I have recently had discussions with a number of shareholders about the upcoming Bioasis roadshows. I think the biggest question I'm getting is whether I expect news to come out before the sessions occur. Short answer? I have no idea and I'm not holding my breath.
I think the Eastern roadshow is imminent and unless there is news today or early tomorrow then there won't be anything new to discuss there. If news comes out after the eastern roadshow and before the western version then that would be odd. It would literally mean that the eastern roadshow was worthless.
I raise this because Bioasis over the past many weeks has been sending some signals that news generated through Ladenburg Thalmann could be imminent. There has also an emphasis being put on xB3-001. Any news in which Ladenburg Thalmann may be a participant will not be strictly scientific or R&D news.
Ladenburg Thalmann is involved in M&A deals, strategic opportunities and equity positions in their clients' companies. Basically, if Ladenburg Thalmann is involved then Bioasis is selling a piece or all of itself to get the science advanced and to make some shareholders happy. It would be sad if Bioasis considers xB3 to have insufficient value such that they could not make deals unless the company is sold, in whole or in part. So, does Bioasis believe in xB3? Can Bioasis get deals done without chopping off The Golden Goose's wings?
Of course, there are many questions that can be asked. What about the various partner programs. Is Prothena doing anything? Did they decline their options as of July 31, 2021? After two years, where is Chiesi? Have they done anything? Aposense? Oxyrane? Where are they? I wouldn't expect anything yet from Janssen or Neuramedy, but these other partners have generated zero news. It's pretty much time that somebody, meaning Bioasis, should report something about the approaches to IND submissions that we all believe should be the outcomes of these collaborations. Any progress? At all?
The problem, of course, is that secrecy hides nothing. If Prothena is doing nothing, and if that is not acknowledged by Bioasis, then Bioasis is using secrecy to hide that "nothing." If the large pharma, GABA-a and any of the other announced collaborations and initiatives have gone nowhere, and if Bioasis is not reporting it, then Bioasis is using secrecy to hide these nothings. Why? How?
The how is easy. Early-stage partnerships are not usually terminated. They can go on forever, but the problem for shareholders is that if no work is being done, and if the agreements are not formally terminated, then both companies can claim that the agreements are still in place, which is legally true. But they may not be doing any work and may have no expectations of doing any.
So the why is obvious. Reporting "nothing" can result in investors believing that work is still being done under the agreements, or that partners are considering what they might do with the results of work that has been done. This is a classic case of letting investors make up their own stories that fit their expectations. Maybe Bioasis, not known for its great respect for shareholders, is using secrecy to cause shareholders think what they want, and what Bioasis wants them to think.
This is what I mean when I say that secrecy hides nothing. Besides hiding what the partners may be doing, secrecy can also hide that fact that nothing is being done and that there are no prospects that anything will ever get done under at least some of those agreements.
I think Bioasis needs to add some clarity to investor understanding of these agreements. On a case by case basis, does Bioasis have any expectations of advancement of these programs? Even a "We're not sure" answer would tell investors that not even Bioasis knows what the partner is doing so that the investor could then reduce expectations from that agreement.
With agreements that do not appear to be advancing, the question should be asked about whether xB3 performed in a manner consistent with investor expectations? Did xB3 fail in some way, did it cause problems, or did the payload fail? You'll likely get no answer about the payload. Was xB3 a cause of the agreement dying? That can be answered. Does xB3 work? Can we continue to have faith in the capabilities of xB3? If xB3 is OK then where do the problems lie? It could have been the payloads, or the partners may have decided that the project was not being advanced for commercial or other reasons. There is information that Bioasis could provide about the xB3 Platform that would not break nondisclosure agreements. It is an obligation of management to protect the value of the technology with empirical information, and with subjective assessments if supported by empirical results.
Further questions relate to xB3 taking payloads off target in the CNS due to the large number of LRP-1 receptors on normal brain cells. Has that caused problems? Are there workarounds? (I have a post coming on that subject.)
A year ago Bioasis announced that it had entered a "
convertible security funding agreement" of up to C$10,000,000 with The Lind Partners. A few days later
Bioasis announced that it had closed an initial funding of C$3,000,000 under the agreement. Is the remainder of the Lind funding still available to Bioasis?
As the initial "Lind" press release stated, has Bioasis used that funding to "to leverage its existing research in lysosomal dysfunction, neurodegeneration and neuroinflammation." Has any of that work been done? Was any progranulin work done to replace work that was lost? It's been a year since Bioasis had access to that money and the question for me is, has Bioasis done any scientific work with that money?
The annual report at the end of this month may hint at answers, as will the Q1 report due at the end of July, but it's not enough. Has that money been used to advance internal programs? Have CROs been contracted to do work? Have partners been contracted to do work? Has the Lind money been used for scientific work?
Here's a question to ask yourselves, not Bioasis. Watch for the answer. Are the roadshows touting "there's lots to come" to mitigate issues relating to not-so-great financial reports, little advancement of internal programs and disappearing agreements?
It's time for an accounting of where this company is at. Better assurances of progress, if that progress is real, ought to be given and they ought to be given now. These roadshows should NOT be used to create understanding and empathy for the purpose of giving Bioasis another 3 or 6 months of shareholder peace if there is no news of anything substantive. These roadshows should NOT be used to take Bioasis peacefully beyond the next AGM and provide job security for the current management.
Shareholders understand that Bioasis does not have much control over its own story. They understand that partners won't reveal anything they don't want to reveal, not even to Bioasis, whether that information is covered by nondisclosure agreements or not. But on the other hand, I don't think investors are too interested in hearing, "We think 2022 is going to be a great year," and "Things are going very well with our partners."
Investors need better understanding of Bioasis. Now! The lack of knowledge and understanding of Bioasis is the cause of lost confidence in the company, and the cause of the twenty-cent share price. In the end, it will be the cause of a needless sell-cheap deal orchestrated by Ladenburg Thalmann with the help of some impatient shareholders.
xB3 either works or it does not. If it works then the value of Bioasis should be able to approach what Denali is worth. There is no middle ground, let alone cheap ground, something that could be on the way with an easy way out via "strategic opportunities."
Ask the hard questions. Demand answers. Are the roadshows being held to mitigate something unsavoury, or to explain why nothing happening is still OK? Maybe they're being held to celebrate something great, but I don't have a lot of confidence in that.
And remember, roadshows are public events. There can be no selective disclosure. Everything you hear can be publicly revealed. Too many people think the company is giving them just a little bit more than others get, the inside story on something. Even a hint of that suggests a willingness on the part of the company to be less than candid, perhaps even to be dishonest. All companies must be judged harshly if they do that because it means there likely are reasons for misplaced disclosures, reasons that are often far more valuable to know than the disclosures themselves..
In the end, xB3 should produce value for shareholders. Big value. Is Bioasis on the way to that or not?
jd
ps: I apologize for the length. It just grew and I didn't have the time to cut it back. The points I wanted to make are there, generally. There are so many questions.