lani, page-11

bta can make claim to becoming a drug discovery and development company. but that's not really an aspiration for a company. The reality for most is that a single success is difficult to realise. so, when a drug discovery biotechnology company finds a successful compound that becomes a product, it by business necessity becomes a single drug company for a time. all the great biotechs started this way, genentech and amgen and gilead. even gsk was turned into a giant company by a single drug, cimetidine. you could even argue that csl and cochlear are examples of this (immunoglobulin and implants respectively). their skill is monopolising markets with single technological advances that are desirable, by manufacturing and marketing those advances or at least holding them very close in partnerships.

i'm not aware of any biotech who wants to remain an early stage compound sifter, because the odds are stacked against you. even bta has one strike (relenza and lani are effectively the same compound, lani a prodrug of relenza) and several/many misses so far. further, we all know the dangers of partnering. one partner company becomes another, then they have a competing compound and there is no penalty for not using their "best endeavours" to sell your compound.

i think bta should become the premier anti-influenza drug company and maximise its position in lani by conducting trials. those trials allow it to strengthen its partnering position above the current rent boy status. the money from a seasonal (everyone still ignores the bread and butter aspect of these compounds)and pandemic drug will make it a large company, and then it can leverage against other compounds, picking over the likes of current biota-like companies who are begging for capital.

to buy into other compounds with some partnering cash is tempting, but there is alwys the risk you are buying other people's expensive junk. if you know your own product so well, why not back it?

so, the question about management becomes relevant on many levels. for example, some might be happy that management have managed to ride the HINI accident of history that has caused a tsunami in the shareprice. but would you back them enough to say participate in a capital raising in this company at today's price to further develop LANI themselves?

Morel (and I) probably want to be part of something big. But its actually quite unaustralian to think this way.