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I think it is timely to speculate a bit on the potential value of Phylogica.


Hopefully, if they enter into a transaction, they will have demonstrated the following:


- Patented techniques to identify Phylomers from biologically diverse genomes. These drug candidates are very important as they derive from proteins produced, by evolutionary processes, across very diverse life forms. The assumption that stability and biological activity of the compounds is heightened, by 3billion years of evolution, seems to be bearing out.


- Automated screening techniques means that the vast (280million and growing) Phylomer libraries can be applied to disease models. This is the classical "biotech" model of drug development. Understand the disease pathogenesis - engineer a drug solution against drugable aspects of that pathogenesis.


- Then there are the Phylogica targetted delivery, stability and optimisation techniques. These chemistries turn activity in screened Phylomers into drugs.


This is Phylomer "framework". It is potentially as valuable (if not more valuable) than the antibody framework.


Then, we have the "clinical evidence":


- We have a number of drug targets in inflammation. This is a complex area of human biochemistry with a number of disease states that are not currently drugable. There are even speculations that some wider disease states (Parkinson's, for example) are chronic inflammation states. Hence, drug candidates, here, are very valuable. I don't think it untoward to talk of at least two potential "blockbuster" drugs being pursued in inflammation.


- I am fascinated by the neurological compounds. Mediating cell death and triggering cell hibernation is very very important as a new class of drug. To have one lead candidate would be remarkable - but we seem to have more than one. What is a blockbuster drug in a completely new drug class worth?


- The most advanced drug candidate is the burns/wound healing drug. This is a vast market and the drug is topically delivered. So, if there was a drug to take to an advanced stage at low cost - this is probably it. It may even be possible to market this as a bandage type - a medical device - where limited clinical claims can be made without the FDA process.


I suspect that the framework, alone, was sufficient to transact the company. However, filling up the clinical pipeline with such impressive development programmes puts the company valuation into a completely different league.


The company benchmarked a value at the $400million level. However, I speculate that a feasible valuation is much much higher. I can convince myself that US$1billion could be a minimum.


This is quite remarkable - given that it is such a small team. However, it comes back to the framework. The point of leverage, being applied, is 3billion years of evolution ...


Opes prime shorting the stock has driven it down to an insane level. Modest development money has been raised at 25cents per share. These resources have been applied in a wonderfully creative manner - there should be immediate dividends payable to holders in terms of the share price - at least 50cents per share is not unreasonable. Upon completion of the "clinical proof" - Harry's 10-20x uplift should apply to the baseline 50cents. Yes, $5 -$10 dollars per share ...


I look at alot of companies. Phylogica attracted me, some time ago, as being a drug platform that could be more effective than antibodies at costs and complexity, significantly less. I won't go on and on ...


I hold and am accumulating. I have modest resources - so there is room for all to take a position in this stock according to their inclination and means ...

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Intersuisse have updated their analysis:




Not an entirely glowing review - suggest that the optimal value for the company required them to have been sold, by now.


However, I think the analysis overlooks the Opes Prime issues.


I would be very pleased if we could remain as shareholders, in this company, with a number of iindustry collaborations rather than outright sale as our objective. However, with recent tactical focus - I'd suggest that the company is being primed for sale http://www.sharescene.com/html/emoticons/sad.gif


My view on the framework technology is much more bullish than Intersuisse. Personally, I would consider it a tragedy to dispose of the company in the $400million bracket. My view is that Phylogica is more significant than Domantis or Adnexus, for example.


The PepTech/Evogenix saga really demonstrates the differences between the Aussie and the US capital markets. Hopefully this is not the model for Phylogica ...

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  • 1 month later...

The presentation is something they should be releasing for general consumption. Why are they hiding it?


This workshop at the end would've been interesting.


Although the Chairman released some PR some time ago talking about $400m, we have to be real here and say since there has been no observable accumulation of stock going on, there is little chance of a takeover bid arriving in the mail for anything like that.


I still favour the RTO and cornerstone taken in the new company and PYC's IP will be given away as part of some bargain struck off the ball, out of sight and behind closed doors. After all isn't that what venture capitalists do?



Panel Discussion: Strategies and Drivers of Mergers & Acquisitions in the Antibody Alternative Space

In this panel, hear industry experts discuss:

The qualities of a protein scaffold company which led, or will lead to, a successful merger or corporate deal with big Pharma or big Biotech.

Does it make good business sense to build a company with a primary objective to sell to big Pharma or big Biotech? Is this a viable exit strategy or a flawed business strategy?

What motivates a company to acquire or be acquired?


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  • 2 weeks later...

Paul's latest presentation is up on the web site:




Very impressive ... lots of new data from the antibacterial and anti-inflammation work. Looks like the Phylomers are highly active even without any processing stages once the basic effective shape has been identified.


There can now be now doubt as to the value of the approach. I suppose the only real questions is "What is the price?".

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QUOTE (Enumerate @ Monday 11/08/08 03:32pm)

I have been thinking "Why not announce the updated data to the stock exchange?" (the new information contained in Paul's latest presentation).


In terms of "pieces of the puzzle" or "ticks in the box" - it looks like the recent RA work has produced very positive data on the three elements of the RA pathogenesis detailed in the presentation.


I would suggest that this is the "very significant challenge" that Paul Watt alluded to - from the big pharma partner.


Further, I would suggest that it is "mission accomplished" - in term of the pre-clinical results.


Getting back to my question - I would suggest, based on this information, that an RA deal is probably being negotiated, as we speak.


I would speculate that this potential deal could be a true "blockbuster" - possibly a large development payment with license and royalty payments. It would not be untoward to have a deal of this magnitude worth $1billion! ("biotech" dollars, of course).


Given that the Phylomer platform technology can possibly generate a number of blockbusters across a number of disease states - this would put the company "in play", for a pharma takeover.


Given that the value of the platform has been strongly indicated by recent results - I think it is time to consider some of the "blue sky" possibilities.

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I have been thinking "Why not announce the updated data to the stock exchange?" (the new information contained in Paul's latest presentation).


I would say its because AvR doesn't really care about keeping the market informed before it is to do with anything else.


In Feb. PYC put out a statement that valued this at about $400m and quoted purchases by BMS and Amgen in the same field.


It's rumoured that Amgen is to be bought out by PFE and GILD by Merck. Roche have taken out Genentech or soon will at least. They're the big three of bio-pharma.


PYC have a PFE old boy on the board but its safe to say they won't be interested if they will have their own diamond mine when they take out Amgen.


The other pharma represented on the board is European. That's AvR's history. His Inventages fund is Swiss in origin too.


Perhaps we will see a European take it out. Novartis and Roche seem to be the leaders in this field.


Might be dependent on Genentech being completed successfully though.

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