Result or no result, page-10

Heading into a Phase 1 trial in an area of significant need, I need to remind myself that AdAlta only has a market cap of $15m. So what do we get for our $15m?

• well.......a drug candidate heading into clinical trials in an area of significant need.
• a grant of up to $1m to develop a radio-labelled tracer to "provide strong, marketable data.....for commercial discussions with potential pharmaceutical partners"

By no means an exhaustive list but really just dot talking points. For instance, what does the phrase potential pharmaceutical partners mean? Does it mean that if everything goes well AdAlta can expect that it should generate some pharma interest? I expect that its not pie in the sky because the CEO makes the point in the recent Strategy and Timing Update that the review included discussions not only with leading pulmonary physicians and the CRO but also several potential licensing partners. In other words there is current engagement with potential licensing partners.

Potential licensing partners will undoubtedly be interested in a number of things including the novel use of PET imaging to track distribution and time on target of AD-214. They will be interested in the trial design particularly in relation to whether AD-214 could be stand-alone or effective in combination with pirfenidone or nintedanib and whether there is any trade off with increased toxicity in combination therapy.

Putting things into perspective, discussions with potential licensing partners are usually held when clinical data is available but in the case of AdAlta, it appears that pre-clinical data to date has been enough to generate high level discussions that involves or will involve strategic planning intrinsic to the success to the trial. We actually get quite a lot for our $15m.