@Tom73 nice initial thesis.

There are two other aspects of $PAR and iPPS that stand out for me: i) the multiple phase 2 trials conducted to date and ii) the range of potential outcomes.

1) Phase 2 Studies

There were multiple Phase 2 studies (5) conducted, including 4 that were placebo controlled. Now, of course, they had low numbers being Phase 2, but in aggregate across the series, there was a consistent positive effect - albeit variable, due to differences in the design of each trial and highly uncertain due to the wide confidence intervals, likely due to small sample size as well as inter-trial variablity.

In dosing, screening criteria, and endpoint specification $PAR have taken somewhat more care than is usually the case. Albeit, I recognise that has been at the expense of considerable pain for long term shareholders. (Hence my preference to hop on during Phase 3 and preferrably, late Phase 3 as a general rule).

Of course, the placebo-effect in pain treatments can be significant, so we won't know how it scales into Phase 3. But it does seem pretty clear to me that there is a positive signal there, at a meaningful level - although this is a gut feel only - I can't put a p-value on it, if pressed. So perhaps - therefore - "pretty clear" is overstating things!

2) Potential Outcomes

The interim milestone is, of course, not the end of the game. However, I think that August is pivotal for the company.

In the Bear Case, the results are muddy, and there is no basis to continue the trial. All the options are well and truly out of the money, and we'll see a raise again before long. I don't know what the investment case is in that scenario, and I will probably exit to recover anyhting I can, given that anything is better than nothing! We could easily see the SP collapse to a few cents pretty quickly.

In the Bull Case, with the Interim Endpoint met, meaning drug has shown a large enough and statistically strong enough treatment effect at the halfway point to support an early efficacy conclusion. It would materially de-risk the programme, validate the Phase 2 signal, and likely shift investor focus to regulatory pathway, full safety package, NDA preparation and commercial value. On re-risked fundamentals, the shares become worth a lot more than they are today, and - of course - that might well attract the usual hype flows in addition.

There is of course quite a bit of ground in between, where the Interim 112 Day Endpoint is questionable, between the thresholds of "futility" (i.e., abandonment) and "significant efficacy". I haven't figured out what that does to the SP, although I guess that depends where on the "futility" to "significant efficacy" continuum the result actually lies and the SP on the day. I plan to do some further work on this over the next couple of months, because there is a real possibility of the market mispricing a result that is in the "grey zone". My hunch on this is that on a risked basis the shares are currently undervalued, and so if the IA Endpoint indicates that the trial remains live, then arguably, the SP should re-rate upwards, closer to fair value on a risked basis.

So that can offers an important decision point. For example, the market response to an indeterminate Day 112 result could be quite negative, which could push the shares significantly below fair value on a Risked Basis, in which case there is a decision to make on whether to stay, go, lighten or load up.

Finally, in all outcomes, there will also potentially be further information on safety - a potential further complication.

My Conclusions

The deeper I have gotten into this one, the more I've realised that it is far from binary, at least in the short term. Yes, there is a possibility that the "futility" threshold fails to be passed, in which case the thesis is broken and iPPS is likely abandoned. But on the strength of all the Phase 2 results, I guesstimate the likelihood of that is only 20-30%,

To simplify, I see the potential outcome probabilities as follows (more based on "gut feel" that rigorous analysis!!)

• "Trial is futile": 20% - 30%. Trial abandoned. SP crashes.
• "Keep Going": 50% - 70%. IA Result not strong enough to warrant early trial completion, but also not weak enough to abandon, so the trial continues to final analysis
• "Stops Early For Efficacy": 10% - 20%,

I imagine "Keep Going" will generate a potentially strong SP response, because the positive potential of this outcome will be communicated strongly. The nature of the market response to this scenario governs whether an investor can - should they wish to - increase their position size in a way that makes sense as valuable decision on a risked-basis. In thinking this through, the penny dropped that this is possibly why they have structured the capital raising, and Option Pricing in the way they have. It makes sense to me when viewed in this way.

Which leads me to my position size. I have to have enough so that the "Stops Early For Efficacy" yields a meaningful prize, because from where we are today $PAR would easly 5x to 10x in short order, while equally being able to live with my position essentially going to zero in the "Trial is Futile" scenario.

My work on valuation has to help me decide at what SP I should not buy more, in the case we get a "Keep Going" result. "Trial is Futile" speaks for itself, in terms of investment implications!

Anyway, I'm just thinking out loud here, but that's how I'm currently thinking about this one. For sure, shareholders of $PAR live in interesting times, indeed.

Disc: Held (0.6% RL for now - weighing up some more)