Is this another tangent move by NSP or a rather clever playoff...

Is this another tangent move by NSP or a rather clever playoff of one company against another in order to increase the capital value of PrIME Biologics? It is at least still very much on the same Singapore fractionating project.

The signed agreement with A-Bio Pharma appears definite for A$4.6 M with no escape clause on due diligence. When will the first S$3.5 M instalment be paid? These moneys are essential to commence any real physical build up of plant. Any delay just staggers the project.

The agreement is for a 10% holding in PrIME. To complete the build out NSP will have to find investors for another 30% to provide a total of A$18.4 M which should be sufficient to complete the project by latest estimates. (Some of the existing plant in the building is a real bonus.) Selling the last 10% will provide some badly needed capital for other NSP projects.

The key question is, which investors will provide the next 30%? One cannot generate revenue on half a completed plant. Management will have some other prospects up its sleeve. Unilab might be one and DCS Healthcare could possibly come in again. Performing negotiations with three or four parties simultaneously is a bit onerous. Would ABS be right out of the picture for a 10%? Perhaps Luye’s option for a second 10% is a backstop.

The more I think about the new direction the more I think it is do-able, and with control and IP left with NSP.

Clearly the negotiations with ABS had got firmly stuck. US$20M is a significant chunk of funding to part with all at once. Presumably, since ABS is in its first phase of establishment, it was the parent American company that was to provide the funds and perhaps they had other plans.

Is ABS now going to fade into the distance or will they at least provide some minor funds for the Sing facility? There is nothing new or definite in the final paragraph of the ASX announcement. It effectively says that, "We could still process plasma at some time for the Indian market."

Thanks for doing homework, Sydney. It is good to know of Luye Pharma’s $600 M market cap.

Juke