Yin and the Yang...equal forces? Can be indirectly applied to us too.
It's not always about the positives, we have a good drug, it works well...it's safe...it's popular. BUT there is the other side as well, what is our competition capable of? What do people think of them? Are they any better than us? What are their advantages compared to us?In our case the main std of care is Opioids and NSAID solutions, these really aren't any sort of competition in regards to us, we are armed with the knowledge and so much data now. But it wasn't always like this.
Tonight let's revisit a story and an interesting update that just occurred.
STORY TIME
I love Mozz Story time, sometimes I wish I could read this stuff out to you, for then you would hear my enthusiasm, my excitement and you would hear the genuine fear and trepidation I felt when the dark times came...what am I talking about? Well read on!
I had been building up my PAR position over time, the more I researched, the more confident I became.,..I started sharing some articles with you on here and that also helped me in turn as you guys gave me your thoughts and sometimes counter thoughts as well, and it was a very good learning experience as we debated and brought info to the table for discussion. We both learned a lot.
Up to this point in time I had come across virtually no negatives, and certainly no competition, this was about to change. I still remember the date, Friday 20/09/19...it was early afternoon...to me, when I look back I liken it to me being in the sunshine for months, every day is lovely...as a new broker report came in (err I'm excluding Morgans from this cohort) and as I uncovered more research, the days got brighter for me. Until this one date...I came across a drug and a company and for the first time in my journey with PAR I felt a small twang in my stomach, kinda like a sinking feeling, not unlike posting one of these articles and then realising you have made a mistake and you have all of just three panic type minutes to find it and fix it....only worse.......there was something out there that had the look of competition and their read was not bad as far as I could tell at the time.
What do I do?
The first few minutes were panic stations in Mozz's mind...do I de-risk? Do I act now? Who do I contact? What time is it...Fri afternoon.....do I sell some percentage? After calming down pretty quickly I thought I can't react so quickly..I have to tackle this with the right attitude and the right equipment..you don't go to war by taking the first implement you see...this is a planned battle...we have been insuring ourselves for so long...we have research to back us up, we have testimonials from not some distant celebs on the football field (well we have that too), we have patients right here at HC....so much evidence, so many studies and there was lots of material to come as well, I had a long check list of articles I was formulating back then, future areas to explore.
As if I didn't have enough worry I also learned around that time that this particular potential competitor also had attracted a Fast Track designation from the FDA, though they were behind us somewhat, that could well accelerate them. Don't forget, a drug that's at the forefront, once it's been approved by FDA and then later accepted by Doc's the first past the hurdle can often stick once accepted....yes this might get trumped by a better class of drug but their drug was in pill format, another advantage over us.
So what did I do? I contacted the best source of info I could get...FiftyOne Capital...so for the first time I called them...I got the VoiceMail...dang..it was now late on Fri afternoon, I left a VM to call me back...I'd have to sweat it out over the weekend....Lo and behold, 51Cap got back to me within 15 mins of my message. Stellar effort and I asked my questions away...they put my mind totally at ease.
So What did they say?They said that we have a drug that is remarkable and it is all about pain and the reduction of pain to the patient. Pain is our focus, that is the primary endpoint...AND we do this safely. Safety is the modus of operation for us and nothing else has come close to our effect. The FDA are very focused on pain and on safety. This potential competition's own pain reductions were not close to ours and our iPPS was "Multi actionary". I knew they were right. In fact they speculated that their pain reductions to be under 20%...our hurdles were in the order of 50%..A massive difference. Their drug was focused on the action of one biomarker, namely ADAMTS 5. Later it was discovered in a world break through that our iPPS had effect on the reduction of at least two biomarkers, namely COMP and ADAMTS 4.
1972
Mozz...why mention that year? What's that got to do with us and your story? That's not a year...that is the competition I was talking about...Galapagos and their drug...GLPG-1972.
THE DEAL
Paradigmers, the Galapagos deal was a large one...humour me as I type it out :
$5,100,000,000
Yep, $5.1 Billion with a 'B'...and that's USD....mate, If we got that here and now, each PAR share would be worth the pretty sum of $30.86 AUD.
This shows us our potential. The 1972 drug always had limited scope and pain was not the focus for them. I remember Oxxa23 posting a pic of a tweet telling us a bit about the deal that had been done in July of 2019. Part of that deal was that Gilead (the Big Bro partnering company with Galapagos) would pay some $550 m on successful completion of the clinical trial. For further info including the exact details see the appendix below. It's a bit of an insight on how the deal was structured. It would have included a royalty of around 20-24% of net sales.
All very good Mozz, love your stories...yes it was scary story, maybe you should be posted this as a Halloween special.
Halloween Special with PAR's looming competition?
What is the Mozz Money Line. New guys? This a concept whereby you get your money's worth. It's the entire basis for the article, the centrepiece, it's the Wow....it's what finally we are all here for......you know, Tom Cruise, "Show me the money".
MOZZ MONEY LINE:
Paradigmers, the results just came out on Thursday...1972 showed no benefit against placebo. What?! Here is a quote:
"Galapagos and partner Servier reported top-line results from the Phase II ROCCELLA trial on Thursday and said the experimental drug GLPG1972, also known as S201086, showed "no signal of activity" in patients with knee osteoarthritis. "We are disappointed that ADAMTS-5 inhibition by GLPG1972 proved not to make a difference in this trial," remarked Walid Abi-Saab, chief medical officer at Galapagos."1
Not only that but their secondary endpoints were also not met...
Reference 1 in the reference section goes into a little more detail but basically the three doses they tried all didn't move the needle to any degree of significance and was virtually the same as placebo. This is in reference to their cartilage thickness. We measured our results by BMEL volume, grade and size, a snippet from our results back in early 2019 as a comparative example just depicting volume below for your perusal. Improvements in size and grade were also remarkable:
At day 53 compared to baseline, there was a strong trend for the iPPS group having greater reduction in total BML Volume [-34.2% vs. -3.6%] and total BML maximal area [-25.3% vs. +11.9%] compared with the placebo group.
Notice above that Placebo actually went the opposite way in the Medial Compartment, it continued to progressively get worse in the group. This was hard evidence by MRI. Don't forget this empirical data will still have a role in our upcoming all-important P3 trials as it forms part of the secondary endpoints.
WHAT DOES THIS MEAN?
This means with 19720 out of the way that we have even more of the market to ourselves and it is a good thing that I didn't panic sell shares any shares on that Friday in September, last year, not even 1 share, or the next week, or any time between then and a full year from then....We are witnessing massive deals that are getting done with companies that have so much less than us.
One by one we are knocking them out...we are eliminating any semblance of competition with our wonderful results.The general market is not aware of this. They don't understand it...they don't know about it and they haven't invested. Just wait till those large instos catch on in numbers.
DISCLAIMERS
I'm not saying there will be never be any competition I'm not saying you shouldn't ever de risk, take some money off the table, and not go live a little I'm not saying close your eyes,,,close your ears and say la la la la la, a whole heap of times and ignore everything around you forever
I AM saying this is looking good - I haven't seen anything like this. We have arrived at the party early, this is 26 years ago when CSL first listed...I really do feel FiftyOne Capital are right, Imagine we go back to the first iteration of the APPLE phone ...maybe even the second version of the phone...what is the APPL share price back then? $25? Are you late? How can you say you are late and "I can't afford $25 a share MOZZ"...what if you bought it at $25 and had just 10 shares...they are now worth 10 x 7 x 4 x $120 = $33,600. Those multiples are 10 shares times a 7 for 1 split, times 4 for 1 split (just recently) times the current share price.
I am saying we are prepared in terms of PAR...we have spent a lot of time waiting for the business end of this story to unfold and it is approaching soon, not unlike the iphone, we are feature packed, have a large addressable market and can handle multiple functions with the one drug.
Finally, DOYR is always prudent, don't over invest in anything.
ACKNOWLEDGEMENTS
1) Big thanks to my source for the heads up on this info, you know who you are.
2) FiftyOne Capital - thanks again for getting back to me so quickly back a year ago, I appreciate your efforts and I am a big fan. I am not paid by you, it's totally free-will evidence.
APPENDIX - Deal detail
(See reference 3 for full citation)
Terms of the CollaborationGalapagos will fund and lead all discovery and development autonomously until the end of Phase 2. After the completion of a qualifying Phase 2 study, Gilead will have the option to acquire an expanded license to the compound. If the option is exercised, Gilead and Galapagos will co-develop the compound and share costs equally.
Gilead will maintain option rights to Galapagos’ programs through the 10-year term of the collaboration and for up to an additional three years thereafter for those programs that have entered clinical development prior to the end of the collaboration term.If GLPG1690 is approved in the United States, Gilead will pay Galapagos an additional $325 million milestone fee.
For GLPG1972, Gilead has the option to pay a $250 million fee to license the compound in the United States after the completion of the ongoing Phase 2b study in osteoarthritis. If certain secondary efficacy endpoints are met, Gilead would pay up to an additional $200 million. Following opt in, Galapagos would be eligible to receive up to $550 million in regulatory and commercial milestones.For all other programs resulting from the collaboration, Gilead will make a $150 million opt-in payment per program and will owe no subsequent milestones. Galapagos will receive tiered royalties ranging from 20-24% on net sales of all Galapagos products licensed by Gilead as part of the agreement.
ust over a year ago I wrote a piece on the Yin and the Yang in terms of our drug and what we own.
(20min delay)