"Great investors think of themselves as owning a slice of a...

"Great investors think of themselves as owning a slice of a company. They have the mentality of a business owner, rather than someone who has just clicked ‘buy’ on their trading platform".⁰



ounders play a special role in the start ups they are involved with. They have an increased sense of purpose, they have an increased and more articulate focus in terms of goals.

Tonight we cover Founders and what the research points to regarding them.

As always, do enjoy.





INTRO

As we know, there has been a fairly significant switch going on. Paul has moved from a joint role of CEO and Chairman to now being solely focused as Chairman as they look to fill the CEO role. But first, what is the role of a chairperson anyway?

Well I had a whole couple of paragraphs on this but @Chel6888 got in before me and gave us a wonderful insight on these roles....Here is the recent post:

CHAIRMAN -v- CEO

Briefly, the role entails leading the Board and focusing the company on strategic matters while overseeing the business and setting high governance standards. Its their responsibility to ensure the board is diverse and has experienced in tackling the various growth phases of the business and is on the right track. The role of the chair is also to act as a sounding board to the CEO and importantly represents the Group externally.

For us, Its all going to be about this representation externally in the next phase. Yes the business will continue guiding the trials along but largely this is set in motion now. I loved the interaction between us and the FDA as much as the next investor (Yeah that was a touch sarcastic)...but you know what, maybe they (the FDA) are being extra protective as they know just how many people could one day take our drug...and the good news is that from here, there will be a fair bit less direct interaction with them until hopefully NDA stage...at least where the OA program is concerned.

So its the external relationships and just what sort of partnerships and deal(s) we can strike that will play a very pivotal role for the company into the future. A person focused on this as a separate role is now paramount. But the good news is, this person isn't just someone paid to do it, its the founder, Paul Rennie.

Now I'm not here to convince you that Paul is all wonderful...but I have to point out some points from the positive.

1) He was the founder, it was his concept and he started it. We all know PPS has been out there not for years....but for decades...there has been evidence of how it worked as a repurposed drug particularly in the Vet industry, but no one brought it to commercialisation, we have a shot. A real chance.

2) He has contacts...he has brought over some amazing ones over to assist, he even managed to bring across there infamous Dr D Felson...that hasn't happened before as I have mentioned.

3) He knows PPS. Whoa does he know it...He tried it on himself ...but that's actually not my point... all you need to do is hear how he added to Dr Krishnan's summary... 01:13:27 in the video:



He stated all of that from memory. Now I reckon I have researched PPS and its many actions...let me state for the record I couldn't articulate it to that detail off the top of my head like Paul did. I want that in Chairman. He can very adequately convince any large Insto as to what we have and how it will be of benefit during discussions on the fly. He doesn't need to constantly refer to the CMO or CSO but it is good to know he can rely on both of them to also hold conversations as required.


4) Long term view and Skin in the game. These are two import ticks here.





FOUNDER LED COMPANIES

Joining names such as Zuckerberg, Bezos, Jobs and Gates, there is quite a bit of material out there that compares companies that are founder led versus ones that have just employed someone to lead.

"S&P 500 companies where the founder is still CEO are more innovative, generate 31% more patents, create patents that are more valuable, and are more likely to make bold investments to renew and adapt the business model — demonstrating a willingness to take risk to invent the future".¹

It makes sense that they would do better. Why?

Well because it is their baby, they are the ones who usually came up with the idea, grew the company to what it is today, understand the benefits and can sell it.Its the same with Paul. He tried the product on himself and he himself averted knee surgery....for almost 10 years now. He knows what he is dealing with and he knows where this will go one day.


According to Bain & Company, after much research one of the key points of a founder led company was the engagement level of employees. If they felt part of the story, and this is particularly true at the start as the business develops and starts growing, then this can result in "employees are 3.5 times as likely to solve problems themselves and invest personal time in innovation as unengaged workers".


Another trait that stems from founder led companies is the attention to the front line. Ie the workers of the company that come in contact directly with consumers of the product. In our case it might be the Reg. team or Doctors working for us, Principle investigators and CRO's at this stage of where we are at.


A RAGS TO RICHES STORY

How about a story? Mohan Singh Oberoi founded and built India's second largest hotel empire starting with almost nothing. Though it happened a number of years ago now, I have had the good fortune of staying at a couple of the Oberoi hotels in the past, a great experience.

This founder acquired his first property by mortgaging all his wife's jewellery and all of his assets, a big risk was taken back in the day.

He got his first break when a hotel in Shimla (close to the wonderful Himalayas mountain range) was up for sale due to a cholera outbreak at the time, prices were low, he swooped. Hmm prices low eh'? What else is quite low at the moment and yet the future is brighter than the 500 bed hotel's prospects were in the North of India back in the day (1934) ??? Hint hint?

Mohan Oberoi didn't stop at his first hotel, he worked hard slowly acquiring more over the years.

No this isn't just a random story of a Founder led success story, it has an Aussie connection too. Mr Oberoi lobbied the State Govt of Victoria to be allowed to restore the famous Windsor hotel in Melbourne. Not only personally supervising the renovation he ended up buying it. Another famous story was that even at the ripe old age of 90, he was personally responding to customer feedback cards though he could hardly see due to old age.

Skip forward to today, the Oberoi Group boasts 31 top end Luxury hotels and luxury cruisers employing some 12,000 people.

It is this effort, mentality and love of the business that you yourself started that gives the founder the true focus, the true drive, the true edge.





_{The Oberoi Hotels, a good example of a founder led company going from strength to strength.}




The founder typically get involved and liaises directly with the guys at the front whether it be a sales force or lab technicians. Its the "owner's mindset" fuelling the company along and allowing it to take on speed and responsibility for risk and costs. Costs play a big role particularly as companies progress from their infancy. This forms a third pillar in answering why more founder led companies manage to make it big time.


DATA

Enough words, lets get our teeth into some data and graphics....how about this one:




_{Source: Bain & Company. 3X on average? Hmm compelling.}


Why not improve your odds with a founder led company...hmmm anyone know of any?

What about one that is just starting out, has a great runway and get this, aren't just working with one indication but have a pipeline of them? Yeah but its probably over priced right?

Ok I'll stop marketing. You know I haven't got anything to gain by me peddling, I just sit here a bit dumbstruck that we aren't already in the mid to high $3's....I know to be patient, but it doesn't mean I'm not bewildered.

Here is another pic from a different source.⁴







ALL A BED OF ROSES?

Not quite, while founder led investments have a tendency to out perform, it carries more risk. Like everything in life, its about balance. Another thing to watch for is when there is a change in management, specially if founders off load a whole heap of shares, a few thousand along the way isn't going to flutter any feathers but can be a red flag if a large percentage are sold.

Lovely fragrant roses have thorns too. Be aware of risks, be aware of what could go wrong, Look out for the negatives, I still encourage anyone that invests in PAR to have this awareness. If you guys have concerns, always raise them. Just because I or anyone else is positive on this story doesn't mean that it has 100% chance of success. Don't over invest in anything no matter how brilliant it seems. Having said that I'm not adverse to having higher weighting based on solid research and evidence, but don't make an investment all in just one stock or asset class.

Paul himself is aware of the risks and he and the company have been cautious in their approach to date, whether it be seeking out a Pre IND to calling for a Type C meeting. They were on the front foot in terms of numerous studies and didn't fight the FDA when bridging data wasn't accepted or increase in protocols were mooted. Lets take a look at a few of our own examples of this founder led mentality:


ALIGNMENT

When I say I want good management that is founder led what do I mean? I mean alignment with shareholders. This means sacrificing a bit of short term gain for a longer term brighter prospect.

It means creating a large enough foundation so that the chances of success in the future are very much increased.

Examples please Mr Mozz, there are a few, lets take a selection:


1) Pricing.

Now look, PAR could've very easily rested on their laurels and thought, 'we have a knock out blockbuster type drug here for the OA, lets just see where this goes in the short term'...

NO CHANCE

They spent upwards of an entire YEAR assessing and putting together KOL's to gather pricing data in the background. What is our drug worth potentially as is? What is our drug worth with a FIRST TIME EVER SEEN DMOAD kicker? AND lets not just pretty this up cosmetically by giving the survey along with the drug and company name, we will do it anonymously to REALLY ascertain the truth, to weed out any inherent bias.

$2500 to $6000 plus was a big step up. It is this that excites me for the future. Now I'm not saying and calculating that we are going to get $6000 x 10% of the entire OA market. Nah I water down my calcs even further, I just take the 4 - 7 pain stratum as a slice, and I halve that again to be extra super conservative, of that, I then just take 18% royalty. Should we get more, oh you bet...but make the foundation strong...take the lower figures, if it still computes to be ok then we are adequately covered, isn't that what PAR does? Super conservative but the figures are still explosive. I then do the same for Europe....mate... I like what I see.


2) Western Study

PAR got this out of the way early. Sure they could've left it till later and got on with the more exciting P3 application?


NO CHANCE

They wanted to have this done asap. so there would be less chance of a delay in the future once we got P3 read out. It would be so much more painful and frustrating to have a good read out ONLY to be further delayed to have to do another study. Front foot. Get on it.




3) BENE tie up.

When you have a true friend you are going to do copious amounts of business in the future you look after that friend. If this means taking a phone call late at night, if this means looking after one of their staff members...if this means rounding down joint expenses and going out of your way to look after the mate, it is worth it for the benefit of the relationship.



PAR knows the good relationship that Bene have had with J & J for so many years.

Have just an overnight strictly business diplomatic fleeting on paper relationship with our main supplier?

NO CHANCE

Its a symbiotic relationship and it will progress from here on. They are very much on a bright journey with us into the future....my views.



4) Go further.

Yes there is evidence that Par have gone further and are trying to future proof their business.

Just rely on one stream of future income though it (OA) is a big one?


NO CHANCE

Par are planting seeds in terms of pipelines.




_{Plant for the future...yes of course concentrate on your main revenue generators for now...but have the future in mind.}



Yes they are being careful that they don't lose focus on the bigger immediate programs of OA and MPS, but look at all the programs they are starting. These things take time and can be carefully managed in the background. When the team gets bigger, they can easily ramp these up.

I'm talking Pre Clinical ARDS and Heart Failure, I'm talking research tie ups and potential Defence Force programs. It is these sorts of pipeline profiles that a Big Suitor also looks for. If I build a house I want something more, some sort of feature that will make my house easier to sell. It could be slightly better tiles, it could be those awesome in built niches in the bathroom so you don't have to use those ever rusting soap and shampoo holders....it might just be a little more kitchen bench space. Some sorta feature that makes my place stand out and you know what, you don't have to spend big $$$'s on these types of features and yet it lifts the place. Same with our bolt on programs at Paradigm Bio.

Another clue is just how much data PAR are collecting, Take another look at the PAR MPS poster, how many categories do you see, this is effort. They are also doing this with the most valuable 008 program, getting a suitable cross section of cytokines and their subsequent readings excites me...founder led thoughts and directions? I reckon.


5) Five days time?

Guys...potentially within just five days from now we may get Heart Failure Pre Clinical Data. I don't need to sit here and type out just how big Heart Failure is.


Ok maybe I do...


$11.8 Billion USD.⁷


Sure its far off...sure we wont get all of that revenue but mate, we could still one day address a meaningful chunk of it. This is what adds to the story and yes, sure the share price will fall another 10 cents on the super news ...but it adds to the longer term pipeline....it upgrades us from a Copper to Fibre Optic pipeline....for use one day in the future.


FOUNDATIONS

When building any great structure a lot of the work goes hidden...its in planning...its in the preparing. Its in chatting and negotiating (Err...hello FDA for over 7 months?)... a lot is hidden. Yes we as shareholders get frustrated when it seems like nothing is happening...its like when I've been snorkelling in the past.


HUH? What is this Mozz on about now?








The view above the water line...boring nothing happening, why have I paid for this...I have paid too much for this...the share price is falling....when will it improve, why did I buy this, how long do I need to wait...what is the bad news that's coming that I don't know but the market knows? Has @twincreeks posted them graphs upside down and we're heading even lower? (Sorry TC, just kidding).










This (See pic above) is what is happening underneath that boring water line...there is so much activity...it spills out on the staff...they are busy...they have lots on...they have entire Gantt charts full of activity. The colours are exciting and they are vibrant!
The programs are exciting.

There is plenty of data.

There are discussions starting to happen....

The science is being ratified...

There is a commercial excitement just starting to build.

Interested parties are doing their Due Diligence as we speak.

Paradigmers, In only my opinion, this is the exact time not to sell.. the tide is at the lowest...the blood in the streets the thickest...the clouds are greyest....and the dark before the dawn well the darkest...(!)..but I agree, you need patience - you need a long time horizon...easy for me to type encouraging words on the screen, they are just words if you haven't done the research, if you haven't experienced other stories...if you cant imagine the future and forecast just how this might play out one fine day...


I will have more to say on this long term stuff when my really big post is done by sometime early next year....I'll have some quiet time over Christmas/New Years...


Where were we...oh yes...foundations:




_{Make your foundations strong, better to do this BEFORE the journey starts.}



Yes it adds time and frustration building our foundation but look at it his way, you'd just rather go through the pain of this now compared to later when we have a successful read out but we STILL aren't allowed to proceed as we have a pending study to do, now THAT would be be frustrating.


Yes I detest our SP being way way undervalued. Yes I think about it often...BUT I don't let it get me down...because of all of the above points...because I know this gap will be covered one day and there wont be quite as much lag. Not at all advice but I know the single worst thing I personally could do is sell...everyone has just about left the stadium...its only the more convinced, the longer termers that are getting ready for the next show that might still be some way off.


This is the company and its behaviours I want. I want this further attention to detail, I want skin in the game, I want experienced management that think about not just next month or the next 6 months, they think well into the distant future. I want a founder led investment whose goals, aspirations and focus is aligned and wont just take the first and cheapest deal that comes along. They are building for the future...they are adding the extra lane on the freeway and know just what is coming in a few year's time.



My views.




As always it makes sense to DYOR






REFERENCES

0] https://www.livewiremarkets.com/wires/meet-the-fundie-who-pioneered-the-founder-led-strategy
1] https://hbr.org/2016/03/founder-led-companies-outperform-the-rest-heres-why
2] https://www.indiatimes.com/trending/human-interest/success-story-of-mohan-singh-oberoi-544510.html
3] https://www.oberoigroup.com/aboutus/founder
4] https://www.reuters.com/article/global-companies-founders-idUSKBN2741U5
5] https://www.livewiremarkets.com/wires/meet-the-fundie-who-pioneered-the-founder-led-strategy
6] https://www.livewiremarkets.com/wires/why-founder-led-businesses-beat-the-market-2021-11-25
7] https://drug-dev.com/heart-failure-market-to-soar-to-11-8-billion-by-2025/#:~:text=The%20heart%20failure%20market%20is,research%20and%20consulting%20firm%20GlobalData.