Media speculation suggests PRR is a stock to hold.
Prima BioMed (PRR) 0.9c
CRITERION: Tim Boreham | March 12, 2009
Article from: The Australian
FROM the miracles-do-happen file comes this provident yarn of a $3.4 million market cap tiddler that has secured $12 million of funding for further development of its ovarian cancer drug, CVac.
A day traders' favourite, Prima had been close to biting the dust, with a mere $750,000 in the bank and no major holder to tap.
Investment bank Fortrend Securities has filled the breach with an equity facility. Details are scarce, but the funds can be drawn down at Prima's discretion over the next three years based on the prevailing share price. For Prima's 1500 investors this means that unless the share price improves lickety-split, they'll get a heavily diluted share of the spoils.
As Prima CEO Martin Rogers argues, that's better than holding 100 per cent of an entity that was likely to have "gone to dust" without the funding. He adds that retail holders could have provided funding via a share-purchase plan, but the take-up was underwhelming.
The CVac vaccine -- targeted for cancers with a high morbidity rate -- offers an entree into a wider ovarian cancer market worth $US2.1 billion ($3.27 billion) annually (biotech PR 101: spruik the billion-dollar size of the existing potential market).
Prima's earlier trials resulted in four out of 21 patients (19 per cent) responding to the treatment. While this doesn't sound like a brilliant rate, we're talking about very sick patients.
The next step is an FDA-approved phase2b/3 trial. The submission paperwork alone costs $US135,000, but Rogers expects the $12 million to be more than enough to get to registration stage.
Biotech Daily analyst Marc Sinatra gave up on Prima "many moons ago". He says that while the facility isn't ideal, it's not "death spiral" financing such as resetting secured convertible notes. "This deal demonstrates there's a little bit of capital around for less than perfect or higher risk assets," he says.
Criterion rates Prima a hold. The stock is also good for speculative fun, as it's subject to violent intraday fluctuations.
Prima boasts a bankable signature in the guise of Gardasil (cervical cancer vaccine) hero Ian Frazer, who heads the scientific committee.
source:
http://www.theaustralian.news.com.au/story/0,25197,25173368-23634,00.html