Having read the post, I certainly wanted to pass comment, but then came the horrendous storm we had in Brisbane yesterday. I notice that the post referred to has since been moderated so I will limit what I say accordingly.
I was very surprised by the poster’s opinion that POH can’t be classified as a biotech because it has” no real proven products making big money” Of the numerous definitions I’ve found for “biotech”, none even resembles that. If that were the accepted definition of a biotech, then the number of biotechs in Australia would be very, very small. And you certainly wouldn’t be able to buy shares in them for sub-10c.
With respect to whether POH shares were/are undervalued at sub-10c, I would not be surprised if that were the view of the CEO as that was his stated opinion at this year’s AGM. It’s probably the view of all biotech CEOs in Australia about the shareprice of their companies. Some might disagree with the “undervalued” view expressed by Harry Rosen but others, including professional analysts, are in agreement with him.
With respect to POH’s pain patches, I’d observe that their choice for development is consistent with POH’s stated long-term strategy of working with already approved compounds rather than experimental drugs.
With respect to the rationale behind the company’s current strategy of developing two pain patches (oxycodone for localised pain and oxymorphone for systemic pain relief) – both the strategy and business case were clearly laid out in the September 2013 newsletter. I’d further note that the strategy and business case outlined in the newsletter is totally consistent with the explanation provided to me in my own discussions with the company.
I would find it no surprise if the company were to identify these two pain patches as potential company makers. There are other shareholders and analysts who share this view.
With respect to revenues from sales of products with TPM, it’s no surprise to find that ENA and Themis had negligible sales mid-last year. ENA’s products had been on the market for less than a year and Themis didn’t even launch its product until early this year for reasons over which POH had no control. As for the size of sales of TPM – I think they were supposed to exceed $1 million this year. Modest perhaps, but revenue nevertheless.
With respect to forensic and legal fees post-Esragate, did anyone anticipate that they wouldn’t be expensive? My ex-neighbours spent over a million in legal fees just on their divorce!
With respect to the part-time CFO, there appears to have been general consensus on this forum, post-Esragate, that the hours allocated to this position were insufficient. That said, I note that that use of part-time CFOs is common, indeed even advised as financially appropriate, for smaller biotechs. As to CFO remuneration, POH’s seems to have been paid $100-$120 per hour. I would simply observe that that this figure seems to be at the lower end of the standard CFO hourly rate for Melbourne in 2013 ($100-$175). (1)
With respect to the CEO’s remuneration, I did a quick check of the CEO remuneration for a half dozen similar-sized Australian biotechs. Amounts ranged from $450,000 to $1 million. I also note that the recorded average Australian biotech CEO remuneration in 2011 was approximately $450,000. (2)
With respect to Phosphagenics having a base in the United States, I’d observe that that’s where the FDA is, that’s where clinical trials will be held, that’s where GMP-compliant manufacturing patch facilities are, that’s where the prospective licensing companies are based and that’s where the biggest market for these products is. I personally would be concerned if POH didn’t have a base in the United States. I also note that IAH has quickly taken the same direction.
Cause for alarm? Join the dots? …I don’t think so.
