Protherics Share Discussion Threads

[bargainbob] 25/9/2008 20:28

V IS THE BIG DEAL AT btg. We should be close after 10 years of hard toil.
Thats why I FEEL WE ARE GIVING A LOT AWAY. Nothing I have read about PTI comes close except more phase 2 risk.

[baronet 1] 25/9/2008 19:44

bargainbob --- I have a great deal of suspicion with Unvalidated users but maybe you might like to comment on the following post with regards to BTG, which I thought was a fairly good post from another BB. I look forward to your comments.


######

BTG lurker here. Perhaps I can contribute re BTG's current financial position.

Although now describing itself as an R&D company BTG is in fact an Intelectual Property company, they still own nothing except their patents. It's Louis Makin's long/er term plan to change BTG into a pharmaceutical company with probably it's own sales force. That should set some bells ringing!

Headline profits were inflated last results. When BTG CEO Louis Makin was appointed 2004 she set about changing BTG and almost everything 'non-medical' was put up for sale. Also staff were cut to reduce costs. A lot of one-off revenue from sales came in last year that won't be repeated. The reality is the BTG's underlying business on a royalties less costs less R&D basis was about break even last year (£24.9m royalties less £16m costs less £10m R&D). Royalties should rise this year to approx £30m.

The £24.9m is recurring royalties on licensed and marketed products, that is they recur every year and have never failed to grow every year (even if only by a little). You'll know about the effect of the $ recently. Other payments are milestones of variable size of course and/or litigation success (none pending).

Newer products were to be developed further before licensing to increase royalty rates. These changes were made because of BTG's past poor performance. BTG have one major product kept in house, Varisolve, entering FDA pIII trials early next year, approval 2011, there is a lot of debate as to wether or not this product will prove successful. BTG have not made clear whether or not Varisolve will be licensed or marketed by BTG via a jv of some kind. Target, USA.

BTG's royalty rates for individual products are not known, only an average is given for the whole portfolio. Also BTG receive gross royalties and an average (usually approx 40%) is shared with whoever/wherever the tech came from. BTG end up with a mere 2-3% net royalties on sales. This low rate is because in the past products were often licensed at the pre-clinical stage.

Crucial to BTG is a product called Benefix. Last results......

'Gross recurring royalty revenues were slightly higher than in the previous year at £42.4m'

After sharing that left BTG with that £24.9m net royalties.

'BeneFIX®, the treatment for haemophilia B marketed by Wyeth, performed well and contributed gross revenues of £16.9m'

As the individual royalty percentage for Benefix is not known, all I can say is Benefix's £16.9m equates to 40% of BTG's gross royalties of £42.2m. So BTG had a problem looming regarding royalties as the Benefix patents expire 2010/11 and there was nothing in-house that could possibly make up the shortfall.

Enter PTI with CroFab and Digifab revenues doubling in 2010. Also Voraxaze is due for FDA approval 2010 is it not? BTG can offer TRX4 due FDA approval in Diabetes 1 Autumn 2010 (five other indications may follow), Abiraterone, Prostate Cancer 2011and Campath, MS 2012. These three look very promising even with the low royalties. Plus Varisolve.

Whatever you may think of it, with the CytoFab potential, this deal looks better for BTG than PTI to me at least in the shorter term. The big unknown here is non-partnered Varisolve, the annual market is $500m pa according to BTG. If licensed royalties might be 20-25%.

It would seem LM is intent on reducing PTI's losses and making the merged companies break even by say 2010. After that, growth.

Edison have released a short note on BTG re the merger, registration is free quick and easy.



Hope that helps a little.


######


JB

[mark30] 25/9/2008 19:31

Don't GIVE this away !

[mre] 25/9/2008 19:10

bargainbob, given that the BTG/PTI prices are now in sync with the offer price it appears to me that this is reckoned to be a done deal. The high R&D is what's creating the PTI losses and the new combined company has a plan to reduce that. I think it's now more likely that someone will come in for BTG/PTI combined at sometime in the near future. But who knows?

[bargainbob] 25/9/2008 19:00

Hope someone else comes in for PTI( AS a BTG shareholder) this looks like a bad deal.

Big losses , high R & D and will set BTG back two years. Very poor deal IMHO.

[mre] 25/9/2008 18:43

The PTI share price is now around 45p compared with around 30p before the news was announced on "approaches from a number of parties". So have we really got that much to complain about? Of course 45p may not be the bottom but the BTG share price would have to be around 100p before PTI holders are back to square one.

Just a thought to cheer up any PTI holders feeling a bit let down (like me!).

[gnnmartin] 25/9/2008 13:58

I reluctantly sold my PTI shares. The problem I see with the BTG bid is that BTG rose from about 85p to 240p in the 6 months to September. While the rise would look justified on fundamentals in normal market conditions, in the current turmoil BTG looked ripe for a setback, and the bid for PTI seems to be the trigger. I guess BTG has been weak since the bid because big PTI shareholders have been selling BTG short to lock in their gain. The two shares look to be trading roughly in line with the proposed scheme at the moment. Any further weakness in BTG relative to PTI might imply a competing interest. The next few weeks up to the 10th Nov. could prove turbulent.
Nigel Martin
PS. the merger reflects the ratio of the share prices of PTI and BTG at their recent lows, so looks fair to PTI and is good news for anyone who was not hoping for a cash bid. If the market does drive the combined company down to their lows again, they will be a screaming buy for anyone who (unlike me) has money to invest. But that goes for a number of companies at the moment.

[gazza] 24/9/2008 20:57

Devbod, thanks for the response, sounds a sensible ploy to me.

[devbod] 24/9/2008 13:06

The p of 0.3 was stretching a bit but the rest sounded promising. PE is both common and deadly so would be lucrative. There is a lack of effective treatment so the bar should be reasonably low for approval as well.

[red ninja] 24/9/2008 12:56

The pre-eclampsia update sounds more positive, but its hard to tell
wether it amounts to anything....

[mre] 24/9/2008 11:08

mf, click on "Research Update" under "News" in the header of this thread.

[martinfrench] 24/9/2008 11:06

can someone post the link?

[devbod] 24/9/2008 09:41

Interesting also that this mornings news has had no effect on the share price A pre-eclampsia treatment will be worth serious money and todays news puts that back in play.

[devbod] 24/9/2008 09:19

I wondered about someone coming out with an all cash spoiler for the deal but the PTI share price has been trading lower than the 0.291 multiple would suggest implying there is concern the deal may not happen at all.

[fhmktg] 24/9/2008 08:29

Encouraging news on DigiFab, but too late to mareially affect the outcome of the BCG bid, unless it smokes out a counterbid in the next few weeks.
The decrease in the BCG share price doesn't bode well and I hope Heath a co have a renegotiation position in place ( doubt it in reality)
A sorry tale all round unless either AZN or GSK come forward.

[cortez] 23/9/2008 21:36

Baronet 1

I don't understand why PTI want to manufacture CytoFab themselves. Considering they get 20% of royalties on net sales, why not leave manufacturing to AstraZenica's discression? Surely AZ have the experience re FDA requirements.

Any idea what year CytoFab may be approved?

[cortez] 23/9/2008 12:26

Baronet 1, thank you.

[devbod] 23/9/2008 10:36

Simple. Multiply the BTG buy price by 0.291 and compare it with the Protherics price and buy the lower one :)

[gazza] 23/9/2008 10:31

Another question:

If you believe that the takeover will go ahead, and that the combined company will be a good investment, which shares should you buy right now - BTG or Protherics?

Gazza.

[baronet 1] 23/9/2008 10:07

Cortez ---

Firstly I would refer you to the following albeit somewhat dated Nov 2006 ...


The Investment Column: Cookson recovery story is still priced at a discount

Protherics

Edited by Michael Jivkov
Wednesday, 8 November 2006

Protherics

Our view: Buy

Share price: 65p (-16.25p)

For the second time in a week Protherics has suffered a delay in the development of one of its drugs. Yesterday, it warned the City that US approval for its Voraxaze treatment is likely to come a year later than expected. Unsurprisingly, shares in the biotech plunged following the announcement.

Voraxaze is aimed at treating the kidney failure some patients suffer when undergoing certain types of cancer therapy. Protherics has been forced to withdraw a US licence request for the drug after the US Food and Drug Administration demanded additional manufacturing data. It now plans to re-submit the application next year and hopes to get the green light from the authorities in the second half of 2008, rather than the second half of 2007.

Last week, the group's CytoFab treatment was hit by a similar setback. AstraZeneca, Protherics' partner, said it would have to run an additional mid-stage study of the product, which counters blood poisoning, after discussions with regulators in the US and Europe.

It seems that both CytoFab and Voraxaze have been delayed for addressable reasons and not because they do not work or are dangerous, as is sometimes the case with medicines still in development. As a result, investors should use the recent weakness in Protherics stock as a buying opportunity. The company is among the most well-financed in the biotechnology sector. It enjoys about £20m a year in revenues and has a strong cash position with over £25m in the bank.

Via CytoFab, it and AstraZeneca pretty much have the sepsis market to themselves. Analysts estimate it is worth up to £4bn. Given the size of this opportunity and its solid finances, Protherics' current £167m market capitalisation seems far too modest.





Secondly and a much more interesting read if you have not seen it and I would refer you to the last paragraph. I have shortened the RNS ......

RNS Number:9684N
Protherics PLC
14 February 2008


Protherics PLC


Interim Management Statement


VoraxazeTM - methotrexate intoxication following high dose methotrexate therapy

Protherics is preparing to start the small pharmacokinetic study to address the
interaction of VoraxazeTM with leucovorin agreed with the FDA. The additional
manufacturing work requested by the FDA to support a VoraxazeTM marketing
application in the US is ongoing and Protherics is working with its contract
manufacturer in preparation for an FDA pre-approval inspection. Protherics is
on-track to start its Biological Licensing Application for Voraxaze in the US ona rolling submission basis starting in Q2 2008.

Protherics has recently had feedback from the EMEA that the VoraxazeTM
interaction study agreed with the FDA will, in principle, support resubmission
of the marketing application in the EU. The EMEA has however requested a
preclinical study to demonstrate that VoraxazeTM reduces methotrexate (MTX)
toxicity. As there is no preclinical model of the delayed elimination of MTX
seen in patients this request presents a significant technical challenge and
Protherics is currently exploring the feasibility of undertaking such a study.
Protherics will indicate to the EMEA that it will not proceed with a marketing
application for VoraxazeTM in Europe if it is unable to undertake this study.

Protherics is pleased to see continued strong growth in the use of VoraxazeTM inthe US under the Treatment Protocol with cost recovery and on a named patient
basis outside of the US.




My own personal view is that yes, Voraxaze will get to market and will be a very big earner But that's my own personal view and I am not a Bio Chemist.

JB

[cortez] 22/9/2008 22:39

Baronet 1

Thanks, yes, I saw that, i was just wondering about the delay/s.

[baronet 1] 22/9/2008 22:31

Cortez




JB

[cortez] 22/9/2008 22:07

BTG holder here just making a start on Protherics. Of course I know nothing yet, but do holders here still think Voraxaze wil be approved? (both EU and USA)

[golly1980] 22/9/2008 20:12

I wonder how many of us have a merry christmas!!!!