Neuropharm Share Discussion Threads

[ihavenoclue] 19/10/2009 16:12

Sold some more this lunch time and bought into EOG ... wooohooo ... loss gone in no time flat :-)

[arc2006] 19/10/2009 13:35

Nothing has changed here IMHO. We're still waiting for news of the JV. If anyone investing in NPH didn't realise the timeascales regarding the duration of the new Phase 3 then you didn't do your research properly and you shouldn' have needed to IC to tell you. The key factors are the techncial reasons for the initial failure and the potential going forward. Both are reasons to invest IMHO with the cash pile giving a large element of safety in the short to medium term

[quinan] 19/10/2009 13:01

Very very disappointed I thought the results were very positive about NPH future although the JV maybe a little further down the line. In general the company will have something to offer within 12 months maybe this is to long to wait for the market hence the downward pressure.

Even so there will be support, currently we are now below cash value so any further weakens will make this more tempting

[geng] 19/10/2009 12:46

Seriously thinking of dumping now - really looks like it's just going to drift down and down.

[the_beagle] 19/10/2009 07:52

See 2364 and 2365!!!!!!!!!!!!!!!!!

[ihavenoclue] 19/10/2009 07:41

Sold half here the other day and bought into NTOG at 0.62p ... it was TOO much of a screaming buy ... not exactly regretting that decision so far ...

[quinan] 16/10/2009 15:22

The one thing have learnt in all my years of playing the market is never trust the share mags. They have 100s stocks to comment on each week can they really look at the back grown of the company and give a detailed report NO they can't they pick out bits and bobs to put in for the week, just as they do when they tip a company. But when you buy in on their recommendation the next week the company is back to square one and you are down 25% or more. Best thing to do is scan over the stocks then look into the company's on a more in-depth research then make your mind up.

IMHO NPH has a lot to offer it has been written off by the market which is valuing the company at cash levels, but as we have seen in the results they have a lot more to offer and it would not surprise me if they are taken out before the first product comes to market.

[fairdeal2008] 15/10/2009 16:24

Oh and don't forget there are other elements that we havent considered eg:

1. grant funding for programmes (they noted they are submitting grant applications in the rns)

2. progress from other research activities which will be rnsable including:

[fairdeal2008] 15/10/2009 15:44

Which as a contrarian is why I started buying - because most investors probably wouldnt see a reason. If you did, it would be priced in.

My judgement is that (from the language they have used in the rns) that there are alternative options on the table for NPL 2008.

Here is the quote from the prelims rns (my comments underneath):

-------

'As we do not currently have the financial resources to carry out a further Phase
III study we have put further project expenditure on NPL-2008 on hold whilst we
assess the funding alternatives.'

Notice 'the funding alternatives' - ie they exist. Otherwise they would have said 'potential funding alternatives'. Remember per May 2009 rns there were various interested parties.

RNS carries on:

'Discussions are ongoing regarding potential collaboration on the further development and commercialisation of the product,
after initial exclusive negotiations on a North American deal were terminated. '

Here the use of 'potential' means the final partner has not been agreed. They had one 'exclusive' third party and talks were terminated. Not confirmed by whom but could have been Neuropharm themselves. Evidently other potential partners now in the frame.

-------

They are concentrating their cash pile on wider business development which is a correct way to proceed. And they have some existing and new products to push forward.

But the real umph will come from an NPL 2008 partner and that could happen at any time.

It could also be funded by one of the large US Charities (didn't Autism Speaks have a $75mn grant programme last year).

Now I would not want to have my house on this but my accumulation today is only a small percentage of my portfolio, but if I am right (and I may not be) it will be worth a lot lot more.

imho

[pork belly] 15/10/2009 12:56

It would cost 5m to re-do the phase 3 trial for NPL-2008. NPH do not have the money hence looking for a partner to fund the trials.

IC have said that it could take atleast 2 years for the next phase 3 to be completed (IF they find a partner willing to fund it) and the other 2 new products could also take 2 years to come to market.

The only news that could create some upside is if they announce a partner. Considering the North American partner talks failed recently it doesn't look like it will be any time soon.

The simple fact is that there appears to be no imminent good news while,at the same time, they continue to eat into their already dwindling cash.

At the moment there is only downside pressure here. It has been as low as 5p in the past 12 months and has far more downside than upside right now.

I simply cannot see a single reason to buy right now and can only see rumours of a partner rekindling interest here.

[fairdeal2008] 15/10/2009 10:46

Cost reduction strategies take time to take effect. My guess is cash burn is around £200 to 250k core operational costs and the rest depends on what they implement by way of variable R&D.

Their portfolio of products are exceptional and NPL 2008 was unfortunate but they seem to be comfortable it is back on track technically.

Sensibly that have halted costs on NPL 2008 until they find a partner to fund development. Note the words from the prelims re NPL 2008 ' assess the funding alternatives'...


In other words, they have alternatives. I think they could surprise us with an RNS re how NPL 2008 will be funded going forward.

In the interim they have the rest of the portfolio moving forward and enough cash to progress this through next financial year.

It was right that this pulled back from the high thirties a few weeks ago, but now I believe this is primed and ready to go. IMHO

and 8T re comments - my standard approach is to buy 50% of a position upfront and then add as the price rises, I then sell 50% when I think its gone high enough, or 75% if it really has become overvalued.

Good enough for me to be honest.

[induna123] 15/10/2009 10:20

And you know what that means?

cap in hand to shareholders.

[pork belly] 15/10/2009 10:08

fairdeal,

its very close to the mark based on currently available facts.

they had 10.2m on 31 dec 08 and 7m on 30 jun 09.

their NPL-2008 trial failed to meet its primary endpoint on 18 feb 09 and put it on hold and " Following the results of the SOFIA study, we have implemented a cost reduction programme to preserve cash pending decisions on future strategy.".

So the cost cutting has been in effect since 18 feb 09 meaning normal cash burn only occurred for 6 weeks and, for the remaining period to 30 jun, the cost cutting was proceeding.

Therefore, 4.5 months of the period of 31 dec 08 (10.2m cash) to 30 jun 09 (7m cash) HAS taken into account the cost cutting programme.

On that ratio then the true post cost cutting cash burn is around 400k per month (4.5/6 x 3.2m)

So its still burning atleast 400k/month taking this into account.

[fairdeal2008] 15/10/2009 09:52

Pork belly that is wrong.

Cash burn in the first half of the year included npl2008 programme costs and since then in addition they have reduced general cash burn.

Therefore burn is not the 500k you suggest. imho

[pork belly] 15/10/2009 09:48

NPH had 10.1m cash at 31 dec 08 and 7m cash at 30 jun 09 (23p cash per share).

That was 3.5 months ago.

They are clearly burning 500k/month so currently have around 1.75m less cash, ie they now have around 5.25m (worth around 17p per share)and dwindling by around 500k per month.

Have to agree with IC's comment (even though they are wrong most of the time).

[induna123] 15/10/2009 09:46

That IC article is a bit brutal. I was thinking of getting back in but that has put me off.

[21simthy] 15/10/2009 09:42

You bought 25k FD and you instantly start ramping it on many other threads !

If you were building a position you would not be "highlighting" this everywhere, you would be saying as little as possible !

[fairdeal2008] 15/10/2009 09:34

Good to see this moving.

[pork belly] 15/10/2009 09:33

INVESTORS CHRONIVCLE
05 OCT 09

NEUROPHARM (NPH)
ORD PRICE: 25p MARKET VALUE: £ 7.7m
TOUCH: 22-27p 12-MONTH HIGH: 155p LOW: 5p
DIVIDEND YIELD: NIL PE RATIO: NA
NET ASSET VALUE: 23p CASH: £7m

Neuropharm pins hopes on new products

Neuropharm's share price plunged in February 2009 when it announced the apparent failure of a final-stage phase III trail for an autism treatment. However, Neuropharm has not given up hope.

The recent trial results showed that repetitive behaviours (a common problem in autism) were reduced by Neuropharm's NPL-2008 drug. The problem was that the same was true of a placebo. The placebo effect did not show up in two previous trials and Neuropharm thinks the low doses used in the recent test could be the reason for the result.

So Neuropharm is keen to rerun the trial, but it could cost about £5m and the company's cash reserves are modest. So far the hunt for a co-promoter or joint-venture partner has not borne fruit, and hopes of a deal by the autumn are slipping away.

Neuropharm doesn't have much in its locker to compare with NPL-2008, but it has flagged up two products that it believes it can fund. First of all there is NPL-2510, a test for autism which produces results in a week compared with up to two years using the current method. The other product, NPI-2505, is a fast-melt tablet that dissolves on the tongue in less than five seconds.

SHARE TIP UPDATE:

Sell

It could take at least two years for a new phase III trial to complete and for the other products to come to market. Given the current level of losses compared with the increasingly meagre cash pile that's a worrying timeframe. Sell

[fairdeal2008] 15/10/2009 08:04

Bought 25k this morning as a start of rebuilding my position.

Rationale:

1. share price retracement probably complete imho

2. the company may be pretty attrocious from a PR perspective but they still have an attractive stable of products

3. cash probably 6.5mn, mkt cap 6.5mn - product portfolio valued at nothing which is patently ridiculous

4. if the company announce the levels of diet coke in the directors' fridge it seems the market will rerate them (PYM and OXB - very good examples of what will happen here on good news)

5. I have reread the rns and I believe it is pretty hopelessly crafted and doesnt actually portray well what is going on (will explain later but I suspect they may be a lot closer to a deal than we think).

imho

[lombiff] 14/10/2009 16:35

ihnc - I guess the RNSs may be automatically generated - as you know, the Barclays holding is as nominees, so it's just PIs buying and selling, taking them below and then above the threshold (100K or so either way).

I haven't sold a single share yet, and my holding is part of the Barclays number. I'm happy to sit tight with what I have - I probably would have bought another 50K or so during the spike down to the teens last week, but was overseas so missed the opportunity. Will certainly buy more if they dip into teens again, though I suspect the "hot" money has been flushed out now, so I expect we'll flatline a little until the next news.

[ihavenoclue] 14/10/2009 16:22

Very strange holdings announcements ... 16:10 Barclays from 5% down to less than notifiable .. 1 min later Barclays from less than Notifiable to 5%

Question :- Was it worth issuing the RNS's ?