Talk about picking up a lot of things the second time around! I reviewed my notes and there is so much material and insights....Part 2 tonight will mainly focus on the later half of the AGM covering the Questions, there were some pearlers and you know what? Most of them were ours! There are quite a few good quotes in this post, do please enjoy, I surely did, extracting them out from my notes!
During the presentation, this little graphic on slide 4 also caught my eye...Paul also mentioned this and said how just a few years ago it was 100% Australia by location....it will be interesting to see how this changes over time, no doubt the US allocation for instance will change and this may happen noticeably from next year onwards.
As mentioned in Part 1 of my summary, I was impressed we got our questions answered, it's a testimony to you guys for coming up with the questions and voting too, as I have said, it is because of your positive encouragement and great attitude on this forum that we have achieved so much with oh-so-much more to come!
Q1. Is PAR talking to anyone about distribution right now? If not when do you think discussions could start?
In answer to our first question, in his own words I give you this quote from our CEO in regards to some companies from Europe and USA looking into us:
"...those companies want to know more about the feedback from the FDA and I think after the FDA's feedback and once we submit and open the IND then the interest will start to become very significant".
I have always speculated that the start of a phase 3 for us will be pivotal, it's a real and definitive milestone. Sure a lot of work has gone into getting us to this stage, but once we start the P3, it is pivotal, the FDA has done the due diligence and approved us to start...we have enough evidence for us to proceed through this final hurdle. Paradigmers, we join a great class of Pharma companies when those Phase three programs start.
In truth that AGM was littered with great quotes showing us shareholders the good focus PAR has and their intentions and some of their rationale....
"We are really hoping to be able get through one of the Phase 3 trials before we necessarily engage with a distributor"
Paul also mentioned the fact that we want to get through at least one Phase 3 trial, with that in mind, his exact words are an indication of how acutely aware of the increasing value the longer we hang out for a deal:
"Later in the process, the better, for maximising our position in any transaction."
He also went on to say that he realises that this is high on the shareholder's list of what they want to see which is "Let's have an agreement, but the reality is for us to be able to participate in a meaningful way for the best possible return". He then went on to say "We need to have some more credits on our side, not only starting a phase three but also executing and finishing the phase three."
It's finally all about removing risk, and this means spending more time and covering all bases, he went on to state:
"And then we have largely de risked the asset which will then put our value proposition much higher"
A few other statements in this section were: NPV has been prepared and it is substantial (based on the assumption that we execute and finish our Phase 3).
We don't want to go too early. To really maximise we believe it is better to delay any transactions until the conclusion of one of the P3 trials.
We also have 2 companies from Japan that we are working with...(But it is a long process, don't expect much activity until we get feedback and commence P3 trails, "they are certainly picking their times when they want to transact" were Paul's exact words)
All of the above, was a summarised response to our first question! This is how comprehensively he answers it. This material cannot be found in the slides. This, as you know, is why attending such presentations are valuable for us shareholders and contain wonderful nuggets spread throughout. Attending this live (like last year for example) is another story, the excitement and buzz that follows when the meeting concludes was electrifying though it's almost chaotic as you want to talk to so many individuals and you are wary of time....I think this is another reason why the upcoming R&D day/event will be good as I believe we will get more time and it will be slightly more paced and relaxed, there always seems to be a time constraint, is it just me that thinks like this?... I'm telling you here and now, that day (R&D) will also be very illustrative and informative..a real eye opener from my and your point of views. (My opinion).
Let's cover the second question that was asked:
Q2. Please explain the rational and is the company still fully funded for an expanded P3 trial or will more funds be required towards the end? If so how will that money be raised eg part of a distribution deal, SPP etc?
Basically Paul answered this by saying they really would need to wait for the FDA to come back from the Type C meeting to assess the requirements. Is there any further data that the FDA require? Will this eventuate in another trial or extra patients having to be recruited? Along with that, Paul went on to say that the decision also needs to then be made as to the timing of the registration type studies (if required). He stated two options if this is required:
Option 1 - Do it upfront while the P3 commences and progresses Option 2 - Do it after trial is done but before registration is completed.
Paul seemed to think that he and us (shareholders) would probably agree it's best to get this out of the way at the start and while recruitment for P3 is going along smoothly. Interesting choice of words as you'll recall in The Interview with an FDA process expert (New guys, see links below), the CRO expert we had a chance to speak to mentioned this was critical and as shareholders, this is something for us to keep firmly aware of...how is our recruitment going, is it 'smooth', what are the drop out rates if applicable?
New guys, here are the links to The Interview with a CRO, it was a great insight into this process, again it was questions from YOU guys as well that really made this interview a valuable exercise for the benefit of all ---->
Paul also then went on to clearly state that PAR has a big Global Bank they work with and this ensures "we have the necessary defences in place" to try and stave off "...the process of getting to the end of a P3 without any sort of acquisition or being forced to take a deal". Par-Peoples, we have too much potential, in my views, to be forced to take a deal.
Paradigmers, this is what we want, this addresses one of the biggest risks that companies of our young vintage typically face. The fact that management are acutely aware of our vast potential, have skin in the game and are prepared to delay the immediate gratification of a deal, speaks volumes to me...
Paul then went on to answer another question about Bene and supply, he remarked the "Good Ol' Germans" had the foresight to ensure that their current facility could adequately handle a full secondary production line to double their current capacity. They also have the ability to expand the shifts from the limited (currently) shifts to 24/7 production. Bene have been made aware of potential forecasts and plans by PAR.
Amazingly Paul even stated that Bene do have a long term agreement with a registered forest in Germany for the production and supply of the European Beech Bark.
Gives me goosebumps to imagine future volumes one day in the not too distant future...and just how many people we are going make a vast difference to.
Paul went on to state:
"Once this product begins to roll out globally it will raise the question of whether or not PAR should invest with Bene in a separate or second facility to expand the production of the product." He then stated, "It all comes back to let's conclude the Phase Three clinical trials that get us a successful outcome, let's get registration and that point we can become very serious about developing a joint venture to develop a new facility with expanded capacity".
Ok then there was a question from someone else (no name stated, was directed to Donna [CMO])....here it is:
Question : Given the work that's been done to date on understanding PPS's mode of action, do you anticipate the patient selection criteria to be refined accordingly to better target patients for the phase three trial?
It was a great question and it was nice to hear Donna answering it live from NY....Here was her response:
"We have looked carefully at the data that we have acquired through the prior Phase 2B and SAS data to really understand the patient responses and we have worked very carefully with the CSO to understand the mode of action and how it related to patients with OA. That's how we are come up with the patient target population being those that have OA of the knee that have not been responsive or tolerated with NSAIDs and/or Tylenol. On the basis of the data we understand the clinical patients that have not responded and have had pain for 6 or more months and those that have radiographic evidence are the target population for our product and that is in part due to the multi modal action:
1. Against pain NGF 2. Anti inflammatory action 3. Action reducing sizes of BML correlated to pain and also deterioration of the joint
"We believe we have the target population right for the P3 programs based on our prior experience."
The final question was also another good one and one that we as shareholders are all now hanging out for of course:
Question: Please elaborate on the Pay for SAS program and when we expect that to start along with indicative pricing? [This got directed to Donna]
We have recently brought on a commercial head and the group is looking very carefully at how we would implement a commercial program for SAS. Understood that some of the decisions made at this time could impact the pricing point for the product at a later date. So there is a bit of commercial work to be done and there is also a need to ensure we have the clinical trial activity taken are of and the needs of the SAS patients. In the coming months we will be coming back with more detailed info about how the plans for commercial SAS are looking going forward.
Almost as bonus Paul then interrupted the MC and stated that he would like to answer one more question, this was our third question as voted by YOU! Mate it was at this point I was scratching my head wondering where all the top in depth questions from the big Instos were...Here is "Alan Smith+ from Morgan Stanley with a question"...."We have a two part question from Lisa Beuvant+ from Goldman Sachs.....Terry Chow+ representing Bell Potter has a question on the clinical study.......etc etc....
+ = Mozz made up names purely for effects and illustrative purposes.
Question: What does Paradigm believe are the major risks to the company becoming a successful and profitable bio pharmaceutical business?
The need to ensure we address all the needs of the Global Regulators. So we have presented a clinical plan and we have to make sure we have addressed all their concerns and questions in relation to make sure we modify our trials to address the safety and efficacy concerns are addressed.
"Too often I think we see Pharma companies going off and doing clinical studies and once they are done the pharma companies believe they can simply go off and do the trial and then apply for registration. It doesn't work that way. The way it works is that the sponsor has to make sure that when they are doing the trial that the agency has 'pre approved' the:
study design
all of the risk mitigation strategies
statistical analysis plan
...and the rest to make sure the product is safe and hopefully effective and if you provide this back to the agency then there is a much higher chance of success and passage through to registration than trying to suggest to the agency that this is a trial that is adequate for registration."
In closing Paul stated:
"All of our staff understand that we need to be very responsive to the agency and make sure we align our study designs with their requirements and I think that gives us the best chance of success."
THAT'S A WRAP AND THE TAKE-AWAYS
Finally Paul summarised the entire AGM material that he thought was important:
The OA market is a massive market opportunity
Global Registration strategy all more or less at the same time, "which will have a huge impact in terms of the value of the asset".
Uniqueness of the Multi Modal drug, iPPS - multifactorial disease (OA) to be adequately tackled with our Multi Modal drug.
New concept of R&D Day to update the market on the FDA Type C response and discuss our clinical pipeline and R & D Activities.
FINAL WORD
Another great AGM, sure I missed the mingling at the end with the staff, management and of course the odd footy player...but I'm hoping next year we will be back to the old format. Much to be learnt by going over the AGM points and quotes again. My overall summary is that we are on track to have an incredible year next year...the year after that will also be quite a year. In just my simple views, hang on to those shares!
DISCLAIMERS
Again these are my notes of the AGM, I have tried to verbatim quote where I can in "quotes". Please do your own research, never rely on just one source of information and do take into consideration your own investment profile and needs before allocating any capital to any investment idea. There can be many goals in terms of events and timings but these, as always, are subject to many factors sometimes quite beyond the control of the company we invest in.
