Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

The Aussie Rout

|Includes: Benitec Biopharma Ltd (BNIKF)

Well Benitec Biopharma (OTCPK:BNIKF) got well and truly hammered on the ASX overnight! With the weakening sentiment about biotech in the US I would expect to see more selling of BNIKF today. The biotech sector is no stranger to volatility and Benitec is no exception to this.

Adding to Benitec's woes is the company's inability to predict when events will occur. Having received IND approval from the FDA in January and predicting the start of the trial in early to mid March, then revising this forecast in March to "within weeks" only to be wrong again has clearly put doubt in the minds of some investors. While this is a serious shortcoming of management (they have done this previously) it is not the end of the world.

The technology has not changed. The chance of finding cures for HIV, HCV, HBV, NSCLC, AMD and many other diseases has not changed. The company is cashed up, with enough capital to take the HCV trial to the Pllb stage and the NSCLC program to a Pl/lla stage. The first safety results for the HCV program should be known in Q3 2104 (not long to wait). Furthermore, early safety results from the Calimmune HIV trial could be announced at any time. In short, the many positives associated with the company are still very much intact.

For those who are or wish to be long on Benitec, the downturn in sentiment is an opportunity.

The other interesting news is the termination of Novartis's RNAi program. I have mentioned in previous articles that I thought Novartis may be a suitor for Benitec's Non-Small Cell Lung Cancer program. The termination of Novartis's in-house, siRNA NSCLC program I think adds weight to a possible buy-in from Novartis. NSCLC is clearly a disease area of interest to Novartis and (as I have said previously) the Benitec shRNA program is in advance of theirs. I suspect that the company will let Benitec do all the heavy lifting but, when the results of the Pl/ll trail start to filter through, they will declare their hand.

The implied thread throughout these comments is that it will be results which determine the real value of the company and its attractiveness to the big players. The day to day share price will jump up and down but Benitec's potential will not (at least not in the short/medium term). Having been introduced to Benitec, can one afford to let daily price movements get in the way of the long term possibilities?