GuysAfter KBear1 was organising the recent shareholder meeting I...

Guys

After KBear1 was organising the recent shareholder meeting I sent MR an e-mail with some questions that I thought were key issues to address following Dendreon's recent issues. I'm sure info was covered at the recent meeting but thought it worthwhile to post anyway.

I've cut and pasted the key parts, my questions and MR's reply.-
"Questions I believe shareholders are seeking at the briefing or in future market updates are;


1. Has PRR developed a strategy to manufacture CVAC at costs that will make CVAC available at a cost that will ensure demand?

2. Has PRR developed a strategy to overcome the Dendreon / US Medicare issues that caused the recent Dendreon S/P to fall 60%.

3. Does the Australian Medicare system provide more surely for Doctors and patients in terms of reimbursement?

4. Do you have to announce the SEC approval to list on the NASDAQ immediately it is given or are you able to wait for global markets to settle.

MR replied;
1. Manufacturing: This is a strategy we have had for the last 12 months as a feasibility study to optimise and automate our ex-vivo side. This can allow for a rapid scale up if we get large market approvals such as US or EU so we could treat thousands of patients and have reduced COGS(Cost of Goods Sold). I must caution that we don't have approval from US FDA or EU EMA and this is our focus of the upcoming study that starts recruiting 800 ovarian cancer patients in October. Also we have a long term strategy over 5 years to allow for ease of scale up with an automated manufactured process that becomes effectively fully closed loop and either eliminates the use of clean room facilities or drastically reduces technicians time in them. This is generally part of medical innovation as treatments become better, less toxicities/side effects and more cost effective. Keep in mind that there is what is called pharmaeconomic benefits for patients that have not so much hospitalisation time or reduced other medications etc that comes into play. Medical innovation is a wonderful thing, the first chemotherapy was developed after world war II from an accident of US ships secretly shipping chemical weapons and when their ship was bombarded off the Italian coast it reacted with the water and killed the local village inhabitants. Some US scientists then applied this application to sick children with leukemia in New York. The dosages were too strong at first but over the last 50 years chemotherapy has become common place for treatment of cancer patients and has evolved a lot in this time. The latest shareholder newsletter attached has some information about this.

2. Dendreon. Firstly Dendreon has Medical approval for Provenge under the CMS decision earlier this year and patients receive reimbursement(Medicare in the US is for government coverage of those over 65yo). Dendreon's issue has nothing to do with the science of their cancer vaccine, safety profile or effectiveness. The issue was of management forecast sales guidance and having managed investors expectations of something that is in their control. There is plenty of US analysis of this and I refer you to this. As an aside launch of cancer drugs and sales guidance in the first two years can be unpredictable until it becomes common practice and oncologists get used to their billing flow etc.

3. We cannot comment on any future government decision as to not prejudice any decision. For some background, Australia has a government paid for system called the PBS which is recommended by the PBAC. Currently the PBS provides coverage for Australian cancer patients for other similar priced biologics for cancer Avastin and Herceptin for instance. Cancer biologics and chemotherapies typically cost anywhere from $80-120k per year. An oncologist will work out how much and what mix of cancer drugs a patient will use. It can take time for a drug to get on the PBS and cancer patients do use drugs from either their private health insurance or out of pocket before it gets on PBS. Approximately one third of cancer patients in private cancer care will use drugs not yet covered by the PBS. The Australian market is small keep in mind and makes up approximately 2% of the global market.

4. We will announce SEC clearance when it becomes available to the market."


I feel reasonably reassured by his replies.


ramses