I've said many times that the reason include a relatively unsophisticated market in Australia for biotechs, index hugging plus the current mania in the market for yield.
With these sentiments in place, the market isn't buying a biotech story, however compelling if there is not product to market, so it means clued up investors have an advantage if they can join the dots as you have just done.
The reason I keep saying that the key to this biotech is the science, is that the science so far is sound. And there is a reasonable expectation for to continue, because of the robust nature of the MSB patented stem cells.
There isn't the same risk involved as exists for pharmaceutical drugs because you aren't looking at side effects which can leap out in the course of clinical trials and throw a huge curve ball. The main risks have been patient rejection with stem cells and that has been eliminated. So then you have efficacy, but so far that is not a big risk. Even in the earlier clinical trials, which were focused on patient safety. MSB has been able to ascertain optimal levels of efficacy by altering the dosage.
Then you have fast tracking in Japan of regulatory approvals, and indications in the US that the FDA will revise their clinical trials to take account of the different environment with stem cells, and you have a maturing platform technology which is breaking new ground.
Macquarie bank has tended to leap on anything which at first glance, looks odd. The variable results from the difference in dosage were wrongly taken by Macbank as a sign of clinical failure in efficacy. This theme of uncertainty and risk has been trumpeted again and again by Macbank, and by some in this forum. When given the facts, you get resistance and stonewalling. To the uninformed, it all seems a bit too scary.
Yet Macbank has been shorting the stock.
What an amazing coincidence. The market is far from transparent and far from easy for the average punter to understand and you get a lot of reactivity to a suppressed shareprice.
That is why I keep saying that MSB is substantially derisked, this is a blue chip stock in the making and the key to the stock is with the science.
The deal just inked is a result of this. IMO.
MSB Price at posting:
$3.54 Sentiment: Buy Disclosure: Held
(20min delay)