PAA 2.78% 3.7¢ pharmaust limited

Was the recent announcement worth releasing?

  1. 32 Posts.
    Firstly, for full disclosure purposes, I was a medium-term holder of PAA (since May 2014) who sold out yesterday at $0.01. My entry point was also $0.01 leaving me with a net loss of brokerage fees. The recent announcement by PAA precipitated my exit. I sold out not because of any doubts concerning the company's future endeavours but because a share price rise from $0.006 to $0.01 on (arguably) irrelevant news was too good to pass up on.

    As alluded to in an earlier post, I have issues with the recent announcement: -
    1) The announcement reported incidental observations (not significant results) from a trial involving 4 patients, one of whom died.
    2) The announcement reported reductions in only 1 biomarker (p70S6K). How many biomarkers were they observing?
    3) The reductions in this 1 biomarker were between 8% and 65%. A 65% reduction in p70S6K is impressive, 8% is not so impressive. What were the values for the patients in between? Were they closer to 8% or 65%?
    4) The ONLY aim of this initial trial was to see if the treatment was safe to use. Indeed, the trial was designed with this aim in mind. The announcement reported nothing on safety. We know that the lowest dose was tried and that this had a positive effect on p70S6K. What were the effects of higher doses on various biomarkers? Indeed, are higher doses safe enough to use in humans? The answers to these questions are VERY relevant for the treatment to be viable in humans. It may be that higher doses are yet to be trialed. If this is the case then why not wait until after they have been trialed in order to make the announcement?

    Of course, the answers to the questions of safety and efficacy will (hopefully) eventually be answered by better designed human clinical trials with larger cohorts in the future. I will be paying close attention to the results of these trials whose results will be far more relevant in determining if and when I re-purchase stock in this company in the future. The results of the dog studies would also make for interesting reading.

    But the question remains, why release 'useless' data about reductions in 1 biomarker (at wildly varying degrees), in a non-significant sample of 4 patients, at a low dose, as a result of a study that was designed to test something entirely different (safety potential) that wasn't even answered by the announcement? As an individual who has performed and published clinical medical research in the past, I would be embarrassed to release 'results' such as the one in the announcement.

    Some individuals have rightly pointed out that the announcement will help recruitment of new patients by raising the profile of the treatment. Others have stated that the announcement has alerted new investors to the potential of the company and this has increased demand for the stock. Both are valid points although I suspect several of the new investors are day-traders who have bought in at $0.009 and $0.01 and will soon dump on no further share rise. Yet others will infer that if there are reductions in biomarkers at a low dose then the treatment must surely work, especially at larger doses. However, reductions in one biomarker do not say much about reduction in tumour size which must surely be the end result that matters most.

    Although my reading of company financial statements is amateur, I also note that, based on the last quarterly, we only have operating cash for 1-2 quarters. As such, was the release of the recent news an attempt to inflate the share price for a few days in order for the company to get a better deal for an upcoming cash raising? If I was a cynical sort, I would suspect that it might.

    I do not dispute the potential of this company or this treatment. The fact that the treatment can potentially be used to treat a wide range of aggressive cancers is fantastic from a medical and profit-making standpoint. I just think that the company shareholders deserve a better quality of announcement when the appropriate information comes to hand. My best wishes to all current shareholders.

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