Arbutus Biopharma Corporation (ABUS)

[Ron1303]

TKMR as I see it

The recent Past

When in January 2015 I marveled at the TKMR-OnCore deal, two things called my attention:
1.- No TKMR principal had been in deals over 1 billon (vs the 11 billon Pharmasset deal).
2.- How quickly OnCore was moving. The # of deals that had been done in 6 months (in contrast with the speed of things @ TKMR).
I felt that that perhaps that was one of the reasons TKMR´s M.M. seemed to have fallen head over heels for the OnCore proposition.

In the previous months TKMR had been sucked into the Ebola hype, & on Nov 10th, 2014 Glaucus Research, a fairly unknown outfit, with a supposed emphasize in shorting asian scam situations, initiated "coverage" of TKMR https://glaucusresearch.com. Made no sense to me...

The following weeks a series of negative articles suddenly started popping up, some of them explicitly using the Glaucus coverage. In combination with these articles something strange happened. One of them seemed to always get "stuck" at the top of the relevance button in the TKMR profile @ finance.google.com. In one instance, for more than a month after publication this negative article remained there "numero one" as if it were a triple crown winner. To this we can add unpleasant TKMR coments by Jim Cramer.

So, when the merger was announced the price was in the $14-15 range.

I had learned about TKMR in July 2014 from a biotech info service I followed for a year.
The opinion about TKMR was extraordinarily good & was written by one of the partners of this service.
With time I saw that there was stuff I liked @ TKMR & stuff I disliked.

I liked the low float, the high amount of cash, the variety of drugs, the seriousness, the extraordinary technology & potential.

The stuff I disliked was the attitude towards the stock market & the lack of communication skills.

TKMR made this fantastic share placement aprox @$28 in 3/14 & then it felt like: "Hey, that´s all the cash I need. See ya stockmarket when I need some more $$. Call me, but I might not answer, I´m busy".

Another manifestation of M.M´s limited communication skills were some very demotivational PR´s (though the intention was the exact opposite).

July @ IR is the walking & talking reflection of this limited style.
Last, but not least, has been M.M.´s horrible Jefferies 2015 Healthcare Conference presentation.

The Present

We have a depressed share price that does not correspond to the amount of shares in the hands of institutions, insiders (www.finviz.com). Add to this some 4-6 millon retail shares (my guess).

The # of shares short has more than doubled since 31/12 & now stands at a record 4.8 millon shares (http://www.nasdaq.com/symbol/tkmr/short-interest).

TKMR is a Co. where the CoB is 29 years old & the CEO/President is 66 years old.

This in itself a generational mismatch & will be an issue of internal confrontation.

Last week´s AXON IPO has shown that the CoB-CEO style differences are even further appart than the age difference.

On one hand we have a stiff & honest CEO -with a righteous streak- that takes a dump on the market & only shows up when he needs some more moola.

On the other V.K. a a razor sharp whiz kid who is a smooth operator, who seems to enjoy playing a fast & furiouse character & milk the market for what it´s worth & then some more for Momma & family.

V.K. is so sure of himself that in the AXOM interview he gave Cramer a little bone in public by telling him that he was asking "the right questions".LOL !!

The Future

IMO the pressure is rising in the pressure cooker.

Shares were sold to institutions @ $20.25, offered to insiders for $17.75 & yet our share price has collapsed & has been stagnating in the $13-$15 range for the past 1 1/2 months.

This is a negative on Murray because he just does not seem to care about the stock market or the share price.

IMO Murray believes that his personal integrity & his management & scientific dedication are more than enough.

OTOH there are parties interested in keeping the share price low, principally because they want to buy TKMR "cheap".

Perhaps not $13 cheap but perhaps $20-30 cheap? If the market can be puffed up the way AXOM has, why can´t TKMR be puffed up to $ whatever...at the right moment ??

If you bought for $20.25 & it immediately fell to $13 -as it has- &, say, a party offers to buy you for anything above your buying price you will accept, especially if you see an internal conflict in the Co. where an outcome is unclear.

Variations on this theme "show me the money" is what I think are cristalizing quickly.

What could derail this conflict brewing inside TKMR is if TKMR earns 1, 2 or 3 $$ vouchers or the announcement of some unexpected big discovery or FDA approval.

As long as Murray does this "I don´t care about the stock price or the market" - and no new cash is infused into the Co or rabbit brought out of the hat, he will continue digging his grave. And we will have to deal with a collapsed share price...

Murray has to start paying attention to the share price & the market. This can´t be to difficult to do. For him it seems difficult, but its part of a public Co.´s CEO job description.

If things remain as they have, Murray will continue alienating investors & weakening his hand. When push comes to shove with the CoB, and it will come to that if things don´t change, he will be out.

AXON was just an appetizer for Vivek. CoB has the resources -in the bright side & in the "other side"- to do his thing, & he will.