clarifications and comprehensive trial design?
5	6	Stakeholders	What stakeholders could potentially work actively against PAR (e.g. opioid manufacturer and could the FDA panel be influenced)?

Blind spots, page-2

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Consumers cautious according to Harvey Norman, as profit slumps 35% in FY24

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