Versartis, Inc. (VSAR)

[RisingProfit]

Director bought shares $2M.

[LQMTinvestor2018]

Last time we dropped this low we went back up to 2.25 after, was there a reason for that increase? New investor, just curious.

[longx]

It's the whole market, not just VSAR.
An opportunity for adding more shares.

[LQMTinvestor2018]

Buying opportunity?

[RisingProfit]

Why is it lower today? No news.

[longx]

Cash is king when the markets are volatile.
Being traded at $1.80/share way below its total cash asset of $3.95/share (or $2.49/share after liabilities), investment in VSAR is definitely safe. Today with the Dow dropped over 1000 points and a decent trading volume of 560K share, but VSAR remained unchanged, and will stay at this level even the Dow drops another 3000 points to 20,000 level.

I hope that the last 3 months should be long enough for Versartis management and Cowen to able to find suitable candidate for merge/acquisition/or private investment for maximizing shareholders value, and they will make the announcement in the upcoming E/R. If not, then simply dissolve the company and distribute the cash back to shareholders.

It's not a good idea to continue the search for another quarter unless they're able to limit the cash burn rate under $2M/quarter.

[longx]

why not just increase dosage?

Analyst at Cantor Fitzgerald explained that it's because new dosage will require additional trials, ultimately this will delay commercialization and potentially diminish the company’s advantage over competitor Ascendis.

A copy of the original text:
"Although we believe these pivotal data are insufficient to support approval, we believe that optimizing for a higher dose administered more frequently could achieve the range of activity to demonstrate non-inferiority,” analyst Elemer Piros wrote in a note.

An additional trial would be needed, ultimately delaying commercialization and “potentially diminish[ing] the company’s advantage over competitor Ascendis Pharma A/S"
https://www.benzinga.com/analyst-ratings/analyst-color/17/09/10089620/versartis-somavaratan-still-has-a-path-forward-cantor-r

[LQMTinvestor2018]

I have yet to do more research but why not just increase dosage?

[LQMTinvestor2018]

Yea from what I’ve read that’s where I’m assuming we may be headed.

[longx]

From the clinical results Somavaratan is working, it's just that it's not as good as Pfizer's Genotropin (9.44cm vs. 10.70cm). Since Genotropin is used daily, Ascendis's TransCon is used weekly, but Versartis's Somavaratan is used only twice/month.

Perhaps Versartis technology/IPs and existing cash resources could be valuable to it's former rival/competitor, Ascendis? Given the rise of Ascendis' marketcap in the last 3 months (currently valued at $1.89B), I guess a $300M worth of stock swap for Versatis to be merged with Ascendis, would translate Versartis share price to almost $10/share, and it's highly doable for Ascendis.

https://www.benzinga.com/analyst-ratings/analyst-color/17/09/10089620/versartis-somavaratan-still-has-a-path-forward-cantor-r

[longx]

The whole market is in red today; XBI down over 3% and IBB over 2.5%, but VSAR is in black (unchanged). I would say it's a great blessing if you have large portion of your cash invested in VSAR recently.

[longx]

We'll know if my estimate unrealistic or not in the upcoming ER, which is supposed to be on Tuesday (02/20/18).

I still maintain my original estimate of Q4/17 cash-burn rate to be within $5 -> $7.5M and the amount of cash left (after liabilities) will be around $2.35/share.

The figure $2.19/share was the most pessimistic figure based on simply 2/3 workforce reduction and nothing else done to preserve the cash. I don't believe this would be the case given management's swift decision in reducing workforce immediately right after clinical failure. While many other biotech companies out there would typically keep the company going on for months or even years and wasting the company cash resources.

[longx]

He’s been wrong the whole way down

Not only him, but over 100 other big guys (institutional investors) out there like Blackrock, Perceptive Advisors, Vanguard, JP Morgan made a costly mistake wrong for purchasing millions VSAR shares when the stock being traded in the teens.

But keep in mind that it's very rare for those successful/smart investors to make the exact same mistake twice.

https://finance.yahoo.com/quote/VSAR/holders?p=VSAR

[ERICBOCKEM]

What are some your picks besides Vsar with exploring alternatives?

[LQMTinvestor2018]

That is my thinking and my whole reason for getting into this stock. It shows something is coming where my thinking is maybe a buyout?

[RisingProfit]

Is there an explanation for a Director buying 1M shares at $2M, other than maybe a good deal ahead? Just asking, not an argument.

[humonstick]

If someone knows and points out your unrealistic estimate minimum redistribution to stockholders must be a short? Please spare everyone's common sense. Not sure if you noticed but you just slap yourself in the face by saying redistribute as of Dec 2017 might be $2.19 but just a few messages earlier you also claim the redistribution is AT LEAST $2.35. I still think you estimate cash burn is still low and there is more cash burn since December but there is no need to get into anymore details. FYI - My main investment/trading focus is actually buying these depressed stocks in terms of cap and equity. The majority of them are exploring alternate strategies.

[sportd]

He’s been wrong the whole way down

[longx]

Just placed another order for 40K shares.
-------------------------------------------
Buy 40,000 Shares Limit $1.70 Expires on 04/09/2018 11:46 AM 02/08/2018 Good Until Canceled Reinvest Dividends: View/Edit Order#: 41694759

[longx]

I just purchased 28.5K shares:
2/8/2018 9:30:02 AM ET VSAR Bought 1008 VSAR @ $1.8 Executed
2/8/2018 9:30:02 AM ET VSAR Bought 1124 VSAR @ $1.8 Executed
2/8/2018 9:30:02 AM ET VSAR Bought 102 VSAR @ $1.8 Executed
2/8/2018 9:30:02 AM ET VSAR Bought 475 VSAR @ $1.8 Executed
2/8/2018 9:30:02 AM ET VSAR Bought 3284 VSAR @ $1.8 Executed
2/8/2018 9:30:02 AM ET VSAR Bought 389 VSAR @ $1.8 Executed
2/8/2018 9:30:02 AM ET VSAR Bought 850 VSAR @ $1.8 Executed
2/8/2018 9:30:00 AM ET VSAR Bought 21268 VSAR @ $1.8 Executed
How about you're going to short a few K shares and we'll come back here in the next 2 weeks after the E/R?

[longx]

The following are clearly stated in the last ER (Q3/2017):

- The VISTA long-term safety study in pediatric GHD (300 participants) will conclude at the end of October.
- Further clinical development of somavaratan in AGHD (30 participatns) is on hold.
- J14VR5 Phase 3 study in Japan is being discontinued
- Completed reduction in work force of approximately two thirds and further cost-cutting measures underway to preserve cash.
- Select members of management team retained to leverage clinical, regulatory, and commercial expertise in the evaluation of somavaratan and efforts to identify opportunities to diversify the Versartis pipeline
Cowen engaged to assist in evaluating possible strategic transactions that could maximize the company's expertise and resources

Management is obviously working hard on winding down business operation to perserve cash, so my highest estimate of the max cash burn in the last 3 months (Q4/2017) could be 1/3 of the average cash burn in the last 4 quarters, or around $30M/3 = $10M or $0.30/share.

So in case of the worst scenario (merger/acquisition not happen), they still have $2.19/share cash for shareholder distribution.

If you really believe that the stock being traded at this level is way overvalued, then you should short the stock, post a screen dump of the transactions and for every share you short I'm going to buy 3 shares (as long as the stock price is still under $1.90), and I will do the same by posting the screen dump of my transactions. Please do so as soon as possible to make this happen.

[LQMTinvestor2018]

I’m new to this stock and got a relatively small position, but if a board member spends this much money based on “nothing” we know about on here maybe there is a possibility of a buyout? Just thinking out loud but I just don’t see why a board member would risk that much money without knowing something is coming? Also in their last PR some of the higher ups got pay increases.

[humonstick]

It is convenient for you to have the desire to cherry pick only the numbers and ways fit the picture that you wanted to paint. It is amazing you can claim of having at least $2.35 redistribute back to shareholders using balance sheet numbers and incomplete low estimate burn rate. When one points out your incomplete but extremely low estimate burn rate, you decide to focus on balance sheet only while you know full well the unbreakable correlation and important of the balance sheet and estimate burn rate. The fees and time required in relation to liquidation will only exist upon liquidation, so of course it doesn’t exist now. I’m not sure what % of the cash equivalents equity burn rate is considered significant to you but anything over 10% of the ~89 mil is significant to me. Tell me again your estimate amount of the cash burn for Oct-Dec’17 as compared to $49 mil loss less non-cash loss for the Jul-Sept’17 quarter? Since all you need to know whether the stock is a no-brainer based on board/mgmt transactions, this is enough to know the need to weight your words like the wind.

[RisingProfit]

VSAR should update shareholders.

[longx]

if Versartis Chairman of the Board spent over $2M acquiring shares at over $2.10/share then it's definitely no-brainer buying at this level.
Thanks!

[longx]

Convenient for you to exclude R&D expenses. The September quarter alone was 42 mil (correct, not 4.2 mil). The R&D for the December quarter is likely to be less but also likely to be meaningful % to equity. Yes, there will be R&D expenses per last earning announcement.
"All ongoing clinical trials of somavaratan will conclude by the end of 2017"

I was talking about the 10-Q Balance Sheet. R/D expense was not a part of the balance sheets, but it's listed in the 10-Q Statements of Operations. But if you really understand the data on the balance sheets, you would know that that R/D expense was in fact already included in the accumulated deficit. The point I tried to state in the post was that Versartis balance sheets became much more solid after the announcement on 01/08/2018. After $40M (or over $1/share) to be removed from liabilities and added to cash assets.

R/D expense in Q3/2017 @ $42M was the all-time high due the clinical trials closure. This same expense in the previous quarter (Q2/2017) was only $28.6M, and in the same Q3/2017 was only $20M.

Regarding to the cost for the ongoing clinical trials; there are only 2 left administered by Versartis: The VISTA trial which comes which 300 participants and the other AGHD which comes with only 30 participants. However, in last E/R, Versartis management stated that "... the VISTA long-term safety study in pediatric GHD will conclude at the end of October; further clinical development of somavaratan in AGHD is on hold." (BTW, a copy of this text can be found under Corporat Update section via this link), given this, the clinical cost should be insignificant.

Professional fees for strategy alternative is not free. Keeping the lights on and people sitting in their desk are not cheap.

Versatis management definitely has done a great job in preserving the cash by immediately reducing 2/3 of workforce and keeping only key management positions for the transition. Given the number of employees reported last quarter at 59 (see this link), assume that those employees making $15K/month, then the cost for paying 20 employees in the last 3 months should be under $1M.

Liquidation will take significant amounts of time to complete and will incur a lot of professional fees for various area, penalty charges for various early contract termination, reserve set aside. The $2.35 cash liquidation value is a puffy dream.

What's a clumsy exaggeration! Did you really take a look at the balance sheet before writing this? Versartis assets are mostly in cash, the only asset which is not easily liquidated is equipments property listed at $861K, which is just insignificant compared to the total asset of $135M. With the small number of employees and only one drug in pipeline, those fee/penalties you mentioned/concerned are almost non-existing!

Since Somavaratan is still an effective drug (it's just that it's not as good as Pfizer's Genotropin), the possibility of the company to be dissolved and led to cash distribution is still very small. So, I'm looking forward to seeing the merge/acquisition to be announced before or in the upcoming quarterly E/R.

Versartis' Somavaratan Still Has A Path Forward; Cantor Reiterates Buy
https://www.benzinga.com/analyst-ratings/analyst-color/17/09/10089620/versartis-somavaratan-still-has-a-path-forward-cantor-r

[humonstick]

Convenient for you to exclude R&D expenses. The September quarter alone was 42 mil (correct, not 4.2 mil). The R&D for the December quarter is likely to be less but also likely to be meaningful % to equity. Yes, there will be R&D expenses per last earning announcement.
"All ongoing clinical trials of somavaratan will conclude by the end of 2017"

Professional fees for strategy alternative is not free. Keeping the lights on and people sitting in their desk are not cheap. Liquidation will take significant amounts of time to complete and will incur a lot of professional fees for various area, penalty charges for various early contract termination, reserve set aside. The $2.35 cash liquidation value is a puffy dream.

[slowmover]

Thats very good dd. tks for sharing.

also the $2 million buy from one of the director near company cash per share level.

high probability for good profit continuing holding this.

[longx]

It's just unbelievable that someone is selling their shares at this level. I wonder if they really know how to read the company latest balance sheet? ... they're basically they're throwing away their own money.

Below is a copy of the balance sheet from the most recent 10-Q (click this link] to view in detail):

ASSETS: (as of 09/30/2017)
- Cash and cash equivalents: $118.783M
- Other assets: $7.836M
- Build-to-suit lease asset: $8.952M
TOTAL ASSETS = ($118.783 +$7.836 +$8.952) = $135.571M

LIABILITIES: (as of 09/30/2017)
- Accounts payable and other current liabilities: $40.903M
- Upfront payment from collaboration partner: $40M
- Build-to-suit lease obligation: $5.428M
TOTAL LIABILITIES = ($40.903 + $40M + $5.428) = $86,331

So the total amount of cash left after total liabilities would be:
$135.571M - $86,331M = $49.240M

However, according to the recent 8-K form filed on 01/08/2018 (click this link to view), which is clearly states the following (please pay attention to the text highlited in bold):

On January 4, 2018, Versartis, Inc. (the “Company”) received notice from Teijin Limited (“Teijin”) that Teijin was, pursuant to the agreement’s terms, terminating the Exclusive License and Supply Agreement among the Company, Versartis GmbH, a subsidiary of the Company, and Teijin, dated August 5, 2016 (the “License Agreement”), effective as of January 31, 2018. The notice of termination followed discussions between the Company and Teijin regarding the failure of the Company’s Phase 3 VELOCITY trial to meet its primary endpoint during which the Company and Teijin determined that continuing with the License Agreement was no longer in the best interests of either party.

Under the License Agreement, the Company had granted to Teijin an exclusive license to develop, use, sell, offer for sale, import and otherwise commercialize, in Japan, any pharmaceutical product incorporating somavaratan (VRS-317). In exchange for such rights, the Company received an upfront payment of $40 million from Teijin, and could potentially have also received up to $125 million in development, regulatory and sales milestone payments, in addition to transfer pricing and a royalty calculated on net sales in Japan. The termination is not associated with any early termination penalty or any further payments by either party.

Based on this agreement "The termination is not associated with any early termination penalty or any further payments by either party", Versartis will not have to return this $40M upfront-payment they received from Teijin when signing the deal. Therefore, this $40M of cash is now no longer under the liabilities section, and the total amount of cash Versartis currently having should be: $49.240M + $40M = $89.240M

Given the total number outstanding shares (as of 09/30/2017 from the 10-Q report mentioned above) = 35,809,311 shares,
The amount of cash per share = $89,240,000/35,809,311 = $2.492/share

Also, in the last earning report (click this link to view), under Corporate Update section, you should find the following text:

- Completed reduction in work force of approximately two thirds and further cost-cutting measures underway to preserve cash
- Select members of management team retained to leverage clinical, regulatory, and commercial expertise in the evaluation of somavaratan and efforts to identify opportunities to diversify the Versartis pipeline
- Cowen engaged to assist in evaluating possible strategic transactions that could maximize the company's expertise and resources

With 2/3 work-force reduction and the majority managegement position eliminated, the most cash burn during the current quarter, should be within $5M or around $0.14/shares, then the cash per share still at around $2.35/share

So, for the worst case scenario which is Cowen was not able to find any M/A target, Versartis to be dissolved and the cash to be redistributed back to shareholders then we would receive around $2.35/shares in the upcoming E/R announcement.

GLTA!

[carbonfiltered]

Manipulation, share price is meaningless until we get an update. Fact is we know they have at least $3/share in cash.

[sportd]

1.70 hitting AH wtf is with this stock.

[carbonfiltered]

No worries brother, not necessary, I think I’ll have a chance to get some by Friday, let’s make some dough and have a drink!

[longx]

Got 207 and still had 293 to be filled, buddy.
If the merge to be announced before 03/16 at the price above $7.50/share. I promise to to give you 20 contracts :)
VSAR MAR 16 2018 2.50 C 207 0.25 +56.25% 5,175.00 +1,863.00 +1,920.96

[longx]

Got 207 and still had 293 to be filled, buddy.
If the merge to be announced before 03/16 at the price above $7.50/share. I promise to to give you 20 contracts :)
VSAR MAR 16 2018 2.50 C 207 0.25 +56.25% 5,175.00 +1,863.00 +1,920.96

[carbonfiltered]

Buddy if you get 500 options contracts at 15 bucks apiece, and we get word of a partnership, reverse merger or a buyout and I believe you’ll be able to retire. I can’t put a bid in until Friday, I’m all tapped on liquid.

[longx]

I got only 7, and still have 493 to be filled... :(

[carbonfiltered]

About 1000 options contracts just got filled on that dip as well, someone is really accumulating a boatload of shares, I was able to get 25 contracts only.

[longx]

Good volume everyday and share price remains stable between $1.95 -> $2.20 in the last two months.
Hopefully, a merge/acquisition to be announced very soon.

[carbonfiltered]

This is trading like a company is buying shares on the bid.... accumulation for a buyout if you ask me.

[BluSkies]

Any theories on why they don't have the pipeline up on the website anymore? I can't find it.

[Cody6]

Who’s playing games with 1 share bid whacks!

[BluSkies]

VSAR Looking Bullish

[sportd]

Why so much dumping at bid on this stock, I’ve watched for awhile and it’s one of the stranger ones

[carbonfiltered]

Someone is heavily accumulating. There’s a reason this hasn’t dropped below $2, I’m not sure what it is but someone definitely has been loading. Maybe a buyout, partnership, etc...

[loup]

This may in fact be good news. They may have a buyer and they dont want to go down on the previous terms because the buyer may want to pursue Japan on their own with a bigger payoff

[sportd]

Must not be bad news cause hasn’t sold off in AH

[naturalborninvestor]

Well, it says partner in Japan terminated the agreement. So, no Somavaratan in Japan either. Thought the japanese trial was still active, no?

Item 1.02. Termination of a Material Definitive Agreement.

On January 4, 2018, Versartis, Inc. (the “ Company ”) received notice from Teijin Limited (“ Teijin ”) that Teijin was, pursuant to the agreement’s terms, terminating the Exclusive License and Supply Agreement among the Company, Versartis GmbH, a subsidiary of the Company, and Teijin, dated August 5, 2016 (the “ License Agreement ”), effective as of January 31, 2018. The notice of termination followed discussions between the Company and Teijin regarding the failure of the Company’s Phase 3 VELOCITY trial to meet its primary endpoint during which the Company and Teijin determined that continuing with the License Agreement was no longer in the best interests of either party.

Under the License Agreement, the Company had granted to Teijin an exclusive license to develop, use, sell, offer for sale, import and otherwise commercialize, in Japan, any pharmaceutical product incorporating somavaratan (VRS-317). In exchange for such rights, the Company received an upfront payment of $40 million from Teijin, and could potentially have also received up to $125 million in development, regulatory and sales milestone payments, in addition to transfer pricing and a royalty calculated on net sales in Japan. The termination is not associated with any early termination penalty or any further payments by either party.

[sportd]

Yup I don’t think they’d do that if someone was buying them
Maybe selling certain assets

[naturalborninvestor]

Now termination of license and supply agreement. Really thought this still had a chance, but looks like winding down slowly.

[sportd]

VSAR has taken all their “PIPELINE” off their site at least mobile version. Nothing regarding their products.