The Finish Line is in Sight

Recently I had a lengthy discussion with a very senior NZ Investor, we spoke about Biotechs and Baby Pharma.
Many people have the belief that Tech and Comms have run their race, examples were "well now I have Ultra Fast Broadband, how mush faster do I want to go? offering the market comms most will never use,, tech well the phone wars have shown how fickle that can be,,even Apple realise you cant expect your customers to upgrade yearly, ,, Mining ,,well the the Millennial Generation aren't so keen on digging holes in the Planet (ironically its their tech desire that warrants holes being dug).
With more and more Individuals looking for better quality of health and increased longevity , Biotech and Pharma become the focus of consumer spending which drives sales in the sector which encourages investment as investors can see demand for products and in turn financial returns.
The level of healthy consciousness flows across the family and of course our animal companions, Close companion Pets are dogs and cats.

Pharmaust are not one to blow their own horn, in fact i find their modesty frustrating to say the least, as with most Professions you can become immersed in your own discipline, thankfully for us Elanco are buying Science,,  so below IMHO I have elaborated on the below rights issue bullet points.. 

  The funds to be raised will be used by the Company for a number of purposes, depending on thetotal amount raised.
In part, the funds will be used for the purpose of carrying out Phase I and PhaseII clinical trials in canines suffering from lymphoma and other cancers. Phase I is underway, split into two manageable stages,, the 2nd stage of Phase I will run dove tailed into the finish of Phase I stage I, there will be no time delay,,This enable the company to announce full data from Stage I of Phase I with out having to wait for Stage II Phase I to be completed. There will be a small delay for Data analysis.. Inflection Point/ Catalyst  

PharmAust has entered intoan Option Agreement with Elanco US Inc. to develop monepantel (MPL) as a novel therapy to treatcancer in dogs. Under this agreement, Elanco receives an option to negotiate for a licence to usePharmAust’s intellectual property covering the use of MPL to treat cancer in veterinary applications. Elanco are a Mega Corp, spun off Eli Lilly last year , they have cash on hand of $2B USD+i have always been impressed that PAA were able to gain an audience with Elanco let alone gain a comprehensive agreement with them. The qualification and due dilligence carried out by Elanco would have been extremely thorough and obviously PAA passed muster with flying colours otherwise the opportunity of an option wouldnt have progressed to legal and now subsequently signed sealed and delivered.

Elanco has previously supplied PharmAust with Good Manufacturing Practice (GMP)-grade MPL foruse in its clinical trials.Progress towards completion of clinically material trials to provide clear evidence of commercialviability in canines and man has been at the forefront of PharmAust’s endeavours during the past 18month.The Value of this GMP grade MPL is in the low millions but still a solid commitment by Elanco.

To this end, PharmAust has achieved the following milestones during the past 18 months:
• Phase II canine lymphoma pilot study has successfully achieved its key primary endpoints ofsafety and efficacy. This outcome gives the Board confidence in the performance of MPL inthe current proposed trial in canines. OK I'm going out on a limb here, The previous trial had remarkable oncology treatment results, this was completely overshadowed by the poor taste and palatability issues. We know the dogs did not like the taste and being canine could easily remember the smell which amplifies there objection to the capsule for future dosing. so we had 6 of 7 dogs tumors respond to treatment and we know they would have vomited up some of their original doses.



• Development of a method to manufacture MPL and its related aminoacetonitrile derivatives,to GMP qualification with Syngene International Ltd.
This is the "can we commercially produce this Treatment in Pill form" This enable mass manufacture not a bespoke medication that has inhibitive high costs,, I have been in other Baby Pharma that leave the lab and the "prototype Meds are Thousands per dose" PAA have leaped forward her,, The pill that has been formulated is the Pill for K9 and Human Trials plus if successful is the rxact pill that will go to market.
• Independent confirmation that MPL manufactured by Elanco displays anti-cancer activity invitro by researchers at the Olivia Newton-John Cancer Research Institute (ONJCRI) inMelbourne.
30 Human cancers tested 26 showed PAA MPL had a beneficial treatment effect on the cancers, additionally the ONJCRI invested $50,000 on the testing which is great show of support for PAA to be chosen for limited funds to be utilised on.
• Independent confirmation of MPL's anticancer activity in vitro following the manufacture ofMPL by a different company and according to a different method.
• Independent confirmation of the anticancer activity in vitro of the investigational new drugMPL’s major metabolite, monepantel sulfone by ONJCRI.
So when the body breaks down MPL and what travels across the blood barrier is beneficial but the residual of Metabolised MPL also displays anti cancer activity, so you have a residual a longer dosing from a single pill.
• Agreement with Canadian-based BRI Pharmaceutical Research Inc to reformulate MPLand identify the optimal formulation for oral delivery for its clinical trial studies in both dogsand humans. Refinement will always be required to aspire to deliver the very best.

• Successful reformulation of MPL to a new tablet with a 15 x higher relative dose than thehistoric liquid formula, thus reducing tablet/capsule burden for patients. so if the capsule that the dogs vomited up that had superb oncology treatment benefit from now contains 1500% more than a unpalatable capsule.
• Demonstration of better than expected absorption using these new tablets from PharmAustand BRI.PharmAust 
• Confirmation in a pilot study in dogs that the tablets do not have a poor taste, a problemencountered with the historic liquid formula and which previously limited dose escalation.


The Beagles ate the tablets from the hand and from the floor, so if a Beagle with 20 times the taste and smell of a Human could not detect a poor taste or smell then its chocks away for humans,,plus if you were unfortunate enough to need MPL and Knew it worked you would slog em down if they tasted like xxxx. But they dont,,
• Successful scaled manufacture of these tablets to quantities sufficient to undertake clinicaltrials in both dogs and humans.• Elanco has previously supplied PharmAust with GMP-grade MPL for use in its clinical trials. These are the Pills for Manufacture, that is a huge leap for a Baby Pharma to overcome.


• PharmAust commenced Phase I Trials in Dogs on 19 February 2019. UNDERWAY
• Notice of acceptance for patents for the use of the MPL drug family in cancer in the US andEurope. This is our IP this gives us an exclusive 20 year period to dominate this space thats the value Elanco understand here, it eliminates wannabe competitors...or adds revenue by territory licenses.
• Appointment of Mr Neville Bassett, AM to the PharmAust Board bringing a wealth ofexperience. I would want this guy on my side of the table for when the ink is getting ready, Plus Roger is an asset at this point also,,he has overseen large transactions like the sale of Welcome Pharmaceuticals.
• In 2019, Epichem Pty Ltd (Epichem), has been awarded another one year extension to itscurrent contract with Drugs for Neglected Diseases initiative (DNDi), extending thatrelationship to 11 years. $$ Money in the Bank Epichem will continue to grow,, its our own R and D lab also.
• Epichem has been awarded an extension to its contract with a leading Californianbiotechnology company, Unity Biotechnology, Inc. (Unity).
• Epichem has gained accreditation from NATA (The National Association of TestingAuthorities, Australia) to ISO17034:2016 an internationally
recognised standard ofcompetence and capability for the production of Reference Materials.

As moneys are raised beyond the Minimum Subscription, these funds are intended to be used toprogress development towards a human clinical trial, improving the MPL product and undertakingmarket analysis as well as being applied as further operational expenses (general working capital).

The Company has engaged Alto Capital to act as our Lead Manager to this issue to place anyshortfall shares on a best endeavours basis. 
Alto carried out the previous CR so have a solid track record, should we even need them.
Your Board believes that PharmAust has met several substantial milestones in the last 18 monthspaving the way to commercialisation of MPL and the profitable expansion of Epichem.
This fundraising, if fully subscribed, will place the Company in the best position it has enjoyed inrecent times to achieve outcomes in its commercial objectives.I can advise Shareholders that I and the other Directors of PharmAust will be taking up their rightsin the Offer in full.

So thats my reading between the lines and giving a little bit more info on the rights issue.

Many say Biotech is a Binary decision , does it work or not 50/50 well with PAA they are a long way down the commercialisation path, K( treatment is a nice step off into some serious money on the way to completing Human Trials..
Here's my 5c
First Phase II , on oncology results alone not taste etc 30% Risk off the table 6 of 7 dogs should visible benefit from MPL.
Overcoming Taste etc 10% Risk Off the table
Manufacturable Pill 10% off the table
ONJ confirmation  20% off the table
3rd party confirmation 10% off
Beagles physically taking pill from hand and floor 15% off the table
so if this was a hundred meter race we are 5m from the finish line with Elanco waiting for us ..... The Finish Line is in sight,, dig deep , breath and we should all be rewarded for our patience.... NZT