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Multi-Billion Dollar Microcap Opportunity Hiding in A Dark Alley
Multi-Billion Dollar Microcap Opportunity Hiding in A Dark Alley
6/14/2016
Disclosures
This slide deck contains current opinions of Bigger Capital as of May 19 only and may
contain certain forward-looking information. Such information involves known and
unknown risks, uncertainties and other factors that may cause actual investment
results, performance or achievements to be materially different from those implied by
statements herein, and therefore these statements should not be read as guarantees
of future performance or results. All forward-looking statements are based on our
current beliefs as well as assumptions made by and information currently available to
it as well as other factors. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this slide deck. Actual
events may differ materially from current expectations. Bigger Capital disclaims any
intention or obligation to update or revise any forward-looking statements, whether as
a result of new information, future events or otherwise.
Bigger Capital and related entities own more than 10% of the company discussed in
this presentation. This micro cap stock is not suitable for the majority of investors. The
likely outcome of an investment is a loss of principal. Take our opinions with a grain of
salt. If you find yourself relying on our views to make an investment decision it means
you definitely did not do your homework about this situation. Please do not rely on
our views, instead use the information as a jumping off point to begin your own
independent due diligence.
Bigger Capital
Results Highlight
Making a high margin of safety, multi bagger potential, and simple to understand
bet on a company that has a better than a fair chance of finding a cure for
Alzheimers disease.
Our mission is to discover and develop precision medicine solutions for early detection
and effective treatment of neurodegenerative diseases, in particular Alzheimers
disease (AD) and amyotrophic lateral sclerosis (ALS).
PMN.TO
Price Per Share (PMN.TO, CDN)
1.4
1.2
1
0.8
0.6
0.4
0.2
0
10/2007
10/2008
10/2009
10/2010
10/2011
10/2012
10/2013
10/2014
10/2015
PMN.TO
1.4
1.2
1
0.8
0.6
0.4
0.2
0
10/2007
10/2008
10/2009
10/2010
10/2011
10/2012
10/2013
10/2014
10/2015
In early 2015, the company ran out of cash setting the stage for a
company reset on a stronger foundation with renewed focus.
In June 2015, the Board is reconstituted, Gene Williams becomes
its Executive Chairman, and Elliot Goldstein becomes Promis CEO.
In the summer 2015, the company raises $2 million followed by a
$1 million (CDN) round this spring.
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Elliot and I have worked together since the 1980's, and realize we make a very effective team. He
invested in one of my successful startups (Adheris), and I was on his Board at British Biotech, among
other things.
A few years ago we decided to make that partnership our sole focus. Drug development is a team
enterprise, and we make a good team.
When we created and ran DART, we realized that it would be a great deal easier administratively if Elliot
and I had a legal entity through which we could offer management services. That clarified issues like
reporting, accounting, ensuring that the client did not have to pay benefits, etc.
We quickly found ProMIS, and supported it for free for nearly a year, until we clarified the tremendous
opportunity and set on the path you know about.
Eugene Williams
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Making a high margin of safety, multi bagger potential, and simple to understand bet on a
company that has more than a fair chance of finding a cure for Alzheimers.
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High margin of safety. Really? IP of the company is worth more than its enterprise
value.
Lower strategic risk. Really? This companys computing algorithm provides a
rational framework for explaining why and how big pharma multi billion
investment research failed in moving an effective Alzheimers disease solution
across the finish line, and where the solution resides. This opportunity is a frugal
information arbitrage in that it uses its computing models and the results of tens
of billions of dollars of research to its advantage to move a solution across the
finish line resulting in a potential large payoff while avoiding a billion dollar plus
investment.
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Promis Algorithm
Collective Coordinates
Genus Patent on SOD-1 Protein (ALS)
Patents filed on 4 Amyloid Beta disease specific epitopes. 2 more filings are in the
pipeline. Promis believes a total of 6 epitopes will cover most of the Amyloid
territory.
Multiple Monoclonal Antibodies (MABs) that binds tightly to the epitope targets
and to forms of misfolded Ab, with no measurable off-target binding.
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Making a low risk, multi bagger potential, and simple to understand bet on a
company that has more than a fair chance of finding a cure for Alzheimers.
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The pharma industry has been attempting to target these errant proteins in hopes of stopping the disease
progression or even reversing it. Big pharmaceutical companies like Roche, Pfizer, Eli Lilly and Johnson and Johnson
did their best to come up with treatments based on an immunotherapy approach. That is, they developed antibodies
or antibody-like molecules that, once administered, would help to destroy and clear these errant proteins. Until late
last year, all clinical trials failed. However, at the end of last year, Biogen finally showed that such a therapeutic
approach can produce a sizable benefit to AD patients.
A gold rush is now underway to develop the most effective antibodies that would target these errant proteins,
particularly beta amyloid. This is where ProMIS Neurosciences with its proprietary ProMIS technology has a big
opportunity. ProMIS is a statistical thermodynamic algorithm that predicts how proteins degenerate into their
diseased (misfolded) forms and thereby provides a model of all the potential target regions of the protein (i.e.
epitopes) against which an antibody can be designed and produced. This approach would allow to develop a specific
therapeutic antibody and its related companion diagnostic, i.e. a precision medicine solution.
The ProMIS technology works and has been validated previously on many cancer types and neurodegenerative
diseases such as Creutzfeldt-Jakob disease. Of course, ProMIS is not the only method of identifying epitopes, and the
race to find such AD epitopes is very competitive and includes many pharma companies with formidable resources at
their disposal. ProMIS does however appear to have the advantage of being a theoretical and rational approach
to epitope identification while almost all other approaches are more trial-and-error/hit-or-miss.
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Confirmation
In article titled Alzheimer's researchers find clues to toxic forms of amyloid beta the
author states:
The actual structure of these soluble oligomers remains unknown
"The scattering experiment provided an indication of structure, and there is a
chance we can use this information to gain some structural insights," Raskatov
said. "We're pretty excited about that, because if we can understand the structure
of the neurotoxic oligomers, that could help efforts to design molecules to disrupt
them.
The bottom line is that Promis understands the structure of the neurotoxic oligomers,
and it has identified and created monoclonal antibodies that disrupt them.
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Seeking Partners for ALS SOD1 and TDP43. Promis has limited
resources and it must focus on its massive AD opportunity.
Seeking investors for Alzheimers Amyloid Beta and Tau to bring
the Promis solutions across the finish line to realize its multibillion payoff.
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The higher the potential upside, the more valuable the call options
becomes.
The time decay of a stock as an options is its burn rate minus the economic
value accreted.
The longer the maturity of the options the more valuable it becomes.
The more prone to information entropy (unexpected news) the more
valuable the options.
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Your assessment a
% probability of a distressed sale at $2.5
million.
A
% probability of an orderly sale at $13 million.
A
% probability of an exit at $50 million.
A
% of hitting the jackpot ($1 billion + after investment in the
drugs).
Sum this all up. What do you get? 1x, 2x, 10x, 50x?
With its enterprise value of $13 million and the quality of its IP
portfolio, I handicap this opportunity at a potential 25x to 50x
return. A very cheap options indeed.
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Catalysts
35
Recap
Thank You!
See end notes for more details.
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ENDNOTES
Slide 1 Inspiration for the framework used in this presentation comes from Chamath
Palihapitiyas Amazon.com presentation.
Slide 2 Slide 7 http://www.alz.org/downloads/Facts_Figures_2011.pdf.
Slide 15 News Release.
Slide 16 NOLs are used in the context of a valuation framework for illustration purpose
but they are rarely the source of biotech business focus.
Slide 17 Slide taken from 2015 annual report.
Slide 20, 21, 24 Source: Promis Neurosciences Presentation.
Slide 25 Source: Dr. Greg Kenaussis.
Slide 30 Source: Promis Neurosciences Presentation.
Slide 35 Source: Promis Neurosciences.
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Management Team
Eugene Williams, Executive Chairman
Eugene Williams is a former SVP at Genzyme, with senior roles integrating commercialization, drug development,
and deal making. He is also an entrepreneur, as the founder and director of Adheris, which became the largest
company in the patient adherence area. He was previously a strategy consultant at Bain and Corporate Decisions Inc.
(a Bain Spin off, now part of Oliver Wyman), where he was co-Head of Healthcare and spent extensive time on
speeding and improving the drug development process and on commercialization strategies. Mr. Williams was most
recently the CEO of Dart Therapeutics, an Orphan Disease drug development company. Mr. Williams holds a B.A.
from Harvard University and an M.B.A. from Harvard Business School.
Dr. Elliot Goldstein, President and CEO
Elliot Goldstein brings a unique track record in the clinical, regulatory and commercial development of new
pharmaceuticals. Dr. Goldstein began his career with Sandoz Pharmaceuticals (now Novartis), a fourteen-year period
on drug development in France, Basel, Switzerland Global Headquarters, including as Head of Clinical R&D in the
United States. He subsequently held positions as SVP of Strategic Product Development at SmithKline Beecham (now
GSK), CEO of British Biotech (Oxford, UK), Chief Operating Officer and Chief Medical Officer of Maxygen, and
President and CMO of a startup biotech devoted to development of biosimilar monoclonal antibodies. Dr. Goldstein
holds an M.D. from the University Aix-Marseille II, Marseille, France, and a B.Sc. from McGill University, Montreal.
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Scientific Team
Dr. Neil Cashman, Chief Scientific Officer and Co-founder
Dr. Cashman is a physician and scientist focused on neurodegenerative diseases. His first academic posting was at
Montreal Neurological Institute and Hospital of McGill University. From 1998 to 2005, he was the Diener Professor of
Neurodegenerative Diseases at the University of Toronto. In 2005, Professor Cashman moved to the University of
British Columbia, where he holds the Canada Research Chair in Neurodegeneration and Protein Misfolding Diseases,
and serves as the Director of the UBC ALS Centre. He has procured over $50 million in research grant funding from
the CIHR, CRC, NCE, NIH, and various corporations for his work involving protein misfolding and prion technologies.
He was awarded the Jonas Salk Prize for biomedical research in 2000, and was elected a Fellow of the Canadian
Academy of Health Sciences in 2008. He is recognized worldwide as one of the leading research scientists pioneering
the emerging fields of prion biology and protein misfolding diseases, in particular Alzheimers disease and
amyotrophic lateral sclerosis (ALS).
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