Just some of my thoughts...
1. Management has missed promise after promise after promise after promise and delay after delay after delay.
Agreed. And we should expect more. While Donna has suggested the current timelines are a conservative estimate, I think they're accurate.
2. Over the last 12-18 months, the company has burned more than $50 mil. with VERY LITTLE progress. There must be concern that the remaining $50 mil can be burned without achieving enough good news to support a cap raise or attract a partner.
You'll get a readout for 008 and potentially for the 002 P2b trial, as well as news on the MPS front (potential partnership), prior to a cap raise IMO. If the results are consistent with previous results, then this will significantly derisk the asset.
3. The company is a headless chook until a new CEO is on board and the company must be struggling to find a good one. Skerrett is certainly not CEO material. Fixing problems will take the new CEO 6-12 months. In my view, he/she must abandon all of the peripheral stuff until the main OA P3 trial is fully funded and fully recruited. If it can't get that done, it is cactus.
I disagree. I get the impression it's "business as usual" and par are largely focusing on the OA trials right now and nothing else. Donna has far too much on her plate as CMO to also take up the CEO position. We won't need a new CEO until around July 2022 since this is when all of the real fun begins. My bet is it'll be a past Biomarin senior executive and they'll bring with them a partnership deal for MPS.
4. Nearly all of the company's functions are contracted to 3rd parties, so when issues arise, resolving them is very costly and time-consuming. Also, potential partners are very cautious about dealing with companies that are reliant on 3rd party contractors. The new CEO will have some huge challenges. Also, my guess is that any partner will require that bene Artsmittel be directly involved in the deal. That could be good for bene, but probably will substantially dilute PAR's $ and control of terms.
This is not unusual for a small biotech company like PAR. 3rd party contractors are all PAR needs at the present moment, but i'm sure if we experience success with the OA program then PAR will be in a position to build. Normally small biotech companies just perform the work so larger pharma companies can come in and aquire them later. PAR seems to have other plans.
5. IMO the OA IP is weak and indefensible if challenged because there is just too much prior art. Also, the Arthropharm COVID patent is strong and has an earlier priority date so PAR has no hope of successful development of its SARS project unless it secures a license.
Generally speaking PAR's IP is weak, but it'll be really hard to produce a generic for iPPS.
6. Prof Felson seems to have lost enthusiasm (see his video) and has raised a couple of concerning issues; e.g. he notes experience with other OA trials where patients in the treated arm got pain relief and then increased their activity only to cause further joint damage whereas the placebo arm got no pain relief and remained more sedentary causing less OA disease progression. The placebo effect is also a very real issue that could significantly compromise the P3 trial results. I also wonder whether the FDA will be happy with the current dosage trial that has just started which is really not a dose escalation trial at all but just various administration protocols which in my view would not even satisfy a P2, but maybe they have somehow got FDA signoff. The OA P3 trial is definitely not a lay down misère, and even less likely to be the definitive pivotal Phase III required for FDA to give marketing approval without further trials.
This is where the DMOAD action comes into play for iPPS since it means disease progression stops. Those other treatments do not act as a DMOAD, so the cartilage degradation will continue. OA is a progressive disease so both the treatment and control groups should've experienced a reduction in cartilage in the joint. The placebo effect is much less (around 50% less) for subcutaneous administration than intraarticular, yet clinical trials still experience success for IA administration.
7. While there is still a chance that the P3 trial will be a technical success, we won't know until 2026 at the earliest and the odds of failure have certainly increased. The chance of partnering before 2026 seems remote; any earlier would at best just be an option with a small up front option fee with big bikkies not until perhaps 2028 if they get marketing approval.
There is currently a high chance the P3 trial will be a success based on all the clinical research / trial data we already have for iPPS. If the readouts for 008 and 002 P2b trial are consistent with previous findings, then this will increase the probability much higher. We won't know the full results until around 2025. Partnering for OA will probably start prior to the final readout for 003. If you wait until 2028 then it'll be too late since its first in first served.
8. An absolute minimum $50 mil. plus cap raise is essential well before the main OA trial can even begin in mid '23. Raising this $ will be very difficult unless the SP is below $1 and the disc. is the max. allowable for instos which is 25%. Many of the recent shareholders will, or probably already are cutting their losses prior to June 30, so this just adds to the downward SP momentum for the next year at least. Overall, I expect the capital markets will become increasingly risk avers for the next couple of years.
50 mill makes sense if they're also raising for other purposes as well, such as NDA and commercialisation expenses etc. They won't need 50 mill for PARA 003. Most biotech stocks are down a substantial amount since the start of the year. Like all sectors, the biotech sector will have its day sooner or later.
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