Agoracom

It is probably about time that I started posting over here, as I believe I can make a contribution.

There are many details with this company and to overlook any can cause a missed opportunity (IMO).

If you have not listened to the Cypress Bioscience conference call then I recommend that you do as there was a lot of information commented upon in the question and answer session regarding the CYPB --> Proprius --> ALRX relationship.

Note the webcast via Yahoo did not work for me but the 1-888 tollfree number did.

Here are some general observations, some came from the conference call others from SEC filings and the older Dutton report (note some of the amounts are from memory so are estimates):

• Cypress Bioscience (CB) purchased Proprius Pharmaceutical (PP) for $37.5 million and has $130 million cash remaining on hand.
• Proprius has an agreement with ALRX to develop Indaflex.
• CB has their own products and Minaciprin is being jointly developed and marketed with Forrest Laboratories a $13 billion (mkt cap)company.
• Proprius Agreement with ALRX
  • Global rights to Indaflex, which is a product for treatment of pain in Rheumatoid Arthritis, excepting Asia & Mexico (Indaflex is already being sold in Mexico as a topical pain reliever and receives royalties).
  • ALRX has received a $900K upfront payment.
  • ALRX to receive $3 Million upon completion of Phase II testing.
  • ALRX to receive to receive $116 million upon successful commercialization plus double digit royalties.
• CB well aware of Proprius / ALRX agreement and preferred not to comment during the conference call indicating too far in the future and would be speculating. After all a high percentage of new drugs never receive FDA approval.
• The CB / Proprius agreement states that a $20 million payment is due upon the first patient receiving a dose of PRO-406 (Indaflex) in Phase III trials.
• However pointed questions were asked by the Stock Brokerage firms attending the conference call, which included the likes of Merril Lynch.
• CB voiced the previous agreement amounts with ALRX and mentioned ALRX by name during the conference call.
• One broker was extremely knowledge about the CB --> Proprius --> ALRX relationship. I missed his name and company so if anyone listens to the call please let me know.

• Proprius was in charge of the Indaflex phase II testing, the endpoints were not met, and as a result Proprius did not have to pay a milestone payment. (Draw your own conclusions).
• Walsh the CEO of Proprius will now become the Chief Operations Officer (name ?) of CB. My guess is that he believes in what his company was doing and CB is receptive to similar goals and objectives, and can provide the funding to bring Indaflex to commercialization.
• The $20 million will pay towards Indaflex Phase III testing and any milestone payments due to ALRX and is specifically mentioned in the CB 8-K.
• Considerable thought has been given to this $20 million payment and how it was stated in the 8K, so that the potential of a 3^rd party licensing to a major pharmaceutical company is taken into account. (Mentioned specifically in the confernce call).
• ALRX has several other products in the drug pipeline that offer even greater opportunities than Indaflex plus 3 formulations with a major US pharmaceutical company.
• ALRX has a market cap of $13 million dollars. Hard to believe that a company would pay $116+ million plus royalties to a company that could be bought for $13 million. Along these lines CB mentioned in the call that they had more data requirements for phase II.

Anyway, a lot of information that needed to be summarized some place.

IMO there is a high likelyhood of a series of successful drugs from ALRX given that one is currently being sold in Mexico. Again IMO taking an existing drug, with an expired patent (not sure about a new drug), and reformulating it with a different delivery mechanism resulting in a new patent would definitely benefit the pipelines of any drug company.