| 제목 | FAQs from the shareholders (May 2021)
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| 참고 |
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We (or “PharmAbcine”) prepared this FAQ (Frequently Asked Questions) based on questions we received from investors in recent weeks.
1. Can you explain the recent public disclosure dated May 17 regarding the financial derivative loss arising from convertible bonds?
We issued convertible bonds (CBs) amounting to W100b in May 2019, of which W90b remains outstanding as of end-March 2021. The outstanding CBs are presented in two components on the liability side of the balance sheet, one is the outstanding balance of the CBs and the other is the fair value of early redemption option (the put option) provided to CB holders.
The fair value of the put option is calculated at the end of each quarter, and the difference from the previous quarter is reflected as either valuation gain or loss on the quarterly income statement. During 1Q2021, the fair value of the put option rose due mainly to interest rate hikes, and we posted the attendant valuation loss as financial derivatives loss. We would like to inform our shareholders that this is not an actual cash loss arising from investment activities.
2. What is the company’s plan for the development of COVID-19 therapy?
The company has been developing a therapeutic drug for COVID-19 since the early stage of the pandemic. We started the drug development because we felt responsible to do so as a biotech company that aims to help patients with medical needs.
Through our efforts, we now have a candidate that could work against the current COVID-19 virus and all mutation variants. The drug development was put on hold for a while because this project was unexpected and needed additional funding.
To resolve the funding issue, PharmAbcine has sought government research grants and subsidies. Fortunately, we have been able to secure a couple of government research grants to continue with the studies. We cannot disclose further information because of the contractual obligations, but we hope to produce fruitful results as early as possible.
3. What are the reasons behind the recent falling stock prices?
Our stock prices fell nearly 30% in May mainly because Orbimed, our biggest shareholder, was selling down its 8.2% stake in PharmAbcine. The weak sentiment on the bio sector of late added to the selling pressure.
Orbimed, one of the largest venture capital firm specializing in the bio sector, invested in PharmAbcine via series A funding in 2009, long before the company’s initial public offering in 2018.
Orbimed did not indicate the reasons for liquidating its position. But considering the fact that it held its position for an unusually long time (12 years), its investment decision is not a surprising one. Unfortunately, such a sell-down did indeed create a sense of uncertainty and confusion amongst investors, which also adversely affected the share price.
4. Is the company considering the purchase of its own shares as means to raise stock prices?
PharmAbcine needs to use all available financial resources on the drug developments. This is especially true because of the rapid expansion of the pipeline assets in recent years. This means a share buyback is unlikely.
All of the PharmAbcine’s preclinical assets including PMC-403, PMC-309, PMC-402 will enter a clinical stage over the next 18 months. PharmAbcine will most likely incur heavy expenses to prepare the preclinical assets for the trials. We also need to consider the likelihood of each asset requiring multiple clinical trials as we expand indications.
5. Are there any updates on the ongoing phase IIa olinvacimab mono trial for Avastin-refractory rGBM (recurrent Glioblastoma)?
PharmAbcine initiated the phase IIa mono study in November 2019. So far, we enrolled only 12 out of 36 patients planned for the study because of the COVID-19 pandemic. This trial is currently taking place in the US and Australia. Unfortunately, nationwide lockdowns in both countries created a huge delay. We recently learned from the principal investigators of the study that it could take as many up to two more years to complete the study.
6. What is PharmAbcine trying to accomplish at the partnering meetings?
The ultimate aim of PharmAbine in participating in partnering events such as JP Morgan, BIO USA, BIO EUROPE, and BIO Century is to license out its pipeline assets. These partnering events are like a big market place where potential business partners like global pharmaceutical companies come looking for new drug candidates presented by biotech companies.
Participation in these partnering events is very important for biotech companies because not only does it provide an excellent opportunity to introduce their pipeline assets but also broaden their network within the industry and learn the market trend.
We have been active participants in these partnering events right from the inception of business in 2008. We have witnessed that many of those, who we had a meeting ten years ago at these events, went onto become CTOs and CSOs at global pharmaceutical companies. Further, what we learn from the partnering events has a meaningful impact on our drug development and future directions.
We (or “PharmAbcine”) prepared this FAQ (Frequently Asked Questions) based on questions we received from investors in recent weeks.
1. Can you explain the recent public disclosure dated May 17 regarding the financial derivative loss arising from convertible bonds?
We issued convertible bonds (CBs) amounting to W100b in May 2019, of which W90b remains outstanding as of end-March 2021. The outstanding CBs are presented in two components on the liability side of the balance sheet, one is the outstanding balance of the CBs and the other is the fair value of early redemption option (the put option) provided to CB holders.
The fair value of the put option is calculated at the end of each quarter, and the difference from the previous quarter is reflected as either valuation gain or loss on the quarterly income statement. During 1Q2021, the fair value of the put option rose due mainly to interest rate hikes, and we posted the attendant valuation loss as financial derivatives loss. We would like to inform our shareholders that this is not an actual cash loss arising from investment activities.
2. What is the company’s plan for the development of COVID-19 therapy?
The company has been developing a therapeutic drug for COVID-19 since the early stage of the pandemic. We started the drug development because we felt responsible to do so as a biotech company that aims to help patients with medical needs.
Through our efforts, we now have a candidate that could work against the current COVID-19 virus and all mutation variants. The drug development was put on hold for a while because this project was unexpected and needed additional funding.
To resolve the funding issue, PharmAbcine has sought government research grants and subsidies. Fortunately, we have been able to secure a couple of government research grants to continue with the studies. We cannot disclose further information because of the contractual obligations, but we hope to produce fruitful results as early as possible.
3. What are the reasons behind the recent falling stock prices?
Our stock prices fell nearly 30% in May mainly because Orbimed, our biggest shareholder, was selling down its 8.2% stake in PharmAbcine. The weak sentiment on the bio sector of late added to the selling pressure.
Orbimed, one of the largest venture capital firm specializing in the bio sector, invested in PharmAbcine via series A funding in 2009, long before the company’s initial public offering in 2018.
Orbimed did not indicate the reasons for liquidating its position. But considering the fact that it held its position for an unusually long time (12 years), its investment decision is not a surprising one. Unfortunately, such a sell-down did indeed create a sense of uncertainty and confusion amongst investors, which also adversely affected the share price.
4. Is the company considering the purchase of its own shares as means to raise stock prices?
PharmAbcine needs to use all available financial resources on the drug developments. This is especially true because of the rapid expansion of the pipeline assets in recent years. This means a share buyback is unlikely.
All of the PharmAbcine’s preclinical assets including PMC-403, PMC-309, PMC-402 will enter a clinical stage over the next 18 months. PharmAbcine will most likely incur heavy expenses to prepare the preclinical assets for the trials. We also need to consider the likelihood of each asset requiring multiple clinical trials as we expand indications.
5. Are there any updates on the ongoing phase IIa olinvacimab mono trial for Avastin-refractory rGBM (recurrent Glioblastoma)?
PharmAbcine initiated the phase IIa mono study in November 2019. So far, we enrolled only 12 out of 36 patients planned for the study because of the COVID-19 pandemic. This trial is currently taking place in the US and Australia. Unfortunately, nationwide lockdowns in both countries created a huge delay. We recently learned from the principal investigators of the study that it could take as many up to two more years to complete the study.
6. What is PharmAbcine trying to accomplish at the partnering meetings?
The ultimate aim of PharmAbine in participating in partnering events such as JP Morgan, BIO USA, BIO EUROPE, and BIO Century is to license out its pipeline assets. These partnering events are like a big market place where potential business partners like global pharmaceutical companies come looking for new drug candidates presented by biotech companies.
Participation in these partnering events is very important for biotech companies because not only does it provide an excellent opportunity to introduce their pipeline assets but also broaden their network within the industry and learn the market trend.
We have been active participants in these partnering events right from the inception of business in 2008. We have witnessed that many of those, who we had a meeting ten years ago at these events, went onto become CTOs and CSOs at global pharmaceutical companies. Further, what we learn from the partnering events has a meaningful impact on our drug development and future directions.