I have to say that I agree with GRQ on this point. VHL could have better utilised price rises to raise capital, perhaps via a placement or other slower methods (SPP's, rights issues etc).
The trouble is that when they need funds, the cash balance is low... so people are worried about sending their money when the amount raised will only provide another 6-12m worth of "minimum spend" let alone full blown research.
VHL has a chance coming, and I'm sure the management has learnt from their experiences in raising capital. Sure they have a prospective technology platform, sure it has been validated by Transgene and the higher "concept" by other developers, but Virax is not Transgene or some other company. They have to focus on developing their pipeline which for years has remained quite stagnant in terms of hitting milestones.
They have proven, that with funds, that they can keep to budget and timelines with regards to clinical trials. This phase II trial looks to be on track by reading their publically released announcements. Investors have severly punished the stock over the years, and I don't think they have been "forgiven" so to speak as they are on the verge of releasing phase II results in a few months time. This is their chance, should results prove good, to raise funds and accelerate their technology platform commercialisation.
I may come across quite bullish on the stock, but it's not because I see the stock as a guaranteed win. I view it as a good leverage play with some sort of downside protection given it's market cap and technology platform validation to date. It's a mugs game, the phase II trial will either succeed or it won't. If it doesn't then punters like me will surely be burnt, at least in the short term. Let's wait for the results... mid year is only around 3 months away.
I hold :)
VHL Price at posting:
8.9¢ Sentiment: Buy Disclosure: Held
