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Pannobhaso
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A researcher into gene silencing as a technology for improving the lives of those suffering from incurable diseases. Benitec Biopharma is my primary investment in this technology as ddRNAi offers one-time treatments for a broad range of these diseases.
  • When You Are In A Hole, Stop Digging. 10 comments
    Apr 27, 2014 3:48 AM | about stocks: BNIKF

    I know that many retail shareholders are very disappointed at the lack of progress in the HCV clinical trial and would like to see Benitec's (OTCPK:BNIKF) management address this issue.

    Recently, management has made two announcements which provided guidance to shareholders on the start of the TT-034, HCV clinical trial. One announcement said the start would be in early to mid March 2014 and, in early March, the second announcement said dosing would begin within weeks. Both of these two announcements proved to be incorrect as dosing is yet to start. Furthermore, there has been no indication that any patients have been successfully recruited for the trial.

    Despite many recent news articles and television appearances featuring the company, this misjudgment of the trial start date seems to be the point that is sticking in the minds of shareholders and possibly other industry observers. This is a hole that management has dug for itself. However, having made those previous announcements and gotten them wrong, providing another announcement could end up making the hole deeper.

    Other than announcing that dosing has commenced, where should management go from here, especially as there has been a sharp decline in the share price and the biotech market in general?

    What is clear is that whatever move management makes they have to get it right.

    Management could keep quiet until dosing occurs. This would certainly prevent them from digging the hole deeper, however, this may not satisfy those shareholders who are feeling disappointed about the progress of the current clinical trial. Ordinarily, having disappointed shareholders may not be too much of a problem if management knows that the disappointment will be short-lived. However, keeping silent may also run the risk of drawing comparisons with the cancer pain management program which the company forecast to be in clinical trials in 2012 but then it disappeared from view for reasons that were not made clear to shareholders. Such a comparison could see more significant losses in the share price as investor become more and more nervous. This in turn could trigger our new investors to flex their muscles and start to demand changes at the Board level.

    Management could try to go on the offensive by making more announcements about up-and-coming events such as the Non-Small Cell Lung Cancer program, or a possible merger but, in my opinion, this would not be viewed favorably by the market unless there is some real substance to such an announcement. Any general announcement would be seen as more of the same. This strategy, unless supported by solid, positive facts would therefore be counter-productive.

    One way of getting it right is to announce only facts and not speculation. This would be my recommendation to management. I believe the immediate way forward for management is to release factual information to the market as a follow-up to their previous statements. The announcement would inform shareholders about the number of patients that have been screened, the number that have been placed into one of the cohorts, the main reasons why volunteers have been screened out and the reason why the San Diego site is yet to open for recruitment.

    This final strategy may not be acceptable to all shareholder but it would provide management with a new base upon which it can rebuild the TT-034 clinical trial story.

    Disclosure: I am long BNIKF.

    Additional disclosure: The article in not intended as investment advice. Readers should do their own research.

    Themes: HCV, Benitec, TT-034 Stocks: BNIKF
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Comments (10)
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  • brama66
    , contributor
    Comments (61) | Send Message
     
    Pannobhaso, I think Benitec should consider upping the incentives to the first and second cohorts. I mean, who wants to be just a safety tester, with no other incentive, for a one-shot treatment that could potentially be their cure? What are your thoughts on this?
    27 Apr, 09:21 PM Reply Like
  • Pannobhaso
    , contributor
    Comments (107) | Send Message
     
    Author’s reply » Brama, I think you are right. There are rules about what kind of incentives can be offered but all avenues should be pursued.

     

    If there are no patients wanting to be part of the first two cohorts (we don't know this for certain), then I think the company should seek discussions with the FDA in order to seek advice on how to proceed. This would be a positive move and, if announced, would give Benitec longs some confidence that whatever action is taken will be action sanctioned by the FDA.

     

    When TT-034 was presented to the Recombinant DNA Advisory Committee (RAC), one of the pannelists wanted the first two cohorts to receive a therapeutic dose. Perhaps the FDA could be persueded that the dosing for cohort three is low enough to be safe and that that dose should be a new starting point. I doubt that this would get over the line but, if it did, that would certainly move the trial along very quickly and would see a jump in the share price I am sure.
    27 Apr, 10:12 PM Reply Like
  • brama66
    , contributor
    Comments (61) | Send Message
     
    I agree. All we have to do is get to the therapeutic levels and TT-034 will sell itself. Man! To be so close, and yet so far.
    28 Apr, 10:03 AM Reply Like
  • lemmema2
    , contributor
    Comments (19) | Send Message
     
    I am a bit disappointed with MGMT to be honest. SP really dropped significantly over the last couple weeks. Sold some of my shares, just to be on the safe side. will rebuy when there are news coming up. thanks for the info panno!
    27 Apr, 10:46 PM Reply Like
  • brama66
    , contributor
    Comments (61) | Send Message
     
    Same here, lemma. Sold some and waiting for more of a drop to buy back in. In my opinion, might as well take advantage of the delay, I guess.
    28 Apr, 10:11 AM Reply Like
  • pga2003
    , contributor
    Comments (30) | Send Message
     
    No doubt.....MGMT guidance has been a huge and costly drag on my holdings.....I had a lot of shares sub .90 and then doubled up at twice the price due to their guidance. MGMT's guidance has been a joke and they may need to be held accountable for it .... TT-034 can stand on its own, two monkeys and an ostrich could shepherd it through the trials at Duke....They have proven to be a not ready for prime time management team...it's like they are afraid to dose. I wish I was strong enough to sell then rebuy, but I am and continue to be afraid that the second I sell, there is a dosing announcement and SP goes up leaving me holding the bag. I guess paper losses are what happens to those not sophisticated enough to read between the lines on guidance....Imagine selling in the $2 range and buying back today, we'd all have 2X as many shares for the price of broker's commissions. I guess I will have to be content with my shares and just continue to be the basic buy and hold type believer. Shame on MGMT guidance though, and someday they may have to be made accountable.
    28 Apr, 10:25 AM Reply Like
  • pga2003
    , contributor
    Comments (30) | Send Message
     
    Panno, I agree with you totally about the hole. As far as I am concerned silence from MGMT is best at this point, as the last thing we need is another "announcement that there is no announcement".... The FDA has practically begged them to dose a patient, what a joke. If a patient is dosed and gets an unrelated illness or other problem, that is what Duke is there for, to control the damage and otherwise handle the situation, they are the one's doing the shepherding at this point and I wonder if Duke has given them plenty of viable first patients but Benitec keeps rejecting them because they are not ready for prime time clinical studies and are too scared to pull the trigger.

     

    I am turning off all Benitec news for at least a week and saying f it, wake me when the patient has been doses.
    28 Apr, 10:32 AM Reply Like
  • brama66
    , contributor
    Comments (61) | Send Message
     
    Yeah, at this point I told friends who have invested that one option is to do just that: hold until the end of the year. At least that way they don't get disappointed with all the delays and non-news, and hopefully we will be in therapeutic levels by then.
    28 Apr, 11:08 AM Reply Like
  • jer_vic
    , contributor
    Comments (2) | Send Message
     
    Hi Pannobhaso:

     

    In your post, you say:
    Both of these two announcements proved to be incorrect as dosing is yet to start. Furthermore, there has been no indication that any patients have been successfully recruited for the trial

     

    What are you basing this on? The fact that the company has made no announcement on those issues, or have you heard definitively that they haven't happened yet?

     

    I guess I'm wondering if it's possible that a patient has been recruited (or even dosed), but the company hasn't announced it yet, for whatever reason.
    30 Apr, 05:31 PM Reply Like
  • Pannobhaso
    , contributor
    Comments (107) | Send Message
     
    Author’s reply » Hi jer_vic, I guess anything is possible, however, the company has stated publicly that it will announce when the first dosing has been carried out. The fact that no announcement has been made is, therefore, what leads me to make the statements in the article.

     

    Could the first dosing have already taken place? Yes, it could but to have done so without any announcement would be in breach of their guidance on this matter.

     

    Whichever way you look at this it is not a good look for the company, however, in the scheme of things, getting the dates wrong is not the end of the world, especially if management learns from the experience.
    30 Apr, 11:02 PM Reply Like
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