keep your eye on the prize

The conjecture over Phylogica during the trading halt is beneficial as we seek to understand where the company is going and how it can get there. Its important to keep in mind the business strategy outlined by Watt and now Woolf in investor presentations. The directors are clearly telling shareholders and investors that a trade sale is the exit plan.

The March 10 presentation states;

"focused on building capital value of drug library asset until trade sale."

We also have a clear understanding of the target set by the Board for a trade sale;

"Eight acquisitions of companies with biologics discovery libraries in less than 2 years. Average valuation at acquisition of A$450m. 62% of companies acquired at pre-clinical stage."

Phylogica has a world class biologics discovery library which explains the deal pipeline and the "access at the highest levels to many of the major pharmaceutical companies in the world."

We also know from other presentations that the time frame for a trade sale is less than 24 months.

Of course, the wheels could fall off the biologics cart but we could also complete our race to the finish line.

The share register is tightly held with the top 12 holding over 50%. When the trading halt is lifted, keep your eye on the prize.