nasdaq value chart

[This rehashed and tidied-up collection of some of my previous posts is for the many who are new to this stock, and for LTermers who are getting itchy feet, despite the barrage of excellent news over recent weeks, and months - and what we can expect in the very near future]


This post covers three issues: The NASDAQ Listing, what the listing could do to the SP locally, and what the current chart appears to indicate.


NASDAQ LISTING

Some may recall an earlier post of mine recounting a telephone conversation I had with MR back in late May.

On the issue of the NASDAQ listing, MR asked me if I had noticed the listing of LinkedIn -- I said 'yes' -- MR said LinkedIn announced their intention to list in the US one month after PRR announced its intention to list on the NASDAQ -- at the time of LinkedIn's announcement, they hoped to be listed by Christmas time 2010. Despite LinkedIn's best efforts their listing didn't occur on the NYSE by Christmas due to the many regulatory hurdles placed before them by the SEC, resulting in their listing not taking place until May 19, 2011 -- so I asked MR if we are on a similar timeline to LinkedIn in terms of delays due to having to comply with countless SEC requests -- MR indicated a 'yes' with his umming and arghing -- when I pushed MR further, he came out with his "rather soon" indication for when I could expect to see PRR list - now that "rather soon" was given to me at the end of May, and we are only one month from that conversation, which in the grand scheme of corporate activities, still falls within the "rather soon" time period indicated.

In the meantime the company has been required to raise funds before listing, due to an SEC determination informing the company, that conducting a CR post NASDAQ listing would require the company to provide US investors with a prospectus style offering, which would have been very expensive, and involved a great deal more time to implement.

So PRR management chose the much easier, quicker and cheaper route of conducting a CR within Australia and New Zealand only, as the $15K shareholder limit meant there was no need to use the prospectus mechanism of fund raising, with all the delays and expenses they involve.

Now that CR announced late May settles tomorrow - indeed many shareholders are today posting about how their new shares have already appeared in their accounts. Nonetheless, all shares will finally be alotted by 1 July (tomorrow), and there will be no further administration or compliance required. In other words, the Credit Raising will have been completed tomorrow, save for sending out new statements of revised holdings to shareholders.

So as of tomorrow, the company now having substantially completed the CR and raised a great deal of money for future expenses and the completion of clinical trials, can approach the SEC over the next few days and effectively say: "Well Mr SEC, PRR has finished its domestic credit raising, and all new shares have been allotted to shareholders and institutional participants alike, and we've otherwise answered and fulfilled every query and request coming from you Mr SEC, so can we list now?"

The SEC will then seek somehow to confirm that everything relating to the CR has been completed and all necessary compliance was adhered to. Once they are satisfied the SEC is then expected to give PRR the green light for listing.

Now with Greece resolved for the time being, and positive sentiment coming back into US markets, I would guess that PRR management are working very hard at the moment trying to get something like the above scenario accomplished very soon - and you could probably guess that PRR has an agent in the US as we speak who has already prepared and signed all the last and necessary paperwork needed by the SEC to satisfy it that our CR is complete, and that nothing further is required from our company that would prevent the SEC giving us the go ahead.

In the meanwhile, we should hope to expect some interim Phase IIb data being released at any moment now, as previous announcements have indicated we should expect, which would be a perfect public relations and marketing spring-board to re-ignite and excite US investors interest in PRR, after the very methodical road show we conducted in the US earlier in the year, where such a spring-board announcement would segway beautifully for an announcement confirming NASDAQ listing approval and a date for same.


VALUING NASDAQ

This is an example of How US investors could possibly pay US$30 for 1 PRR ADR.

We all know that PRR is regularly compared with Dendreon (DNDN:NASDAQ), due to the similarity of the science used by both companies.

On the NYSE: 1 Dendreon share = 1 Dendreon share

On the NASDAQ (once listed): 1 PRR ADR = 30 PRR common Australian shares

Now tomorrow once all new CR share have been properly allotted into shareholder�s accounts -- (and ignoring PRR Options ((which will give us nearly AU$2M towards the end of the year)) I just want to make this easy) -- PRR will have approximately 965,219,000 shares in the market - these shares which will be shared between here and the US once we go live on the NASDAQ.

Dendreon has 145,823,501 shares on market (forgetting any Options).

So from tomorrow PRR will have 6.62 times more shares than Dendreon.

Dendreon are currently priced at ~ US$40.50

If Dendreon had the same number of shares issued as PRR, then with a market cap of US$5.91B, divide by 965,219,000, we arrive at a comparative US share price of US$6.12.

So, if Dendreon had the same number of shares issued as PRR, then 1 Dendreon share would cost approximately US$6.12 (instead of the current US$40.50).

Now a NASDAQ PRR ADR holds 30 PRR Oz shares.

If PRR was at the same stage of development as Dendreon, then in order to equal the market cap of Dendreon, we get the following:

1 NASDAQ PRR ADR = 30 PRR Oz shares

At same theoretical MC

30 x US$6.12 = US$183.60.

BUT

As PRR is not at the same stage of development as Dendreon, we can't skew the figures like this - so we must try and assess where we believe PRR is at on its development pathway towards achieving the same market cap as Dendreon.

Currently it looks like PRR will list for approximately:

1 NASDAQ PRR ADR = 30 x PRR Oz share price (in USD) = 30 x USD$0.315 (AU$0.295) = USD$9.45

The exercise for all US investors is to ask: how does the development pathway of PRR compare to where Dendreon is at now?

Asking that question helps US investors determine whether 1 PRR ADR is worth US$9.45 or something towards my theoretical US$183.60.

Many US investors missed the boat Dendreon before it blasted through the roof, so I am guessing those same many investors (now in a lagging market), won't want to miss another biotech sensation, especially when all the experts compare it closely with Dendreon namely, PRR.

So I am guessing US$9.45 will be a cinch for US investors.

I am also thinking on a scale of US$9.45 to US$183.60, that US$30.00 is nothing, representing a share price of only 16% of the current market cap enjoyed by Dendreon.

Factor in the excellent clinical results to date coming from PRR, and the real possibility of excellent Phase IIb interim data being released about the time of the NASDAQ listing, then US investors who are better schooled in biotechs, and who are much more risk tolerant that Australian investors in this field, then I believe that US investors will very quickly add value to the current SP, perceiving PRR to be much more de-risked than many Australian and New Zealand investors are prepared to admit, or perhaps even know.

Of course the above broadly factors-in and pre-supposes all the good news we have received on CVac to date. It does not give any weight to the other areas the company hopes to advance the use of its science, where many would have read brief mentions of breast cancer, lung cancer, and oral HPV vaccines. These considerations should I hope also gain better weighting from US investors.


CURRENT CHART INDICATIONS

[Reposting this chart for completeness]

Even the most TA challenged amongst us should be able to recognise a descending wedge when they see one - and wedges typically see price action break UP or DOWN once they get to the thin edge of the wedge.

Sure it's descending, but only to the support we all know exists and is confirmed around 28 cents.

Try the same chart yourself and throw in the 5, 21 and 63 day Moving Averages, and MAs appear to be setting up for a healthy cross anyday now -- I would love to call it a Golden Cross, but I dare say the TA purists will jump all over me with finer definitions of what a real Golden Cross involves (like 50, 200 MAs etc) -- then in the bottom pane we have the MACD finally turning UP after a long and determined down trend for the past few weeks � now it is breaking for the sunshine - while to top it all off, we have the BBs heading towards more delicious narrowing, and right on time IMO

Could we be seeing the technicals setting up for a WOOSHKA?





All the above is MY OPINION ONLY.

Good luck