PNV - Polynovo (was Calzada CZD)

[Lizard]

While we pass the time until the agm presentations start rolling in for comment, it seems like a good time to write up some another small stock.

I have to admit that biotechs haven't been the most rewarding investments I've made in the past. The era of the 2000's for small bio's was about as profitable as the early 1990's were for mining exploration stocks. However, the fascination of the science remains a temptation and, more recently, we've seen a few more biotechs move beyond the endless capital raisings to actually start making profits.

One small biotech in my share collection at present is Calzada (CZD). This stock used to be known as Metabolic Pharmaceuticals (MBP) and once had a strong rise and meteoric collapse on the back of a promising obesity drug which failed in clinical studies. Old thread here (http://www.sharetrader.co.nz/showthread.php?2381-MBP-Trading-Halt).

Having been through a tumultuous phase, the company seems to have settled down a little and is now continuing as a micro-cap with multiple "high probability" ventures from which it hopes to develop commercial success.

Firstly, the Polynovo business. This comprises a bio-absorbable matrix technology and associated patents. It has many potential applications in healing as forms a substrate that can be put in the body to support the growth of establishing cells. There are currently three applications under development:
1. Full thickness wound treatment - ie the use of the matrix as a temporary protection and stabilisation of an area requiring skin graft and, as announced yesterday, potential for the matrix to be injected with the patients own skin cells to regrow skin and replace grafting. The former is under trial in humans and the latter at animal stage.
2. Unspecified collaboration with a major US Medical Device manufacturer (testing concludes in Dec and may lead to license).
3. Licensing of technology to Smith & Nephew who are working with it in the field of bone repair (3 sub-projects under way)

Secondly, the compound responsible for the original obesity drug studies remains in active development. It has been reported that despite the failure of the clinical trial, there is a significant black market production and use of the drug in some parts of the world, with body-builders injecting directly into the fatty tissue and reporting success. While this is not a market CZD intends to target directly, they have taken confidence from this to look at a nutraceutical. They now have three strands to the Metabolic (AOD9604) business:
1. Royalties from use of the compound in Phosphagenics (POH) new anti-cellulite cream (Elixia Bodyshaper).
2. Nutraceutical for fat reduction
3. Bone repair applications

Fully diluted market cap is about $24m at yesterdays closing price of 6.7cps. They had on hand at year end $3.4m of cash and another $3.7m which appears to be in term deposits (not certain why they have not classed these as cash). Cash burn is running at around $3m pa. They also have a developing stream of royalties and licence payments, but that is likely to be offset by increasing costs as key developments undergo clinical trials.

The price of 6.7cps was achieved on only a low volume at end of day yesterday - looking at depth and recent history, it is probably possible to pick them up in the 5.7 - 6.2cps range. Definitely a punt stock, but has a margin of safety with cash and term deposits probably sufficient for another 12-18 months. Chart shows a run up to 12cps in April from which it has since fallen back - it may be setting up for another try, but really needs more volume.

[Lizard]

Time for an update... the company has moved along steadily, although the share price has yet to - currently 5.7cps (market cap $19.8m). Cash and term deposits remaining at end of Dec of $5.7m, with cash burn at the $2.5-$3m/annum (i.e. approx 18 months cash remaining).

Polynovo business:
Since last post, two human trials have been started, with results due in 3rd and 4th quarters. These should provide info on safety and efficacy of Novosorb and should eventually lead to marketable products in the wound healing (pressure sores/burns) area. This is likely to lead to partnering arrangements. It will also put Polynovo in a stronger position in negotiating licenses for Novosorb use in medical devices for applications such as cardiac stents, orthopaedic devices and tissue/bone reconstruction. Current trials are relatively low risk, but timing of revenues is likely to initially depend on new licensing deals.

AOD9604 - the royalties from POH have so far shown themselves to be somewhere between minor and miniscule. However AOD9604 has now been granted GRAS status (subject to journal publication of data), so is now in a position for licensing as a potential ingredient in foods for weight-conscious consumers. It has also passed initial testing in muscle and cartilage repair trials to add to the bone repair applications, providing additional avenues for licensing. Although AOD9604 failed in phase II testing, the subjects in this test were also undergoing a diet and exercise programme - there was some evidence that for those of us who think pills are a substitute to exercise (rather than an adjunct) the benefit may be more apparent. If this is the case, it remains possible that AOD9604 could yet develop a fan club.

Both strands of the business look to have a range of licensing opportunities available that could begin to generate funds in the medium term. The cash burn of CZD is being carefully managed with management focus seemingly on getting to some form of sustainable funding via licensing/partnering on short term/high success projects. Multiple re-rating opportunities exist, particularly from September/October onwards, when trial results could be announced, with licensing arrangements from multiple avenues also more likely from late 2012 onwards (more likely mid-2013).

[macduffy]

Hi Lizard

No doubt you've seen this.

http://www.calzada.com.au/files/uploads/Bioshares450rbpCZD.PDF

I've looked at CZD in the past but it's probably a bit too technical for me. Besides, I don't want to ruin my 100% success rate with life sciences stocks - CST!

[Lizard]

Thanks Macduffy, that is interesting - I hadn't seen it, although aware of most of it.

Have to say that my rate of success with Biotechs is well below my typical success rate, so I'm sure you're right to quit while ahead!

[Lizard]

Well CZD has been tracking in the wrong direction since I started this thread, currently 4.7cps off a low of 4.2cps before today's announcement. However, the announcement today is interesting - in particular, it was interesting to see that they had been invited to submit a contract proposal by BARDA (Biomedical Advanced Research and Development Authority in the US), worth $16.9m which would progress the development of their Novosorb BTM for US development and regulatory approval. The application relates to mass burn casualties. Given market cap of $14-$15m, this would be a significant development.

Also of interest are the photos showing preparation of a wound and grafting using BTM. The success of these initial "proof of concept in human" trials should open the door to more rapid development and interest - first as a stable base for later grafting in deep skin wounds and later to be followed by use with cultured skin.

Still holding out hope for this one - particularly since it doesn't appear desperately in need of cash and news flow should continue.

[Lizard]

Bit of movement in the s.p. today, up 10% to 5.5cps. Result of the first Polynovo "TNP" trial is due out end of April, and all expectations are for a low-risk success here. However, as always with biotechs, the shares themselves are probably more of a punt. :)

[Lizard]

Result of first trial has boosted this one recently - last sale 7.1cps...at least tracking in the right direction for now. Seems the speccies are holding up while the main market fades for now.

[Lizard]

Took in 30% over-subscriptions on the spp. Currently trading at 7.3cps, although trading has been a bit volatile of late. Producing some steady news flow with agreements in hernia repair and facial reconstruction moving ahead.

Further news should come soon in regard to completion of the BTM surgical wound trial, which showed early success in February reporting.

[Lizard]

Bit of traction today - maybe a few traders on board. Closed 9.5cps.

[Joshuatree]

Back to 7.3c today looking pretty weak.

[Joshuatree]

Over 3 million shares traded s/p as low 6.8c but finished back to 7 .3c.

[Lizard]

Probably someone clearing some of the 19m placement shares issued at 6.5cps a few months back.

[Lizard]

Good result on the BTM trial - some pretty ugly surgical wounds tidied up neatly!

Looks like we will now head quickly into the larger and more challenging target of burns patients, with small trial in current quarter (5 patients) to be followed by moves into larger clinical trial work to satisfy US and European criteria for burns treatment.

We already have 510k submission in for Novosorb dressing in Topical Negative Pressure (TNP) dressings, which could see regulatory clearance to market in Q1 next year, and will now also be submitting 510k for BTM, so should be plenty to drive this forward in the next few months. Market cap still only $35m (at 8.5cps).

[Lizard]

Gradual progress at CZD and finally something on the Metabolic front, with the first licensing arrangement for AOD9604. Seems there has been increasing interest and prescription for AOD9604 from compounding pharmacies since the Essendon scandal involving this ingredient, so Metabolic has been able to begin the process of agreeing licence arrangements for their patent estate. It appears double-digit royalties on finished goods are part of the agreement and it is likely other compounding pharmacies will follow.

While compounding pharmacies should, by definition, be fairly low volume producers, this finally establishes a "legally manufactured" product and enables CZD to benefit from the valuable IP developed by Metabolic.

Share price now 7.7cps.

[Lizard]

Always nice to have one stock cheering me up on a Red day.

CZD announced that three surgeons have been given approval to prescribe Novosorb BTM under the Therapeutic Goods Act for one year, which will enable it to go into use and provide more data, refine use and help promote acceptance.

Price back up to 8.5cps :)

[Well Endowed]

Hi Lizard,

I picked up a small parcel of this a month or two back, good to see a bit of action today, has been a bit quiet in turnover for sometime.

[Well Endowed]

bid depth building, little or no offer depth below 10c currently... 510k/BARDA announcement soon?

[Lizard]

Yes, finally making some share price gains after lots of ups and downs! I'm still holding and hoping for some of the current biotech magic to keep working for a bit longer... :)

Also bought a few AVH, although think it is too soon, as stuck in the 12-13cps trading range... not sure if the bigger players are distributing or accumulating. However, with their product a step further along in actually building a market, they seem a little ahead in their regenerative field. Still making up my mind about them though.

[Lizard]

On a roll today... charged through 10cps and currently 11.5cps, so will be interesting to see where it closes since the 0.5cps spread might make it good for short-term traders.

Guessing we see the FDA issue the 510k clearance on the Novopore/TNP dressing product announced this Thursday (assuming it's released as part of the FDA monthly clearances on 5th of the month).

[Well Endowed]

big turnover today, on the surface would seem like a like the market knows, and the asx speeding ticket. guess we'll know soon enough, should make for an interesting couple days trading!

[Lizard]

Guessing we see the FDA issue the 510k clearance on the Novopore/TNP dressing product announced this Thursday (assuming it's released as part of the FDA monthly clearances on 5th of the month).

Sure enough, there's the FDA clearance. On a roll, now up at 13cps.

[Well Endowed]

PolyNovo Receives FDA 510k Clearance, good news - not entirely unexpected given the SP increase of late. Consolidating around 13c now

[Joshuatree]

Aaaaaargh why did i dither over .001 of a cent back at 7.2c with my buy price:eek2: ........ Anyways congrats to holders:t_up: Holding or taking profits now?

[Well Endowed]

Still happily holding here, up nearly 80% in a couple months (Crazy!?) but happy to hold personally for the medium term.

I think there is more potential good news with BARDA, ST- trials etc that could keep it ticking along (that and I'd need to find another 'better' Biotech to stick the $$ into, :p

[Well Endowed]

SP holding up nicely today. up 1c to 11.5.

Had a feeling it might get pushed back through the 10c level with profit taking - but a large bid is building up there now.

will wait and see, still think there is more to play out here, the churn between 11-13c has been promising.

[Lizard]

Closed at 12cps on good volume. I still think it looks good value (as biotechs go...).

Have to say, biotechs seem to be the one thing driving my portfolio at the moment, which is a slightly unusual situation!!

[Well Endowed]

nice leg up again today, last traded 13.5c, up 12.5%. Decent turnover today too. BARDA soon..? I sure hope so!

[NZSilver]

Looks like some nice skilled people;

http://www.asx.com.au/asxpdf/20140514/pdf/42pm2tcl73wz50.pdf

[NZSilver]

back to 9-10 cents, still nothing here. Seems like the company has gone quiet on us....

[NZSilver]

Finally some positive news re CZD - http://www.asx.com.au/asxpdf/20140605/pdf/42q1rtw8xwyx80.pdf

[Well Endowed]

I'm still in. bid depth improving and SP holding up nicely in a tough market

[NZSilver]

http://www.asx.com.au/asxpdf/20140715/pdf/42qtkf43sw2lrz.pdf

Is this a good sign that there are positive things to come.

Burn trial underway - just awaiting some positive results....hopefully

[Lizard]

Good to see they now have the CE mark for Novopore to be sold in Europe for topical negative pressure applications... so we have a marketable dressing that is superior to the competition. Now just need to get it selling! :)

[NZSilver]

Yeh hopefully they can get more traction than PEB

[Lizard]

Yes, I remember CST... another one with a market leading product in TB testing. The money was made early on in the shares, but the commercialisation and eventual takeover never really got shareholders any further ahead. However, I do think that, by comparison, CZD starts from a relatively lowly market cap.

[Well Endowed]

Positive announcement relating to czds peptide, full gras approval in the USA. Might interest some supplement companies. Thoughts?

[NZSilver]

Recent polynovo BTM dressing presentation - very positive regarding results from use in pigs experimentally and human patients with actual burns - seems like a great product helping those unfortunately suffereing from burn injuries.

NB; there are some graphic images of burns in the presentation.

http://polynovo.com/BTM-ISBI.pdf

[NZSilver]

good news flow - finally

http://www.asx.com.au/asxpdf/20141023/pdf/42t3ch1lxr8t52.pdf

[Lizard]

Yes, a bit bored with this one - thought it would be a busy year, but it seems to have dragged! The BARDA grant would definitely help if it comes through.

[Lizard]

Change of ticker today to PNV (Polynovo), as they look to divest the old Metabolic arm and AOD9604

[NZSilver]

Good news flow over last month or so,

Human trial with product granted last month, its good to have news as its been slow going over the last year, however product looks very promising.

PolyNovo Limited (ASX:PNV) has been granted ethics approval by the Alfred Hospital in Melbourne to begin enrolling patients in the Multicentre CE Burns Trial using its Biodegradable Temporising Matrix wound dressing.

Alfred Hospital is a major Trauma & Burns referral site for Victoria and gives the company two sites participating in the 20 patient trial.

The trial represents an important component in fulfilling the requirements for BTM to obtain a CE Mark, which will enable the company sell BTM throughout Europe.

It will also facilitate registration in Australia and New Zealand.

The first patients will be enrolled in the trial within the next couple of months.

Funding requirements to undertake this trial are being assessed. PolyNovo has filed an application for funding from the Victorian Government.

BTM is a wound dressing intended for treatment of full-thickness wounds and burns where the entire dermal structure has been lost to trauma, or damaged requiring surgical removal, and requires a split-thickness skin graft for final closure.

[NZSilver]

http://www.asx.com.au/asxpdf/20150701/pdf/42zjwtnycbkgmn.pdf

[Lizard]

Woo-hoo - two out of two, with both AVH and PNV picking up large amounts of BARDA funding for clinical trials. Portfolio is looking cheerier for it, with PNV at 14.5cps (market cap $60m) and AVH at 9.8cps (market cap $42m). Probably AVH the better pick of the two, given the higher level of funding - $US54m from BARDA vs $US26m for PNV. AVH also likely to generate more product sales faster, given more mature stage of product development.

[Joshuatree]

PNV up 60% today on USA FDA approval. Congrats to LIZ and holders .