july20 report- worth a read

This may have been posted before but has just come to my attention but is well worth a read.

No pain, no gain

July 20, 2004
LADIES and gentlemen, monumental strides have been made in medical science thanks to an obscure Australian company called PharmaNet Group.

PharmaNet has developed a cure for the big one, the big daddy of all afflictions ... wait for it ... pain.

Shares in this promising company shot up six times over the past week, from 2c to 12c, after PharmaNet announced 'a previously undiscovered pain-killing compound was identified and named Tripeptofen'.

'The (PharmaNet) scientific team believes the compound has significant international medical and commercial importance.

'Tripeptofen is a new, fast-acting and effective anti-pain compound with low drug interactivity ideally suited to the needs of the sporting and aging markets.'

More excited than Big Kev on IPO day, we went in search of this PharmaNet scientific team. Who were these brilliant minds, these intrepid savants whose microscopic labours had put our nation at the very vanguard of knowledge and global achievement?

Alas, our calls to the throbbing headquarters of PharmaNet went unheeded. Though thankfully we managed to turn up a PharmaNet prospectus which provided a few clues to this Third Millennium breakthrough.

It wasn't a very detailed prospectus, quite modest really. However, it appeared that PharmaNet, after two previous corporate reincarnations, had burst on to the research scene last October via the backdoor-listing of a Paramedical Supplies Australia Pty Ltd.

Paramedical had cost PharmaNet just $350,000 - a bargain to be sure - and its activities comprised the sale of paramedical supplies such as bandages and diagnostic equipment to mining companies, doctors' surgeries and country stores. What a humble beginning for an emerging global giant!

Presumably, this supply of bandages to country stores was what PharmaNet was talking about when it told the ASX last week that its 'medical products had previously been confined to the anti-arthritic and anti-inflammatory fields, however, the discovery of Tripeptofen as a new peptide-based analgesic compound will open commercial opportunities for the company in the international pharmaceutic ingredients sector'.

Indeed. But questions remain. Why, if Pharmanet had discovered a cure for pain, was its stock price worth just $12.44 million (the stock price eased 2.2c to 9.3c yesterday) and not $12.44 billion?

Surely it was time that international investors shorted Glaxo, sold Eli Lily and switched out of Zeneca into PharmaNet.

After all, finding a cure for pain was no mean feat. And PharmaNet had accomplished this with apparent ease.

Chairman John Palermo and director Philip Garrat had only just backdoor-listed the medical supplies business last October. They raised some capital, a few times, then announced in May that 'International Scientific will work with PharmaNet ... to establish PharmaNet's Nutracel technology in the global metalloprotein industry'.

We can't find a single mention of the Nutracel technology before this. Then suddenly two months later comes the big breakthrough - the cure for pain.

A formidable achievement from International Scientific, a company based in Perth's Subiaco, just down the road from PharmaNet's nerve centre in Oxford Street, Leederville.

International Scientific's principals, Beverley Jean Edwards and Jeffrey David Edwards, take a bow.

Praise should also go to Cambridge Scientific as well - which searches indicate is not associated with Cambridge University in England. For Cambridge, although not mentioned before last week, has 'lodged a patent application and holds the intellectual property'.

Yesterday's announcement from PharmaNet, just minutes after a speeding ticket from the ASX inquiring into PharmaNet's share price, shed more light on the Tripeptofen breakthrough.

'The discovery of a new, fast-acting analgesic or pain-killer that works through the skin, yet can deliver significant pain relief in seconds with localised effect, low drug complications and low side effects should make it ideally suited to the needs of both the sporting and aging markets.'

It seems too good to be true, doesn't it? The latest earnings report from PharmaNet shows that not one red cent was expended on research and development. Not a cent. Although 'other working capital' did account for $1 million of the group expenditure which entailed $420,416 of shareholder funds being utilised for the quarter. Can you imagine if these scions of the New Millennium really put their minds together, and spent some money on R&D?

Palermo and Garrett might just stroll down St George's Terrace one day on their way to lunch and devise a cure for AIDS, or Tourette's Syndrome perhaps.

Come to think of it, we could do with some of this Tripeptofen right now for application to the Margin Call rib cartilage area. Such is the joy and laughter that PharmaNet has brought.