Price rise is no surprise.

With speculation growing on upcoming events the question needs to be asked what is a reasonable share price or market cap for POH. After an extended period of time in the doldrums the company is seeming to forge its own path leaving behind an unwanted history. At its 'modern day' peak POHs share price was floating between 15-25c on what could arguably be described as being at a far less developmental stage in comparison to now.

In February 2016 a broker coverage report stated -

Based on our NPV valuation, we believe that Phosphagenics is substantially undervalued at the current share price of AUD 0.007 and is trading heavily below cash. Using our valuation model, the Company’s current total value should be AUD 100-115 million, or AUD 7.9-9.0c per share. This represents a substantial upside from the current share price.

Although arguable written for POH, their valuation model would have been calculated using information provided to them by POH and by using their own valuation models. This valuation was provided pre-April/May announcements regarding Terumo.

Considering the information below one has to ask what could successful agreements mean to the share price and market cap. Of note to me is that the two opioid patches are for Japan only. Successful licensing opens the door to, what you would think, is a much more significant global deal whilst at the same time significantly de-risking the company.


Terumo exclusive license agreement for oxymorphone patch in Japan would include:

- license fee
- milestone payments
- royalties


Terumo exclusive license agreement for oxycodone patch in Japan would include:

- license fee
- milestone payments
- royalties


Terumo R&D and potential license agreement for propofol includes and would include:

- Terumo paying for all development costs
- Global development and license agreement with equal share in additional license fees and revenue
- Terumo retain marketing rights to Japan and Phosphagenics to Aus & NZ

Terumo R&D and potential license agreement for undisclosed product 1 includes and would include:

- Terumo paying for all development costs
- Global development and license agreement with equal share in additional license fees and revenue
- Terumo retain marketing rights to Japan and Phosphagenics to Aus & NZ

Terumo R&D and potential license agreement for undisclosed product 2 includes:
and would include:

- Terumo paying for all development costs
- Global development and license agreement with equal share in additional license fees and revenue
- Terumo retain marketing rights to Japan and Phosphagenics to Aus & NZ


So is it really a surprise that as time nears for a possible licensing decision that the price starts to rise? The question is what will it rise to, as from above, progress in any of these pipeline products provides plenty of justification to raise the market cap in my opinion. October will certainly be an interesting month ahead.

Mylan takes a back seat for now, as Terumo moves to the front of the queue, as does Themis quietly chugging along in the background, as does animal health and bulk sales. If the Japanese comes to the party with effective, upscalable and stable licensed first in class patches, I can't see the price being anything short of being in teens to start, not because of potential (as has been in the past), but on impact on immediate revenues via payments and formulation of future revenue forecasts.
A big turning point for the company if it comes off and a big turning point for the share price if it comes off.

Over to you Terumo

IMO of course