Scotia update Scotia has laid out the bet in clear terms. If PLI can raise $75M from the voucher/partnering deals, between now and the end of the year then there will be considerable upside. This period could be extended by another 3 months if Thomvest provides another loan of $25-30M.
If on the other hand, PLI fails to raise this money, another financing will be required, likely well below today' s sp.
FDA decison on the PDUFA date will be an important event as it will give some idea of the timing of PLI receiving the voucher. Granting of INDs for both the IPF and DKD trials will also be important in finalising partnership deals as the regulatory pathway will be clear. The AS data has come at a timely point as this should embellish discussions on a DKD deal.
So what's it going to be? I'm betting PLI closes a couple of deals and receives the voucher in sufficient time to contribute to the cash runway until PLI is cashflow positive in 2018.
So who is expecting PLI to fail and be forced to do another heart breaking financing?
From Scotia
ProMetic Life Sciences Inc.
PBI-4050 Benefits in Alstrom Sustained Through 36 Weeks
OUR TAKE: Today's Alstrom data is important from a potential partnering standpoint, in
our opinion, as we believe it adds to the evidence that PBI-4050 is safe and beneficial in
patients suffering from fibrotic diseases. However, given the status of the balance sheet
(funding into Q2 2018) we expect the market's reaction to be muted as investors wait
to see how management resolves its funding gap. We maintain our Sector Outperform
rating as the stock appears undervalued at current price levels, even with a $75M equity
raise assumed in Q1 2018 (to be conservative), and note that non-dilutive financing
through partnering or sale of a priority review voucher (assuming it is received in time)
could provide upside to our outlook. Maintain Sector Outperform and $3.50 price target.
Updated Alstrom Data: PLI announced data from 8 Alstrom patients who have been
treated with PBI-4050 for 36 weeks. In the 8 patients, liver stiffness measured by
FibroScan declined 31% from a baseline average of 8.5 kPa to 5.8 kPa at 36 weeks, p
= 0.0098. In addition, data from 9 patients at 24 weeks of treatment show a statistically
significant decline in biomarkers of kidney damage. We believe this data to be further
evidence that PBI-4050 has a beneficial impact on Alstrom patients. In addition, we
believe this data may be an additional trigger that moves potential partners closer to
signing a deal for PBI-4050.
Trial Extended: After reviewing the data, the Data Safety Monitoring Board (DSMB)and
the Medicines and Healthcare products Regulatory Agency (MHRA) in the UK have
granted 2 successive extensions of duration of treatment from the original 24 week
study to 72 weeks to ensure patients can remain on treatment while a protocol
extension is reviewed. The extension would allow patients to remain on study for
96 weeks or until regulatory approval is obtained in the UK. We view this as further
evidence of benefit to patients as we do not believe the DSMB or MHRA would grant
these extensions if they did not believe patients were benefiting from treatment.
Balance Sheet Options: PLI's funding situation remains the focus of the market. Our
forecasts call for PLI's cash position to be sufficient to fund operations into Q2 2018 and
for breakeven to occur in early 2019 when we forecast IVIG to be launched. As a result,
we believe a funding gap of ~$75M exists. Options on the table include partnering
opportunities with upfront payments, the potential sale of the PRV we expect to be
granted with the plasminogen approval (although if the approval is pushed into 2018 as
it now appears the timelines to monetize this asset would be tight), and debt or equity
funding. To be conservative with our valuation we assume PLI issues $75M of equity
in Q1 2018 but note that non-dilutive financing for all or part of the company's cash
requirements would provide upside to our outlook.