No, I didn’t razz Stuart Roberts, but I wish I had…

About a dozen people forwarded me an email last week that was written by Stuart Roberts, Head of Investor Relations at Prima Biomed (ASX:PRR). It got a lot of airplay on various online forums so I consider it to be public domain. It is copied at the end of this post for your general entertainment. It was forwarded to me because people thought I had written the abusive post on HotCopper that started it! Crazy…

I assure you, I did not. I never do anonymous posts and I don’t do random abuse – er, very often.

But… overall, I’d like to start by saying that I really enjoyed reading this email, in fact it gave me a good belly laugh and I’d like to thank Stuart for that. It’s not often you see someone responsible for investor relations at a fairly visible, distressed public company getting antsy about a random posting on HotCopper. I mean, let’s face it, as great as HotCopper is, it’s hardly a forum where people are trading a lot of graceful comments and engaging in deep intellectual discourse. It’s a little more refined than draft beer-fueled dialogue at a sports bar, but not much. The fact that he reacted to it in such a way was, frankly, surprising to me and indicative of how challenging the situation is for PRR.

I think Stuart would do well to simply ignore the retail punters, considering the fact that PRR is probably one of the most beat-up life sciences equities on the ASX. Lot’s of money lost. Need friends, Stuart.

Prima... indeed...

Primo? Not exactly.

What I really loved was the way that Stuart combined a dove-ish “informal” announcement to shareholders with a little ball-slap to the punters (probably just a disgruntled ex-shareholder with a dip in the self-managed super fund). He’s a charismatic and photogenic sort of guy, and you can watch him spruiking PRR back in his Baillieu Holst days (including, interestingly Benitec and Sirtex, topical). His emails are pretty consistent with his style of verbal communication. Stuart has always been somewhat bullish about PRR, obviously enough to jump ship. I note that generally when an analyst jumps ship into industry as a an investor relations guy, it’s a good sign for a stock – though sometimes it’s also just a really expensive PR stunt.

Let’s hope it bodes well for PRR.

Back to Stuart’s email…

I enjoyed the glowing references to the white-hot cancer immunotherapy space that is currently consuming the attention and energy (and balance sheets!) of global biotechnology companies, and I am sure the retail punters did too. It’s great industry story and it has a hell of a lot of momentum with some of the biggest biotech partnering deals and M&A activity happening in that space. The real challenge is that there are only so many more $Bn blockbuster deals that can be done and the combination therapy space in immuno-oncology is incredibly challenging. Moreover, there are very real healthcare economic concerns about the quality-adjusted life years (QALY) “valuation” of many next-generation cancer drugs, especially when one considers the “layered” economics of combo therapies. Australia is not quite Britain but we have a very price-sensitive market, as seen by several recent-ish contentious additions to the Pharmaceutical Benefits Scheme (PBS). The US is really no different and is heading for a squeeze too.

For me, the big question is whether a LAG-3 me-too, acquired from a very small (and mostly irrelevant) French biotech company is really enough to put PRR back on the map? LAG-3 is undoubtedly an interesting target but it is not the centrepiece of the immuno-oncology world right now and considering PRR’s balance sheet, and the relative “non-novelty” of generating new antibodies and fusion proteins these days, it’s hard to see how IMP321 is going to really turn the company’s fortunes around. In this respect, I sort of tend to agree with Stuart’s anonymous antagonist – we need to see tighter positioning from PRR as to why their LAG-3 program is going to beat BMS (and others), and even why Merck-Serono passed on it in the first place (knowing the stupid things that big pharma sometimes do, this may or may not have an interesting answer).

If I had been the punter who bore the brunt of Stuart’s ire that fateful day, I would have responded as follows (in HotCopper orange, no less) :

Dear Stuart Roberts in Sydney,

We don’t need any more glowing immuno-oncology editorial reviews, you’re not an equities analyst anymore. I know it’s hard to let go, but you have to try.

Stu’ – please don’t try and sell us equities based on everyone else’s progress, tell us about Prima’s progress. What we need to see is something tangible that explains why Prima’s LAG-3 construct isn’t …er… LAGging behind the competition. MUC1/CVac is a dead horse, now we need to understand how LAG isn’t a nag.

Ok, I’ll stop there with the word games – now I am just being silly.

Nisi Dominus Frustra indeed…

Are you there, God? It's me, Stuart...

Are you there, God? It’s me, Stuart…

Hello from Stuart Roberts in Sydney,

An interesting biotech partnering transaction took place in Europe last week which I think is relevant to our company. Bavarian Nordic, a Danish cancer immunotherapy company (Nasdaq OMX Copenhagen: BAVA, announced that it had partnered its prostate cancer vaccine, called Prostvac, with Bristol-Myers Squibb (BMS), the world’s 17th largest pharma company. BMS is paying US$60m up front and up to $935m in milestones for Prostvac, which is currently in a 1,200-patient Phase III trial in metastatic castration-resistant prostate cancer (mCRPC). Prostvac is a ‘prime and boost’ vaccine that primes the patient’s immune response with a recombinant vaccinia vector and boosts it with a recombinant fowlpox vector, each vector carrying prostate-specific antigen and multiple T-cell co-stimulatory molecules. In plain English, it uses harmless viruses to carry into the patient’s body molecules that help the immune system attack the cancer. And it seems to work. In Phase II Prostvac increased overall survival in mCRPC from 16.6 months to 25.1 months (p = .0061), which is a big achievement in this disease condition. Importantly, the vaccine has been trialled in combination with Yervoy, BMS’s blockbuster checkpoint inhibitor drug, and seems to be synergistic with it.

What excited me about the announcement, beyond the fact that it showed yet again how interested Big Pharma has become in cancer immunotherapy, was some comments Jim Breitmeyer of Bavarian Nordic made to the industry magazine BioWorld at the time. Noting that Prostvac seemed to be synergistic with checkpoint inhibitors, Breitmeyer said, “We’re very excited about the BMS anti-PD-1 antibody, and we’re also interested in their anti-LAG-3 antibody.” LAG-3, as you know, is a target where we are arguably the world leaders through our Immutep programs, acquired late last year. What the BMS/Bavarian Nordic deal shows is that we are potentially onto something Big Pharma thinks is important from multiple treatment angles.

Not that that’s showing up in our share price yet. Okay, it was a little premature of me in my previous email to have claimed that we had fixed our Nasdaq ‘Bid Price Deficiency’ issue when the stock got to US$0.99 on Nasdaq on 27 February. What I can say is that we’re committed to making sure our new LAG-3-based story is properly marketed both in Australia and the US, and I believe that once we’ve done that the market will respond accordingly. In Australia I’ve already had a chance to get out on the road, and I want to send a big Thank You to everyone I talked with last week in Adelaide and Perth. There were a lot of Prima shareholders in the various meetings I attended and it was great to share the new Prima story with them. Thanks for all the intelligent questions and the feedback.

Which brings me to feedback. One of the joys of my job is hearing from shareholders and interested investors, but I prefer to hear from them in person, via email or over the phone, not on Hotcopper. On that forum recently someone addressed these words to me: ‘Global Head of Investor relations, Stuart Roberts, I have to let you know the quality of the presentation slides you had made is really atrocious. A high school student would be able to make a better presentation than that. It might sound harsh but this is the absolute truth’. Unfortunately the anonymous Hotcopper poster didn’t give any suggestions for improvement, which I would have benefited from. What that poster did go on to suggest was that I had made a mistake in reporting the average daily trade of the stock on Nasdaq, which he opined ‘would be in the region of 14,000-15,000, substantially lower than what you claim.’ That depends on when you calculate from. In February 2014 our ADRs turned over on Nasdaq at a daily average of around 380,000. This meant that the 12-month average we reported in our recent presentations was a lot higher than the 8,000-10,000 per day level of the November-December 2014 period. I can tell you that the average from 7 March 2014 to 6 March 2015 was around 45,000 a day. Hopefully we can get the current turnover back to this level and beyond once US investors understand where we fit in the exciting cancer immunotherapy space.


Stuart Roberts
Nisi Dominus Frustra
0447 247 909

Stuart Roberts
Global Head of Investor Relations
Prima BioMed
(Direct: +61 2 9276 1224
(Mobile: +61 447 247 909
Ê Fax: + 61 2 8569 1880
The content of this email, including any attachments, is confidential and may be privileged. The email is also for the personal use of the recipient(s) only. If you have received this email by mistake, please delete it and contact us. PrimaBioMed Ltd., 151 Macquarie St., Sydney NSW 2000, Australia.

2 thoughts on “No, I didn’t razz Stuart Roberts, but I wish I had…

  1. Pingback: Ah Prima… | The Long Tail

  2. Pingback: Prima Files a Patent | The Long Tail

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