1. Company Directive: The main focus of the company has been to re-purpose a drug Monepantel (MPL) a small molecule currently registered and marketed as a treatment for parasite infections in food chain animals for the treatment of cancer in Pets and Humans. PAA is independently developing Monepantel as a safe and potent modulator of the mTOR pathway which plays a pivotal role in driving many cancers.
  2. (Unverified) PAA have completed one set of trials that have proven that Monepantel to be an effective drug in treating cancers, however, they have has some problems with the taste of the drug in both humans and pets, the drug also seems to be hard on the stomach.
  3. The second set of trials:
    1. Phase 1 – K9 trials – currently underway seems to be very positive and seems to have overcome the taste issue.
    2. Phase 2 – k9 trials -(Unverified, possible start in September or August this year), the pills are in the process of production for them the trials soon.
  4. Epichem is a wholly owned subsidiary of PAA. Epichem approximately earns ~$3M to ~4M per year from sales. They do have great ambitions to expand sales. The company has currently increasted their advertising and marketing spending + built a new facility ( which accounts for the debt of ~1.19M) so that they can go to the next level of production. Their sales have slowly been ramping up since 2017.
  5. The Elanco Option – PAA  has entered into an Option A greement with Elanco US. Under the agreement,PharmAust has granted Elanco an option to negotiate for an exclusive, worldwide royalty bearing commercial licence to use PharmAust’s intellectual property in thefield of treatment of cancer in animals.
  6. Cash flow position is currently positive:
    1. Currently could be holding ~$2.6M in the bank.
    2. A recent un-successful raise of 80M shares at 2.5C. 2 Free shares for 5 New shares were on offer.
    3. A shortfall of 28M shares was successful at 2.15c.
    4. The largest expenditure the company faces at the moment is cost and benefits to employees, which is currently at about $3.2M per year which seems unusually high. (Further investigation required on the number of employees in the company, directors benefits and so on). As referenced in the Ann: 20/04/2019
    5. Another unusual item spotted is the Advertising expenses of 45k, it’s unknown as to what this 45k is used for. For a relatively unknown company, this expense for a quarter seams unusually high.
    6. Though revenue is set to rise, expenses are also set to rise. Excluding Epichems revenue, expenses are set to rise from approximately $288K to $440K for the following quarter. Revenue is possibly not going to change. As referenced in the Ann: 20/04/2019.
  7. Current techical analysis
    1. Shows signs of the SP being pushed down on low volume
    2. Indication of the SP dropping further if support breaks at 200MA evident from MACD.
    3. 15MA ,50 MA, 200 MA are in favourable position. This could indicate only a temporary pull back or manuplation of the SP.
  8. Top 20 Shareholders hold 35.99% in the company.

Research

Monepantel (MPL) is an oral aminoacetonitrile (AAD) compound that modulates the mTOR pathway, which is recognised as a key driver of cancer.

MPL (the company Novartis) is already on the market and is used for a different purpose which is to treat parasitic illnesses in farm animals ie. veterinarian use.

Treatment of cancer has always used fairly traditional methods such as radiation, key more therapy, hormonal therapy and surgery all very hard to administer and monitor progress off. Most of these therapies can cause damage to cells/organs that have not been affected by cancer.

The use of Monepantel (MPL) falls into a class of therapies that are called “Targeted Therapies” that is designed to only attack cancer, with (MPL) low levels of toxicity to other cells and organs in the body.

PharmAust hopes to prove that their MPL drug is a broad spectrum drug, that will treat a large section of cancers.

In PharmAust phase 1 studies, the drug has shown a significant reduction in phase 1 cancers for both humans and animals, it is important to note that the drug has administered to patients that have failed all other forms of conventional treatment such as Kemotherapy , radiotherapy or so on. Still maintaining low toxicity level.

Some content referenced from above video.

The target market for this drug is obviously being Humans and animals who have cancer, which is more a multi-billion dollar industry. It is close to a billion dollar industry in pets alone.

Only a few major companies worldwide seam to be producing targeted therapeutic drugs, that are using the mTor type mechanism to target cancers are already making billions of dollars.

(Companies that exist in this sector are yet to be identified)

Important Annoucement Summarys

  1. Following a single dose, Blood concentrations of MPL exceeded those observed in the Phase I clinical trial in humans, which were associated with reduced tumour marker levels in blood. The serum concentrations from one tablet in dogs also exceeded MPL levels observed to achieve anti-cancer activity in mice bearing human cancer xenografts.

  2. Baeagles were sequentially treated with either 2, 4, 7 or 10 tablets and then monitored over three days, No adverse effects, toxicity or safety related observations were reported (by the US-based independent research organisation…).

  3. Epichem awarded contract extensions with DNDi (www.dndi.org), valued at 1.2M over the course of the year. It also renewed its contract with Unity Biotechnology Calafornia.
  4. (By Alto Capital) Renoucable rights offer:
    1. 52M ( @2.5c) out of 80M shares taken up,
    2. shortfall placement of approximately 28M (@2.15c) shares was completed later (oversubscribed). $700k not included in quaterly.
    3. Dicounted share price was 2.5C + 2 new shares for every 5 purchased.
  5. Research and Development (R&D) Tax Incentive refund of $672,250 for the 2017/2018 financial year also not included in the quaterly.

  6. Posible $2.565M currently int he bank (Need to verify this).
  7. Based on current quaterly spending and forcasted quaterly spending of $1.6M, presumig that recepts have not been accounted for, spending is due to go up to $422,000 from previous lows of $288,000. 

 

All 4 directors have actively participated in the recent rights issue.

 

  1. Groups of healthy beagle dogs successfully administered either 2, 4, 7 or 10 tablets in Phase I single dose escalation study.
  2. No apparent taste issues for dogs even after taking 10 tablets, Successful administration of 10 tablets provides an excellent safety margin. No adverse effects, toxicity or safety related observations were reportedby the US-based independent research organisation conducting the study.
  3. With this very high safety margin PharmAust will now commence daily repeat dosing tests to determine how best to maintain long term monepantel blood levels that correlate with enduring anti-cancer activity. Phase 1 is ongoing.
  4. In the future it is envisagedthat pet owners will be able to administer these tablets very simply to their dogs at home, orally which is a big advantage over conventional cancer treatment.
  5. Results of Phase 1 ongoing trials will further provide the company with a dosage strategy.
    1. Pharma Australia has some difficulty with the administering of the Monepantel drug to humans and dogsdue to taste. PAA has successfulycompleted its monepantel taste masking program in halthy beagle dogs. The taste testing was conducted in collaberations with BRI Biopharmaceutical Research INC, Vancover, Canada and Catelent Pharma Solutions in San Diego, USA.
    2. BRI established a suitable micronized tablet prototype for testing ( 15 OCT 2018 ANN). Catalant commenced procedures to scale production of this tablet for clinical trials.
    3. Beagels readly consumed the tablets from hand or from the fllo with or without FDA approved coated taing agent, which was a very positive sign. PharmAus have chosen to produce uncoated tablests in a first step.
  1. PharmAust and Elanco commence data sharing agreement.
    1. under this agreement, Elanco will permit PharmAust to reference certain Elanco controlled safety and blood chemistry data that were generated for the regulatory approval of monepantel in Australia, New Zealand and 27 countries within the European Union.
    2. This Data and Regulatory Rights Agreement supports the Option Agreement executed between Elanco and PharmAust on 12 April 2018, providing PharmAust with the ability to more efficiently develop its Phase II clinical trials in dogs.
  2. PharmAust gains ability to expedite Phase II clinical trial program in dogs with cancer.
  1. Researchers at the Olivia Newton-John Cancer Research Institute demonstrate monepantel’s major metabolite retains anti-cancer activity similar to monepantel.
  2. The monepantel metabolite shows relatively little effect upon non-cancer cells.
  3. Monepantel and its major metabolite together provide a “double kick” to killing cancercells.
  4. “Monepantel and its metabolite are predicted to provide an enduring and specific effect through a “double kick” to cancer cells, while minimally affecting normal cells in the body.” – PharmAust Chief Scientific Officer, Dr Richard Mollard.
  1. PAA entered into an option agreement with Elanco US Inc to develop Monepantel as a novel treatment.
  2. PharmAust has granted Elanco an option to negotiate for an exclusive, world wide royalty bearing commercial licence to use PharmAust’s intellectual property in the fieldof treatment of cancer in animals;
  3. The Elanco Option will continue for a period ending six months after receipt of the finalreport for the relevant canine trial that is the subject of the Option Agreement.
  4. Upon Elanco’s exercise of the Elanco Option, the parties shall enter into a negotiationperiod not lasting more than six months to agree the terms of the license agreement,including commercial payments to PharmAust. Should Elanco not proceed to exercise the option PharmAust will be free to seek alternative commercialisation partners.
  1. Employee benefits seam to be very very high. $3.2M per year.
  2. EpicChem bringing in a significant bit of revene, a change of their revenue structure will cause a major problem with the company. This is a major risk.
  1. PAA  has entered into an Option A greement with Elanco US.
  2. Under this agreement, Elanco will supply PharmAust with GMP-grade monepantel for use in clinical trials in dogs to determine the anti-cancer potential of the drug. Under the agreement,PharmAust has granted Elanco an option (“ the Elanco Option”) to negotiate for an exclusive, worldwide royalty bearing commercial licence to use PharmAust’s intellectual property in thefield of treatment of cancer in animals.

2 thoughts on this article.

Nick says:

Great work mate 🙂 Are you holding?

Bushmaster says:

Hi Nick, Yes I am. Was hoping to see it go down a bit and get a bit more, but happy none the less to just hold and wait.
how about you?

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Financial Summary

Updated by Human on 08/06/2019. If figures are wrong please email me.
Code:
PAA
SP:
0.037
SOI:
219 M
Cash:
2.6 M
Cash to last 4 Qtr.
This Qtr: 288 K
Next Qtr: 442 K
Debt:
1.2 M
MC:
8.1 M
EV:
4.4 M

This is the personal financial diary of a single inexperienced investor (AKA Bushmaster) who has no formal financial education. Nothing on this website is financial advise.