More misleading guidance from Prima Biomed

Today Prima Biomed (ASX : PRR / NASDAQ : PBMD) announced that it had “received positive scientific advice” from the European Medicines Agency (EMA). Specifically, PRR claims that “after dialogue between Prima and the EMA, the Agency has now confirmed in writing its endorsement of the development program of IMP321 in metastatic breast cancer.


I have never heard of a scientific consultation with EMA resulting in a written endorsement, in fact it is strictly prohibited by EMA, so I would be extremely interested and excited to see that communication (which, of course, the company does not provide because it is generally regarded as a privileged communication and bad form to share publicly). Yet in the next paragraph, Prima goes on to say “While the EMA never endorses any statement on the likelihood of future regulatory decisions, the Agency’s communication has suggested that the achievement of certain clinical endpoints may lead to Marketing Authorization in the EU based on this one pivotal study.

Kinda sounds like a back-track, doesn’t it?

Suggested? What does that mean?

This is utter bullshit and here are the facts:

1) EMA, like all regulatory agencies, provides scientific advice and protocol assistance to companies on a fee-for-service basis. It is a fundamental and standard part of engaging with a regulatory agency in a particular jurisdiction, to minimise regulatory risk. It is nothing more than good practice to consult with EMA or the FDA in a non-binding, advisory fashion. In PRR’s announcement, evidently targeted at the retail investor given the low level of accuracy and high degree of noise factor, it has omitted to explicitly note that any scientific advice provided by EMA is paid-for advice. Given the strong level of claims made by PRR, the company would have paid at least €85,000 (s.1.2.2, less any possible fee deductions for being a small-cap company). By the way, if it is less than this, it means that the company asked for a truly cursory level of input and this press release is especially garbage.

2) The Agency does not initiate a scientific advisory process, nor does it usually comment on the suitability of a protocol, unless the protocol is an orphan drug protocol (which IMP-321 is not). It only gives prospective guidance on the basis of questions asked by the company. Therefore any and all claims of “endorsement” by PRR are, in all likelihood, false. Certainly they are not consistent with standard EMA scientific guidance principles.

3) As PRR has correctly stated (at the end of the release), any and all scientific advice provided by EMA is legally non-binding. Although there are plenty of examples of drugs that did meet the parameters of Agency advice, but were subsequently rejected, in general it is true that even non-binding guidance is considered qualitatively in a medicines review process. What is not correct, and is falsely implied by PRR’s press release, is that the probability of success for IMP-321 has increased. It has not. Therefore, in my strong opinion, this update to shareholders cannot be considered a price-sensitive event. Nothing has, in fact, changed.

4) PRR’s press release (paragraphs 3 & 4) comments on trial design and structure, and makes reference to a “suggested” likelihood of success from EMA based on this trial structure. Not only is this misleading to shareholders, but a Scientific Advice Working Party (SAWP) will not even endorse a set of meeting minutes as a summary of interactions with a company. Therefore any outcomes that PRR may have captured from its interaction with the Agency are strictly of its own interpretation.

The bottom line is this. I am tired of getting shonky clinical updates from this company. I am tired of a Board of Directors that obviously thinks all of its shareholders are a bunch of idiots. In a proper, grown-up company, a head of regulatory affairs would sooner get sacked than allow a press release like this to go out. It’s just a red flag to a bull, and it generates ill-will with the regulatory agencies. Scientific guidance from EMA or FDA is a privilege, and it’s value is only truly realised by management teams that intelligently and sensitively (and quietly) incorporate this advice and experience into their execution plan.

Unfortunately this is not Prima. This a company that is led by a very long-in-the-tooth board that is, to a first approximation, clueless about running a biotechnology company with any degree of integrity (I am still waiting for the CVac disaster to unfold) or any demonstrable respect for their shareholder base. Running a company to pump your stock on any possible occasion is not creating long-term value for shareholders or patients.

All it does is enable truly mediocre executives to hit their stock option vesting triggers, and nothing more.

10 thoughts on “More misleading guidance from Prima Biomed

  1. Prima share price movements are defying all logic.

    I read the announcement and thought oh dear share price down by 10% today. Why? PRR has to go back a step and complete a small safety run in study prior to being allowed to start the P2b Imp321 study.

    I had always assumed the earlier tox studies would be sufficient. Apparently not. And this will have the effect of pushing out the start date into next year.

    So 10% down? No 40% up on significant volume.

    I don’t understand why anyone is buying PRR at all at these prices. The KPGM report provides a very well researched valuation of PRR. It concludes that on the completion of the Ridgeback deal the estimated trading range is between 2.1c and 4.8c.

    But today people are lining up to buy at 8c.

    I have yet to see one thoughtful analysis of why KPMG got it wrong. I don’t think they have at all. This report is publicly available, the information and analysis is first rate (imo) and it cost many tens of thousands to produce.

    But basically no-one is interested in it. Its got me stumped – how does all this stuff work Chris?


  2. Hi Chris,

    I can only attribute this activity to the re-emergence of day traders in this stock.

    Any company that even obliquely implies the regulator is behind them is completely and utterly full of shit. The market, dealers and analysts should know this.

    Really, I thought we had stamped this crap out.



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