My thoughts regarding recent IPIX events and most
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Posted On: 02/18/2023 4:27:59 PM
My thoughts regarding recent IPIX events and most recent 10-Q filing:
Due to IPIX’s low SP and lack of funds, Leo has made a big bet on BeaMedical Technologies. IMO Leo decided that IPIX funds were not adequate to advance Brilacidin without additional significant shareholder dilution and chose to invest in BeaMedical as a more lucrative alternative funding source to better maximize shareholder value. To invest half of IPIX’s cash position ($4M of $8M in June 2022) seemed like a very high risk bet at that time and was not consistent with Leo’s frugal spending history. Leo seems to have hopefully done his due diligence on this investment as it appears to be rapidly gaining approval. On 11/28/22 BeaMedical received FDA clearance on 5 different wavelengths for a wide variety of medical specialties and are expected to soon submit for clearance of their fiber optics with the FDA. On 1/9/23 BeaMedical announced that they had formed a strategic partnership with Shina Systems who specializes in medical imaging platforms. This partnership is initially focused on revolutionary treatments for the epilepsy and brain tumor markets. Hopefully Leo’s timing was excellent on this investment with BeaMedical being cashed-strapped but with their technology positioned for rapid approval due to its technological uniqueness and market demand. There are several possible alternatives that Leo could be planning in regard to monetizing this investment for IPIX including some type of merger or simply selling BeaMedical shares as needed after an IPO. I have to believe that whatever Leo’s monetization strategy is, that he believes the initial $4M investment will return many multiples of that number and provide the needed cashflow for Brilacidin trials, decreasing the need to issue additional Outstanding Shares and thus minimizing any further dilution to IPIX shareholders.
IPIX OS count actually decreased from last quarter with Class A shares remaining at 488M and Class B decreasing by 11.3M shares from 15.6M down to 4.3M shares. There has not been any dilution of IPIX OS in the past 8 months or so.
Details of the above Summary:
I will comment first on what I consider the obvious negatives. Topping my list is the discontinuance of the Kevetrin program and writing off Kevetrin associated patent costs. My initial investment in 2011 in CTIX was based on Kevetrin which I believed had the potential to save many lives vs the current SOC. I have a hard time believing that there is no value in this asset, and I wish that Leo would have found another avenue to shave costs, perhaps a good faith salary reduction rather than reducing patent expenses. The other obvious negative is IPIX’s current SP which prohibits the ability to fund Brilacidin advancement. (As well as any of the other 8 compounds acquired from PolyMedix some of which are licensed to Fox Chase).
Any advancements in the science in the short term will need to come from outside resources including the FDA, DoD, Fox Chase, USP Brazil or Alfasigma. In the 10-Q there was reference to IPIX getting $238k reimbursement for Brilacidin manufacturing but it was not specifically tied to any of the partners mentioned above.
The recent registered patent approval filed by Subhash Dhawan for Therapeutic Swabs for Treating Upper Respiratory Infections, has some intriguing upside. Subhash has 25 years of experience at the FDA with his last position as “Senior Investigator and Chief, Viral Immunology Section, Laboratory of Molecular Virology, FDA”. (Try fitting that title on a business card and saying it out loud 10 times!) I am assuming that Subhash needed approval from Leo to include Brilacidin as part of the delivery patent and I am hopeful that this patent will help advance Brilacidin as a broad-spectrum antiviral and antifungal. I am assuming that an approval of therapeutic swab delivery using Brilacidin would lead to a nasal spray delivery system as well. Both the swab and nasal spray delivery versions of Brilacidin could be huge revenue generators for IPIX.
IPIX Cash on hand is low at only $2.4M but the upcoming projected 12-month budget is for $2M. I have to believe that Leo planned to halt any internal science advancement expenditures until IPIX could start to monetize its BeaMedical investment which so far seems to be advancing quickly. BeaMedical still had around $500k in cash and $3.1M short term investment which together accounts for $3.6M of the $4M of the funds that IPIX provided, so even though they were low on cash, their current spend rate is currently also very low.
I have greatly reduced my expectations for IPIX SP since the B-CV19 phase 2 failed to meet its endpoint goal. I had strongly believed that there was a very high probability for success in that trail but looking in the rearview mirror IMO that study was not in a good position to succeed. Firstly, for a patient to be hospitalized for covid they had to have gotten sick several days before being omitted. Every antiviral that has been tested that I am aware of has had its most positive effects very early in the disease cycle. The entire purpose of an antiviral is to reduce the viral load before it replicates to a point of danger where the patient needs to be hospitalized. Brilacidin has a very good safety profile, so it was showing effectiveness in Compassionate Use (CU) at a much greater dosage level then what was allowed in the Phase 2 study. Last but not least was frankly a bad decision to have a majority of patients treated in Russia who demonstrated terrible consistency of SOC across many sites making any meaningful statistical analysis nearly impossible. Hindsight is indeed 20/20. I still strongly believe that Brilacidin is a very valuable compound but the B-CV19 study was positioned vs a difficult targeted patient population, severely under-dosed and held in an extremely undisciplined location for an important clinical study.
Lastly, the hedge funds and market makers that criminally compress IPIX SP IMO still have a significant Naked Short Sale (NSS) position in IPIX. How much exposure is anyone’s guess but IMO the criminals covered up to half of their NSS position in the first 6 minutes of trading the morning of the November 2021 PR before any retail investors could get out. IMO most retail investors that wanted out had a couple of month window at around 6 cents from Nov 2021 PR thru Jan 2022. Most shareholders that I know are holding on to a majority of their position and a few brave and hopefully smart souls are buying at the current 2 cent range. The criminal hedge funds have won the battles to date. If BeaMedical turns out to be a winner and if IPIX or one of its partners (FDA, DoD, Fox Chase, USP Brazil, Alfasigma etc.) can advance Brilacidin to market, we could still own a profitable investment. Alfasigma is planning a large B- IBD-UP/UPS study 2nd half 2023. USP Brazil is studying Brilacidin as an antifungal agent. It boils down to execution and something significant needs to take place in the next 18 months or so. If the stars finally align on what has to date been a disappointing investment, shareholders might finally be rewarded. If certain events can be executed properly it could force the criminals to cover their NSS position which could have a very pleasant outcome that rewards shareholders who have demonstrated extreme patience.
Due to IPIX’s low SP and lack of funds, Leo has made a big bet on BeaMedical Technologies. IMO Leo decided that IPIX funds were not adequate to advance Brilacidin without additional significant shareholder dilution and chose to invest in BeaMedical as a more lucrative alternative funding source to better maximize shareholder value. To invest half of IPIX’s cash position ($4M of $8M in June 2022) seemed like a very high risk bet at that time and was not consistent with Leo’s frugal spending history. Leo seems to have hopefully done his due diligence on this investment as it appears to be rapidly gaining approval. On 11/28/22 BeaMedical received FDA clearance on 5 different wavelengths for a wide variety of medical specialties and are expected to soon submit for clearance of their fiber optics with the FDA. On 1/9/23 BeaMedical announced that they had formed a strategic partnership with Shina Systems who specializes in medical imaging platforms. This partnership is initially focused on revolutionary treatments for the epilepsy and brain tumor markets. Hopefully Leo’s timing was excellent on this investment with BeaMedical being cashed-strapped but with their technology positioned for rapid approval due to its technological uniqueness and market demand. There are several possible alternatives that Leo could be planning in regard to monetizing this investment for IPIX including some type of merger or simply selling BeaMedical shares as needed after an IPO. I have to believe that whatever Leo’s monetization strategy is, that he believes the initial $4M investment will return many multiples of that number and provide the needed cashflow for Brilacidin trials, decreasing the need to issue additional Outstanding Shares and thus minimizing any further dilution to IPIX shareholders.
IPIX OS count actually decreased from last quarter with Class A shares remaining at 488M and Class B decreasing by 11.3M shares from 15.6M down to 4.3M shares. There has not been any dilution of IPIX OS in the past 8 months or so.
Details of the above Summary:
I will comment first on what I consider the obvious negatives. Topping my list is the discontinuance of the Kevetrin program and writing off Kevetrin associated patent costs. My initial investment in 2011 in CTIX was based on Kevetrin which I believed had the potential to save many lives vs the current SOC. I have a hard time believing that there is no value in this asset, and I wish that Leo would have found another avenue to shave costs, perhaps a good faith salary reduction rather than reducing patent expenses. The other obvious negative is IPIX’s current SP which prohibits the ability to fund Brilacidin advancement. (As well as any of the other 8 compounds acquired from PolyMedix some of which are licensed to Fox Chase).
Any advancements in the science in the short term will need to come from outside resources including the FDA, DoD, Fox Chase, USP Brazil or Alfasigma. In the 10-Q there was reference to IPIX getting $238k reimbursement for Brilacidin manufacturing but it was not specifically tied to any of the partners mentioned above.
The recent registered patent approval filed by Subhash Dhawan for Therapeutic Swabs for Treating Upper Respiratory Infections, has some intriguing upside. Subhash has 25 years of experience at the FDA with his last position as “Senior Investigator and Chief, Viral Immunology Section, Laboratory of Molecular Virology, FDA”. (Try fitting that title on a business card and saying it out loud 10 times!) I am assuming that Subhash needed approval from Leo to include Brilacidin as part of the delivery patent and I am hopeful that this patent will help advance Brilacidin as a broad-spectrum antiviral and antifungal. I am assuming that an approval of therapeutic swab delivery using Brilacidin would lead to a nasal spray delivery system as well. Both the swab and nasal spray delivery versions of Brilacidin could be huge revenue generators for IPIX.
IPIX Cash on hand is low at only $2.4M but the upcoming projected 12-month budget is for $2M. I have to believe that Leo planned to halt any internal science advancement expenditures until IPIX could start to monetize its BeaMedical investment which so far seems to be advancing quickly. BeaMedical still had around $500k in cash and $3.1M short term investment which together accounts for $3.6M of the $4M of the funds that IPIX provided, so even though they were low on cash, their current spend rate is currently also very low.
I have greatly reduced my expectations for IPIX SP since the B-CV19 phase 2 failed to meet its endpoint goal. I had strongly believed that there was a very high probability for success in that trail but looking in the rearview mirror IMO that study was not in a good position to succeed. Firstly, for a patient to be hospitalized for covid they had to have gotten sick several days before being omitted. Every antiviral that has been tested that I am aware of has had its most positive effects very early in the disease cycle. The entire purpose of an antiviral is to reduce the viral load before it replicates to a point of danger where the patient needs to be hospitalized. Brilacidin has a very good safety profile, so it was showing effectiveness in Compassionate Use (CU) at a much greater dosage level then what was allowed in the Phase 2 study. Last but not least was frankly a bad decision to have a majority of patients treated in Russia who demonstrated terrible consistency of SOC across many sites making any meaningful statistical analysis nearly impossible. Hindsight is indeed 20/20. I still strongly believe that Brilacidin is a very valuable compound but the B-CV19 study was positioned vs a difficult targeted patient population, severely under-dosed and held in an extremely undisciplined location for an important clinical study.
Lastly, the hedge funds and market makers that criminally compress IPIX SP IMO still have a significant Naked Short Sale (NSS) position in IPIX. How much exposure is anyone’s guess but IMO the criminals covered up to half of their NSS position in the first 6 minutes of trading the morning of the November 2021 PR before any retail investors could get out. IMO most retail investors that wanted out had a couple of month window at around 6 cents from Nov 2021 PR thru Jan 2022. Most shareholders that I know are holding on to a majority of their position and a few brave and hopefully smart souls are buying at the current 2 cent range. The criminal hedge funds have won the battles to date. If BeaMedical turns out to be a winner and if IPIX or one of its partners (FDA, DoD, Fox Chase, USP Brazil, Alfasigma etc.) can advance Brilacidin to market, we could still own a profitable investment. Alfasigma is planning a large B- IBD-UP/UPS study 2nd half 2023. USP Brazil is studying Brilacidin as an antifungal agent. It boils down to execution and something significant needs to take place in the next 18 months or so. If the stars finally align on what has to date been a disappointing investment, shareholders might finally be rewarded. If certain events can be executed properly it could force the criminals to cover their NSS position which could have a very pleasant outcome that rewards shareholders who have demonstrated extreme patience.
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(1)Innovation Pharmaceuticals Inc (IPIX) Stock Research Links
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