prana's burn rate and r&d expense

Prana's spent about $5.0 million in the past year ending June but their R&D contract expense was reduced from $2.4 million to less than $100,000 during that period. Without that reduction, their burn rate would have been closer to $7.5 million annually like 2009. I calculated their current burn rate at $417,000 per month without R&D and $617,000 with R&D they only have 12 employees. What are they doing?

Prana has never explained who they contract with for R&D and what they are doing. Who is making $200,000 a month on Pranas R&D and what are they doing? Are these related parties, friends, Tanzi, Bush or some other group of insiders? With this reduction in R&D occur in the next two years? Prana needs to limit their cash burn rate so they can survive the phase 2b results which will take 2 years from now.

If they issue the 225,000,000 new shares at the end of September, they should have about $24,500,000 cash net of selling expenses and their July & September cash burn. That leaves 2 years of operations without R&D at $5.0 million per year and $14,500,000 for the phase 2b. If R&D goes back to $2.4 million per year, that only leaves $10,000,000 for phase 2b and that is if Prana spends its last dollar two years from now and has zero reserves. The figures are so close that it is highly likely that Prana will have to go back to the stockholders for approval to sell even more cheap shares before the results of the 2b are known.

Prana has operated in a black box as far as I am concerned about their R&D contract and how they got a $2.2 million credit in the past year and what the R&D expense will be over the next two years. Why burn up all that cash when the stock is close to $1 and they cannot even get their lead drug to a 2b? What are they hiding? It is time management gives the stockholders the rest of the story. The line that raising money is so hard right now does not cut the mustard. They spent lots of money in the past 2.5 years doing what? They have not even come up with a lead second compound. They have 12 employees and the have spent close to $15.0 million since February 2008. What have they accomplished? PBT2 was being shopped before the results of the 1b and they are still shopping it. Give the big Pharma a drop dead date, sell the new stock, stop new R&D, stop the cash hemorrhaging and get moving to a 2b.