Responsibilities of the team, page-34

Hi Eddy,

I now share a few of your concerns.

(** I'm not saying the following in a negative context, but stating my naivety when researching RAC**)

From the research I conducted into RAC I believed that they had no intention on selling out to a 'big pharma', but instead wanted to bring old drugs back to market and commercialise them themselves to generate revenue for RAC and shareholders. Which was a nice thought given just about all other biostocks in this MC range are looking for that big deal.

However, these comments have made me realise that I may have been mistaken.

• WhileI can’t tell you the manufacturing cost, it is a tiny fraction of the saleprice. The sale price of a drug that is not generic (like Bisantrene) is afunction of what can be justified to the market (insurance companies andgovernments), not what it costs to manufacture. Many new anti-cancer agentssell for hundreds of thousands of dollars per treatment. The key to charging ahigh price is providing a real benefit to the patients. If Bisantrene behavestoday as it did in the past then there would be no problem justifying a veryhigh price.
• I would rather see some big pharma executive get a oversized bonus for selling Bisantrene at a massive markup than see some person with AML die because nobody could figure out a way of paying for the trials need to bring it back.

I guess at the end of the day the outcome for patients and early shareholders will be the same, but I liked the idea of a small Australian Bio company offering a rare cancer treatment to patients and holding onto that asset and not letting it sell out or get lost to big pharma again. All the while building their asset base by finding other drugs. (After recent media around psychedelic drugs that were trialled in the 60s before becoming illegal it would be interesting to know if there are any lost drugs out there that could be of value to a company like RAC...? Would also love to see them pick up a small household drug like a Betadine or similar for a regular income - I'm sure this isn't an easy process, but I originally pictured RAC starting small and becoming it's own pharmaceutical powerhouse. I now see them as more of a broker finding drugs and selling off to big pharma when it's gone through approval process)

IMO, DYOR, etc