turning point, page-15

PA - it's nice to get a response that's not too hostile for once. Still, I am unable to entirely agree with you. Your post makes the following four claims:

1) Injection to the balance sheet: Achieved
2) Success in transgene drugs: Achieved
3) Commencement of Phase II trial for VIR-201: Achieved
4) Success in the theraputic vaccine area: Achieved

Let me address each of the above:

1. As of 30/6/2009, Virax had shareholder equity of NEGATIVE $604K. Since that time, they have raised a mere $1.3m (less expenses), so their balance sheet is hardly a thing of beauty.

2. Transgene may well have had some success, but Transgene is not Virax. The key point is that both the timing and quantum of funds to be received from Transgene are highly uncertain; the obvious possibility exists of Virax going bust before Transgene stumps up any cash. Indeed, Transgene is no doubt well aware of Virax's financial predicament and may well be going slow to pay-up in the hope that Virax goes bust.

3. Commencement of the Phase 11a trial (South Africa) is all well and good, but it is the succcessful outcome rather than the mere commencement of the trial that is important. If the trial is a failure or even just moderately successful, it's game over.

4. While it is true that Virax had a successful Phase 11a trial (therapeutic HIV vaccine) in late 2003, the development of this product has long been suspended due to lack of funds. Funding issues aside, the key point is that success at the Phase 11a stage is far too early to make assumptions about the efficacy of the product (the sample size was too small).

You also say that Virax is a 'roulette gamble with excellent leverage'. While certainly it is a roulette gamble, the leverage is not as great as you think on account of the large number of shares on issue (with significantly more shares inevitably to be issued). Further, the company's acute cash shortage suggests the odds are not as strongly in favour as you seem to think.

Anyway, that's my two bobs worth. Good luck with it.