Deal discussion, page-13

I don't often disagree with J8 but on this occasion I am afraid I have to take a totally opposite stance.

First, if Peter was not stood down because he could not land a deal, then what exactly is his shortcoming that is so essential and can only be found in an American CEO? Doing a deal is arguable the only thing that Peter failed to achieve, so why dump him now, without a replacement? I cannot think of another plausible reason.

Second, the problem Benitec has with big pharma in not really the data - in 2006 Merck paid $1.1B for Sirna with no clinical data at all - it is working out how they can make money out of the data. One shot treatments do not fit the big pharma business model and until we can convince them that sustained revenue streams are possible, then they will remain reluctant to partner. This is what Peter completely failed to achieve. None of our partnerships will yield any significant revenue, or if they do, it will be many, many years down the track.

Third, because big pharmas are still to be convinced that ddRNAi treatments can be a commercial success, they have not shown any interest in Benitec. IMO, this lack of endorsement by big pharma is the reason why major investors have shied away from investing in the company. It is the reason why the IPO went so badly. If big pharmas were to partner, then investors would see this as an endorsement of the company and it would reduce the risk of any investment. This, in turn, would see a sustained rise in the BLT share price.

Forth, a deal would provide non-diluting capital. Even though Greg may be technically correct in saying that no additional capital will be raised in 2016, a quick look at the state of our cash and burn rate tells you that, by the end of 2016, the company will at the very least be planning to raise more capital. Trial results won't be published by then, even if the trail stays on track and concludes in December 2016. So who is going to invest at that time?

A deal has never been more important. I think the BoD realise this and that is why Peter has departed. Pure and simple. Getting rid of Peter now will give the new CEO twelve months to get something sorted; anything less would have been a bridge too far.