food for thought, page-6

nonstop, I agree with your comment regarding BTAs lack of capacity to take LANI to market. That the company feels that simply managing contractors and cashing cheques is all that is required is part of the problem.

They can find the cloud among a sky of silver linings.
They are a successful research outfit, a well funded debt free biotech. But it has not signed a pharma deal in over 5 years for any of their compounds. Biotechs burn money but they also sign deals and/or go to court to protect their IP. That is what they do.

They could have signed the following deals both clinical and pre-clinical: LANI ROW rights with BARDA attached; Vapendavir with Phase2 complete; RSV oral compound; Hep C both nuc and non-nuc; and gyrase. They could have completed the legal deal with GSK for 100 million.

With those signed deals and LANI almost certain to hit its milestones faster with a major, we could be listed in New Zealand and still have a great capitalisation. It could be a great research outfit, trawling Australian universities for talent and product.

Is this merger strategy or just more hubris?

You are right -even LANI, which is fully funded, may suffer if they can't complete the trials in enough time to allow a useful patent life. And if they manage only one stockpile order per country before the patent expires, is that really worth this pain? And who says countries will buy LANI when it will have at least two competitors by then for the same market? They could have signed a deal on LANI during the H1N1 epidemic or in the week after the BARDA grant. To your point, no one goes bankrupt taking a profit.

Maybe they want to be a Sirtex or a CSL or a Cochlear and control their products to market: but those are (or in the case of CSL were) all non-pharmas, single product firms. Interestingly all still based here for now (no Nasdaq required). The element of execution risk is as you state.

Even the approach to this merger deal demonstrates weakness in strategy and execution. They have been made to throw (BTA shareholders') money at NABI holders to get them to accept this deal. This is a repeat of the GSK case: hubris followed by capitulation. Even if a US move is the right thing to do, they way they have managed it speaks to capacity.

From the outside, the executive and Board have made poor judgements. They have shifted strategy too many times, and not ever has the strategy involved shareholder returns. The professional investors here avoid them because of who they are and what they do, not because they are an Aussie biotech. Anyone can justify every poor decision with an argument that in the very long term it will be fantastic. Or that we aren't understood.

If a big pharma wanted them, they would have acted last week. Efficacy won't kill the company, it will be something more basic.