Efficacy, efficacy, efficacy. What does this really mean?
We all hope that TT-034 will cure HCV but when will TT-034 be de-risked to the extent that someone will want to invest in it (besides Benitec)? When is the risk/reward ratio going to make it worthwhile to partner up with Benitec? Money or the promise of profit is what a partner/investor wants. Efficacy is only a means to that end. We may get some indication that TT-034 reduces the viral load after cohort three but is that proof of efficacy? It may give an indication but it won't be the final answer. Even if, at the end of Plla we believe that efficacy has been established, as many
as 75% of new forms of treatment fail in Plll i.e., after they appear to be efficacious at Pll. This being the case, why would a partner not wait until Plll is completed before doing a deal? If we have to wait until the end of Plll, when will the trial be completed and how much will that cost and how much dilution will it take to raise the funds to get us there?
If TT-034 does not prove efficacious in its current form, what then? There is no Plan B. The next clinical trial is for NSCLC and that won't even start for over one year. Simply sitting back and hoping that the current trial will be sufficient to win a deal is an immature, unimaginative and dumb way to manage the company.
Clinical trials are always risky and the "sit and wait strategy" leaves all the risk with Benitec's shareholders. It could be argued that it also leaves all the reward with shareholders but is not necessarily the case. The share price may rise after cohort 3 results are known but not to the extent to discourage a takeover. If Benitec is bought out cheaply, where is the benefit to existing shareholders? Where is the protection for long term shareholders?
Yes, efficacy is important but de-risking the investment can be done in more ways than one and we should have more than one strategy in our business plan if we are managing the opportunity in the best interest of shareholders.