Founder led - This is a big bet on the Exec Chair, Founder – Paul Rennie.

Could we organise a chat with him @Strawman?

Huge market – 72m Osteoarthritis (OA) sufferers in 2020, expect 120m in 2030 (5% Mkt CAGR). 81% are dissatisfied with current treatment. Targeting 10% of the market (not sure how achievable this might be). Dosage to cost US$2.5k per patient p.a. suggesting a US$14bn market opportunity.

Paradigm’s main product is a repurposed drug being trialed to address a huge unmet need - so the potential is huge but range of outcomes are wide.

As it’s repurposed, there is high confidence that the drug is safe (at a given dosage). This removes a huge potential risk at the Phase 3 trial stage.

As it’s unmet need, the "FDA has granted Fast-track designation to the OA program" – they want this to work and are happy to expedite (as long as it does).

Phase 2 trials have been positive in alleviating pain (key end point) and even improving the condition (improving cartalidge thickness).

Check out the Cap Raise Preso for more info - https://www.marketindex.com.au/asx/par/announcements/investor-presentation-30m-capital-raise-3A629518

Disc: Held (small 'research position')

Further to @GazD's updates and enthusiasm on the progress of Paradigm, I've had a look at their recent cap raise and here's my thoughts.

$35m Mkt Cap (@ $0.43 share price), before new shares issued.

Just raised $30m, fully underwritten (Est $28.5m after costs), but spent $22m in R&D in the Sep-23 Quarter alone!!

Now have $69.4m in cash @ Dec-23 to last to mid CY25 / FY25 (without additional licensing revenue).

Massively dilutive as it almost doubles their share count, and will increase shares on issue by > 1.5x if attaching options from Cap Raise are exercised within the year (expiring Dec-24 w Strike @ $0.65).

So, unless I am missing something they will need another funding injection soon I expect.

There are 3 possible sources for this:

1)   Potential partnering deals to provide material additional non-dilutive cash runway. They expect 1 or more in the next 6 months. I would expect the bargaining power to lie with the partner(s).

2)   Options issued in the Cap Raise, if exercised will raise A$33.8m... but only if $SP > $0.65 (51% above raise price of $0.43) by 30-Nov-24. This will require a very positive outlook – most likely based on Phase 2 & 3 trial progress / read outs between now and then.

3)   Another (thesis busting) capital raise...

If there wasn't such a massive potential here this Cap Raise would have been a thesis breaker for me (i.e. mgmt can't allocate capital well enough).

Disc: Held (just started a small 'research position')