I'll apologize right off the top for this. I put together some thoughts on the weekend but I don't have time to read current posts so I am going to post my thoughts anyway.

GAC’s excellent Bloom & Burton Notes May 3rd, 2018

Zenith....

Trial(s)

GAC - I asked about Zenith....and he went on at length about trials, speaking glowingly.  I didn't focus in on the details because I don't own any Zenith shares. 

My question – Isn’t there just one trial – zen3694 with various versions e.g. with & without enzalutimide?

Zenith Buyout

GAC – He (Don) left me with the impression that Zenith is going to be bought out in the next few months, like 2 or 3

My questions

1) GAC, did Don mention the $10 million “pre IPO” private placement?

·       If not then there has been a 180 degree change of plans. mmmmmmm…. me thinks Don’s Easter bunnies, Santa, elves, etc may be playing tricks on Don????

2) What is Don selling …all of Zenith Epigenetics, zen3694 or a cluster of related mCRPC compounds? If he is selling Zenith Corp then that includes Zenith Capital which includes all of the RVX royalty payments?

3) What does Zenith have to sell?

·       zen3694 is in trial with enzalutimide with mixed results and 3 patients doing quite well. (a trial update is in order)

·       2500 compounds

·       patents???

·       scaffolds???

·       proprietary processes???

·       years of epigenetic research experience???

·       other I.P. ???

Observing BPs over the past few years I’ve come to the conclusion that they have become very conservative in terms of buyouts even though the press seems to say biotech stocks are currently hot. As I recall Pfizer bought 50% of enzalutimide for US$14 billion only after it had been a SOC drug for mCRPC for a few years. RVX is a prime example with apabetalone near the end of the BoM trial. They have a rosuvastatin + apabetalone patent through 2029 or beyond. Crestor is losing it’s patent protection. Where is AZ or any other BP that wants to play in this CVD segment vis-a-vis RVX? I believe Don is in crisis mode going back into debt with a vulture fund just to limp to the end of BoM and yet he remains cool.

Unless there is something very significant about the zen3694 trial that we have not been made aware of I seriously doubt what Don has said to be true. My impression is that it is the same as the AGMs which are generally near Xmas or at the start of the new year Don knows he won’t have to face confrontation for another year so he makes up a story (like LOIs which we can’t check) and as it were “sprinkles in a bit of hope” knowing full well he will not be taken to task for a full year. Once again this raises the credibility issue re Don.

I suppose that value is a continuum so if the pps is $0.50 Zenith might be a good purchase but I would not be happy.

·       From koo

·       Remember this......what happened since then?

·       "Wednesday, May 18, 2016 
Zenith Epigenetics Corp. closed a $24.56 million private placement with its lead investor, Eastern Capital Ltd., by pricing 24.56 million common shares at $1 apiece. For starters, the funds will finance a phase I trial of the company's pan selective BET (bromodomain and extraterminal domain) inhibitor, ZEN-3694, in the lead indication of metastatic castrate-resistant prostate cancer (mCRPC)."

The good news to me is that Don never seems to be too stressed and this seems to imply he’ll get things done.

However, I can’t help but think that some of the big shareholders like Eastern who hold millions of shares will want some evidence of their ROI sometime in the reasonable future.

To my recollection Hepalink does not own Zenith shares. They might be a buyer given their close relationship with RVX perhaps they might jump in?

Also there could be buyers other than BPs for Zenith such as similar biotechs doing similar research for whom Zenith may provide a leap forward.

Well, at the end of the day if Don gets $30/share for zen3694 I’d be moderately happy (and stunned, amazed,etc).

Back in 2013 in the spring when spinco was developed I had made to following assumptions:

1.      Don, Dr Wong and the board saw value creation in splitting their compounds based on very broad indications such as vascular diseases and cancers.

2.      Also, this would protect Zenith assets from failures at RVX (ASSURE) and it did to some extent although I think the combined perceptual equity and credibility declined.

3.      So back then I assumed that ASSURE would be a success and drive RVX shares up (hence become a viable source of funding).

4.      I assumed Zenith was set aside for long term development after RVX became a success with apabetalone on the market generating royalties and buyout options for apabetalone. Well, it may happen and we are close enough to taste it. But we are not there yet.

Hence, Don inferring that Zenith may be bought out soon suggests to me he sees Zenith as a very long journey that is better to pass along to someone else to develop.

A couple of the compelling aspects of cancer trials is that they can be relatively short and safety standards can be lower.

Publication

GAC - .....also about a publication that's forthcoming that will be very positive. 

My perspective – If peer reviewed that is great news if it indicates that zen3694 does indeed do what I believe it was intended to do and that is, as I recall, make enzalutimide effective for a longer period that it currently achieves. This, to me, has economic value in and of itself to Pfizer but beyond that may be proof of a powerful MOA that fights certain cancers on it’s own or in conjunction with current SOC drugs.

Just like Resverlogix I still think the science is very hopeful and possibly breakthrough. The peer reviewed paper will lend further credibility to the science.

My overall conclusion regarding Don’s comments re Zenith is that it is all fluff but I thank you for flushing him out.

As always I hope I am wrong but I have been around many years and seen Don’s style and I don’t think there will be any buyout soon. We’ll see.

GLTA

Toinv