Paradigm is Unique - It is Value not Growth

Hello everyone,

I just wanted to post to calm some potential nerves out there after the share price decline over the last few weeks.
Hopefully, my insight, whether right or wrong, is in line with other people and their thesis.
Whilst there are numerous "theories" to why the share price has declined, I would like to provide my two cents below:

Over the last month "growth" stocks have taken a beating:

1. Afterpay is down 23% today
2. Nearmap got smashed today 23% after a US patent issue today
3. Appen is down 19% today
4. Mesoblast is down 32% ytd.

The list goes on (nuix, adore beauty)

Now lets look at each of these stocks individually to assess the merits of their share price decline

1. Afterpay founders have taken considerable money off the table, it is a typical "total addressable market" stock, one where the metrics on an LTV:CAC basis point to an overvaluation. There are multiple rivals in the space now, and its got numerous competitors in the US such as Klarna and affirm (Affirm was sold off recently in the US).

2. Nearmap has US patent issues and that is a huge negative catalyst, so understandable.

3. Appen reported at the Macquarie conference choppiness in their growth, particularly in lieu of multiple clients they are servicing building their own in-house systems, and numerous competitors are enetering the market.

4. Mesoblast has always been a problematic stock for nearly a decade, and that's because they have failed to listen to the guidance from the FDA. Also stem cell companies bring about contentious issues for the US FDA.


Now we get to Paradigm.

• No worthy, non-opioid competitors to Paradigm.
• All the above companies have large, fundamental barriers in front of them. Paradigm had a delay because the FDA is tied up (also see Proteomics for their FDA delay for feedback) and numerous other companies. This is not a fundamental hit to the thesis at all.
• Paradigm is not a typical growth stock like the ones above, and this is the misunderstanding from a lot of investors. Paradigm's safety profile, SAS data etc make it more geared towards a value play in the biotech space (see even the thesis from Collins Street Asset management on this nuance). It is not a typical biotech play.
• It's ridiculous that we are going to open an indication for phase 3, and we are sitting at a market cap of less than $500m. Most US companies entering phase 3 have market caps a lot higher and their chance of success are much much lower. They do not have the benefit of the data that we have.
• We have a cleancap structure and cash in the bank - there won't be much spend until we initiate sites and provide product (again wrong by morgans).
• Morgans and other brokers are downramping, or selling positions due to the other growth stocks getting hit. Short positions have decreased on paradigm, which is obvious considering we are going to open an indication soon and we have been ramped so hard below the technical level of support.

I honestly think that this is no-brainer. I have started accumulating more - a delay from the FDA is not a hit to fundamentals like the above. A margin of safety is the nexus between growth and value. This range has a wide margin of safety for accumulation. Keep the thesis simple and clear and be devoid of emotion.

Stay well everyone!