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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.
  • TT-034 Safety Shown In First Patient Dosed 21 comments
    Jul 25, 2014 1:20 AM | about stocks: BNIKF, BTEBY

    With regard to the clinical trial of Benitec's (OTCPK:BNIKF, OTCPK:BTEBY) TT-034 candidate for the treatment of Hepatitis C (HCV) the company recently announced that:

    The first patient dosed in the trial has to date experienced no treatment related adverse effects. Liver biopsy results from the first patient were encouraging and in line with expectations. TT-034 DNA and short hairpin RNA (shRNA) were both detected in the biopsy at sub therapeutic levels, indicating that liver transduction occurred.

    As the first dose was intended to prove safety only, this is as good a piece of news as could be expected (although no results from a single patient can be seen as representative of the broader HCV community).

    This safety outcome enabled the trial's Data Safety Monitoring Review Board to approve the dosing of the next patient (in accordance with the trial protocols).

    The first two cohorts in the trial are being dosed at sub therapeutic levels and so no data on the efficacy of TT-034 was expected at this stage and none was released. However, if we examine the last sentence in the statement above and compare this to what we do know we can get some idea of what may be occurring. The statement tells us that TT-034 has be transduced into the patient's genome and that shrna is being produced. We also know that TT-034's shrna molecules are extremely efficient at knocking down HCV RNA (refs: 1, 2). The combination of these two pieces of information tells us that, even at these sub therapeutic dosing levels, viral RNA must be being knocked down and therefore there must be some reduction in the viral load of this first patient.

    The questions we now need to ask are: is this viral load reduction measurable and for how long will the reduction be sustained?

    The answers to these questions cannot be determined at this point in time and so we will have to wait until more data is release by the company. What we can say is that all the indications so far are very positive and hopefully the next cohorts will prove the case for TT-034 being an effective treatment for HCV.

    Disclosure: The author is long BNIKF.

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

    Stocks: BNIKF, BTEBY
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Comments (21)
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  • omcdac
    , contributor
    Comments (228) | Send Message
     
    Nice update.
    25 Jul 2014, 02:09 AM Reply Like
  • timfrisbie
    , contributor
    Comments (22) | Send Message
     
    Unfortunately the sp doesn't reflect the good news, probably because of the 28 day ( at least) delay in the second dosing. Panno, why wouldn't they have 4 or 5 possible candidates prepared for second dosing just in case something like this comes up? In my opinion, management needs to show a greater since of urgency in these trials. After all, it did take them four months after FDA approval to dose first person. My other concern is that all the other companies working in ddrnai research will simply wait for Benitec's patents to expire before commercializations, and Benni and their shareholders will not be properly rewarded. I have great hopes for this technology but am starting to question management's ability in following a timeline and anticipating possible delays and preparing for them.
    25 Jul 2014, 08:35 AM Reply Like
  • bioseeker2011
    , contributor
    Comments (46) | Send Message
     
    I also have concerns regarding Benitec's management. I literally cringed when management recently put out a company update which included the headline "Benitec rises YTD 780%." Management should certainly know full well how completely misleading that claim is due to the 25 to 1 reverse stock split that occurred on July 19, 2013. Also, claims that the company will be worth 10's of billions of dollars are better suited to message board posts then official company pronouncements.

     

    When one considers how poorly BLT.AX has performed relative to its RNAi peer group of companies, I view the sundry media appearances, youtube video's and weekly social media monitoring undertaken by the CEO as completely unnecessary distractions. Perhaps shareholders would be better served if management focused on building the company; do that and the share price will take care of itself.
    25 Jul 2014, 10:03 AM Reply Like
  • Pannobhaso
    , contributor
    Comments (239) | Send Message
     
    Author’s reply » There are a number of points made above and I am not sure that I can adequately respond to them as I am not a part of the management team. However, I can say that these criticisms of management's involvement in the clinical trial are have been raised before and I think management has responded, see http://bit.ly/WHbThg

     

    The fact is that Duke Clinical Research Unit is running the trial in accordance with FDA protocols. It is therefore up to each investor to decide for themselves if they believe management or speculators when it comes to understanding how the trial is being run. I personally prefer to believe management's statements rather than unsubstantiated comments made by others. Equally, I am sure that DCRU would have had backup patients waiting and so there could be extenuating circumstances governing the delay to which we are not privy.

     

    It is certainly true that Benitec has under-performed in comparison to its peers. I have written about this in some of my blog posts on Seeking Alpha. In short, I believe that the share price will only start to match its comparable RNAi companies when it completes one or more sizable deals for its pipeline products. If the company cannot execute such deals, then it will be left to develop its pipeline through capital raising, which means that share price uncertainty will continue. That said, Benitec is developing a very attractive pipeline to treat mainstream indications and, IMO, it is only a matter of time before one or more if these pipeline programs will be partnered with big pharma. This current price, therefore, represents a good buying opportunity.

     

    I personally don't recall management making claims that the company will be worth 10's billions of dollars and so I would be interested in the reference to this quote. Without this I cannot comment.

     

    I do agree that management has not been good at meeting its own timetables and hopefully this will improve now that the team is expanding and bringing in more expertise.
    25 Jul 2014, 11:20 AM Reply Like
  • bioseeker2011
    , contributor
    Comments (46) | Send Message
     
    I noticed you chose not to address the claim that the stock has risen by 780%. Given the 25:1 reverse split, do you think that is a fair or even accurate representation of BLT.AX share price performance?

     

    As far as the reference to"the technology is potentially worth 10’s of $bns", that claim was made in a June 2014 Shaw Stockbroking report which Benitec then promoted to shareholders in their July 2014 "silenceworks" company update. Last I checked both the update and the brokerage report were available for download from Benitec's own website. So, while management may not have made the claim directly, they certainly seem more than happy to promote the claim when it is made by others.
    25 Jul 2014, 12:19 PM Reply Like
  • Pannobhaso
    , contributor
    Comments (239) | Send Message
     
    Author’s reply » I don't think that any claim of a 780% rise in the pps is a fair claim but equally I don't think it is fair to extend and attribute the comments of a stockbroker to management. Any management team will promote the good press and analyst research that they get. If they did not promote such coverage, then there would be people queuing up to criticize them for not doing so.
    25 Jul 2014, 08:01 PM Reply Like
  • bioseeker2011
    , contributor
    Comments (46) | Send Message
     
    There are good reasons the market currently values a company with a purported technology worth "tens of billions" at less than 1% of that value and it starts with management credibility. So, while promoting brokerage reports to shareholders may be an acceptable practice in Australia, I can assure you that among U.S. biotech investors it is considered a huge red flag. Another red flag is that until very recently Benitec didn't even have in-house R&D capabilities. How can a company that's been around since 1997 not even have a lab for most of its corporate existence? Frankly, I have no doubt that the company's intellectual property is valuable, however, in the dozen or so years since going public, the company has failed miserably at commercializing it.
    26 Jul 2014, 09:32 AM Reply Like
  • Pannobhaso
    , contributor
    Comments (239) | Send Message
     
    Author’s reply » Actually, the company did have its own lab in the US previously. So it has not "just recently" acquired these facilities for the first time. A lab was part of the plans of a previous management team but the operation became too expensive and the company had to withdraw from the US. This is how Tacere was formed. After this, Pfizer pumped in millions of dollars too develop TT-033, which became TT-034, using their R&D facilities. Benitec then reacquired Tacere for a script plus royalty only deal (no cash) at a value that was probably less than one tenth of the money that Pfizer put into TT-034.

     

    Now, I don't know about you but I call that pretty smart business; getting someone else to incur the lions share of the development costs and then buying back the business through the issuing of a few new shares, especially now that we are starting to see the first clinical results appear for TT-034 and it is a case of so far so good.

     

    I can understand that some shareholders are frustrated and would like progress to be faster but they should also give credit where credit is due.
    26 Jul 2014, 08:39 PM Reply Like
  • bioseeker2011
    , contributor
    Comments (46) | Send Message
     
    Giving management credit, for what? Running a "virtual" company that lacked core expertise in its own science. Failing miserably to commercialize a compelling technology before its key patents expire? Realizing far too late that a business model predicated on licensing/royalty revenue was flawed? While you may be willing to justify the company's lack of in-house R&D capabilities as "pretty smart business", I consider the company's failure to invest in its own pipeline to be one of the biggest bonehead moves I've ever seen by any biotech.
    27 Jul 2014, 01:07 PM Reply Like
  • Pannobhaso
    , contributor
    Comments (239) | Send Message
     
    Author’s reply » And how many products have its competitors such as ISIS and Alnylam managed to commercialise? Their patents are running out too.

     

    It would seem that you just want to sound off in a way that lacks circumspection. That is your prerogative but it is not very helpful.
    27 Jul 2014, 10:22 PM Reply Like
  • brama66
    , contributor
    Comments (168) | Send Message
     
    Commercializing what? A technology that wasn't even safe for human trials yet? TT-034 took about ten years to develop into a viable therapy. A smart company licensed their tech out while still working with TT-034 themselves to generate revenue the only way they could without a yet comercializable product. Additionally, it sounds as if you are unfamiliar with the past background of fighting for their IP and patents that they had to do just to keep their tech as theirs, which narrowed their patent time. This company has fought tooth and nail to not only keep their IP and patents, but also pressed forward to not only develop TT-034, but also have their first in man trial. When you do the research completely on how this company fought to survive, it is actually quite the underdog biotech story if you ask me.
    28 Jul 2014, 09:42 AM Reply Like
  • bioseeker2011
    , contributor
    Comments (46) | Send Message
     
    Here's what Professor John Mattick, who at the time was the non-executive Director of Benitec Ltd. said in 2002, "Benitec's technology is natural and potent and is recognized as offering a new means of gene control, which is significantly more effective than current antisense technology". If over a dozen years ago Benitec had the better technology and a clear head start then why is BLT.AX market cap now, what...$80M while ALNY's is over $4 BILLION.

     

    Feel free to check my math but I believe $1 invested in Benitec's July 2002 initial listing on the ASX would be worth, split adjusted, around 8 cents today...that's a negative 92% return. If instead, you had invested that same $1 in ALNY's June 2004 public offering, it would have returned over $8. It is certainly clear which company the market thinks has done the better job.
    28 Jul 2014, 10:02 AM Reply Like
  • Pannobhaso
    , contributor
    Comments (239) | Send Message
     
    Author’s reply » And yet Alnylam has not commercialized one product, which was the point of your previous complaint about Benitec's management. If non-commercialization is a problem, as you claimed previously, why do you now hold up Alnylam as an example of good management? This is completely illogical.

     

    Are you now changing your argument again? If market cap is now your new argument, then I suggest you follow Brama66's advice and do some real research on the company then you may understand why there is a MC discrepancy and therefore why Benitec represents an opportunity at its current price.

     

    We are all entitled to our own opinions but you seem to be jumping from one failed argument to another in a effort to justify an ill-informed view for reasons that are unclear to me.
    28 Jul 2014, 10:42 AM Reply Like
  • bioseeker2011
    , contributor
    Comments (46) | Send Message
     
    1) Ad hominem attacks carry no weight with me. 2) I'm an investor not a cheerleader with a company-centric bias. 3) Share price appreciation is how I measure a company's success; it is clear, at least to me anyway, that Benitec has, to date, failed in this regard. Ironically, this failure has de-risked the stock to the point where I'm willing to take a flyer even if I don't have a lot of confidence that TT-034 will be the "answer" to unlocking ddRNAi's potential. (see http://bit.ly/UIoFu6)
    29 Jul 2014, 09:19 AM Reply Like
  • Pannobhaso
    , contributor
    Comments (239) | Send Message
     
    Author’s reply » bioseeker, I get that you are dissatisfied with management. I know you believe the company should have spent more on its pipeline. I get this too.

     

    What I don't get is that it is the current management team that has moved the company away from a reliance on gatekeeper IP and toward the pipeline direction that you are advocating. So why be so critical of the current team?

     

    I think we can both agree that they have not yet been able to leverage this move to the advantage of the share price but I see that as the opportunity here and not the problem. They are on track and I believe the company will be a commercial success because of this.
    29 Jul 2014, 11:11 AM Reply Like
  • tonyynot
    , contributor
    Comments (11) | Send Message
     
    To be clear, the Benitec website "Silence Works" update No. 8 dated July 2014 shows a number of bullet points, including:
    Benitec rises YTD 780% plus patent update from Lodge.
    Referencing that headline, their report adds: "On July 1, Biotech Daily, which reports daily on ASX listed Biotech companies, reported Benitec's year to date rise at 780%". When reviewing the 'Full Reoprt' for Biotech Daily for July 1, 2014, we see a reference to Benitec's market cap shown as 15 as at July -13 and as 132 as at July -14. That would represent an increase of 780%, and should be more accurately described as a year over year increase in market capitalization. It certainly has nothing to do with share price.
    As for the Shaw Stockbroking reference to 10's of billions of dollars, it seems to me that their comments were adequately qualified.
    I would take this opportunity to thank "Pannobhaso' for his insightful reports. I always look forward to his next report with great anticipation.
    25 Jul 2014, 06:01 PM Reply Like
  • bioseeker2011
    , contributor
    Comments (46) | Send Message
     
    In my book, YTD starts in January not July and on January 1, 2014 the company's market capitalization was $57M not $15M. That's based on a January 1, 2014 share price of $0.57 and total shares outstanding of 99,902,715 as of 12-31-2013. So, a more accurate representation of the YTD increase in market capitalization would have been on the order of 130% not the "Benitec rises YTD 780%" claimed. Furthermore, because the headline did not explicitly reference market capitalization, I would argue it was intentionally misleading. The fact that we are even having this discussion is, in and of itself, indicative of just that. And while you may feel Shaw's "comments were adequately qualified", that really isn't the point. The issue is whether management should be promoting misleading headlines and 100X valuation metrics to shareholders at all.
    25 Jul 2014, 07:25 PM Reply Like
  • Pannobhaso
    , contributor
    Comments (239) | Send Message
     
    Author’s reply » I would point out that the financial year for Australian public companies is from July 1 to June 30 and not January 1 to December 30.
    25 Jul 2014, 08:07 PM Reply Like
  • brama66
    , contributor
    Comments (168) | Send Message
     
    Thanks Panno! It's intriguing to think about the domino effect of transduction led to shrna being produced, which leads to a strong conclusion that viral knock down is highly likely. It would be interesting to see future data, since the effect is supposed to last the life of the liver cell.

     

    Panno, I'm assuming that therapeutic levels are those in which the shrna is produced at a greater rate than HCV viral replication?

     

    Anyways, a great update. You are always succinct, and Benitec followers greatly appreciate that.
    26 Jul 2014, 12:20 AM Reply Like
  • Pannobhaso
    , contributor
    Comments (239) | Send Message
     
    Author’s reply » Hi Brama66, this presentation from the designer of TT-034, Dr David Suhy, explains it mode of action far more eloquently than I could.

     

    http://bit.ly/1cQYo3n
    26 Jul 2014, 02:18 AM Reply Like
  • bioseeker2011
    , contributor
    Comments (46) | Send Message
     
    The one thing we can certainly agree on is that Benitec is significantly undervalued. I have high regard for RA Capital (early investor in both TKMR and ALNY), Perceptive and the Special Situations Fund. The simple truth is that I likely would not have invested in Benitec had it not been for their involvement. The delayed IND as well as the delay in dosing the first and now the second patient has provided an opportunity to buy shares below the $1.07 price paid by these very knowledgeable investors but with the added benefit of two significant catalysts. The first being the successful initial dosing of TT-034 and the second being Calimmunes HIV trials advancement to its second cohort. The quality of the biotech-specific funds who participated in the February financing went a long way toward validating the opportunity here...now it is up to the TT-034 trial to confirm Benitec's long-awaited promise.
    26 Jul 2014, 01:29 PM Reply Like
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