Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
According to a UK website trialreach.com, the cx1739 SA trial is still recruiting subjects:
https://www.trialreach.com/explore?nft=cx1739&ft=sleep+apnea&co=&ag=1&ag=2&ag=3&st=1&st=2&phase=1&phase=2&phase=3&phase=4&phase=9999
The BB that led me to this website is:
http://www.britishsnoring.co.uk/phpBB2/viewtopic.php?p=11621
Amusingly, a prospective volunteer said he wasn't going to enroll because the 1000 pounds he would be paid paled in comparison to the many millions the biotech company running the trial was going to make.
>> Is there some aspect or contingency that I haven't thought about? Maybe, but nothing relevant comes to mind.
* cor management's reluctance to sell;
* if the partnership option fails, they will want to negotiate the company's sale with enough funds on hand to be able to obtain the best terms possible and 1M leaves them with very little margin of safety;
* absent a deal, this is their last shot at a PIPE since the terms will only get worse from here.
I think they will try to raise at least 2M. Too much more than 3M exposes them to takeover risk, and limits their future options in the event that cor survives this period.
I was taking the socratic approach to make the same point. I don't think it's sport though. There are plenty of people who post here who aren't investors who have a healthy/morbid interest in cor, and the difference between their posts and iggs' is usually pretty clear.
Jads are you expecting the PIPE announcement this friday or next? My sense is that the discount increases with the number of shares being offered. In light of this I expect 20-30 M shares to be allocated at ~$0.10.
What misery.
You didn't answer my questions. Are you still long on cor? If so, why?
I'm holding my shares because I think we go up from here. If I believed we were going down (as you do), I'd sell.
Are you still long on cor? If so, why?
Your $12 projection appeared here in 9 2007. The estimate assumed that the FDA was going to lift its ADHD hold, based on Neurology's approval of the AD trial. If the hold had been lifted, that projection could have been met. The only thing that interests me here is that at exactly the same time, Iggs was "buying heavily" (back then the verbal tick was "gents" as opposed to "lol" now... same pseudonym, different hack?)
I see two pink elephants separated by a blue moon...
Somebody's buying this POS, and Iggs is back. Good.
It's interesting that this stock is finding buyers. People have to dig a bit to find this stock, so it doesn't make sense that the buyer is completely uninformed, either about the science or the status of the company.
Compared with many investments, there is more certainty surrounding cor: in a matter of weeks, it runs out of money. This can be averted by a deal or a PIPE. Anybody who is buying now is betting against the PIPE and/or a total moron.
I agree with MaximAlexander that the IP is worth much more than share price would indicate. Counterparties interested in the IP probably don't want to see further share dilution, because it creates the possibility of a takeover, and a concomitant loss of the IP.
The best news I got from your report about the meeting had to do with the intangibles: you conveyed that none of the cor people had lost their fight. I like that, both because it's a necessary trait in times of adversity, and because it suggests that they do in fact have some prospects for partnership. Given that we're completely in the dark about just about everything, this is the only substantive piece for me, and an important one.
Horselover, thanks for going to the meeting and reporting back to us.
Without some developments to boost share-price, I don't see how the share expansion they've gotten improves their situation.
The sticking point here appears to be that cor is in negotiations with counterparties who are willing to wait until cor capitulates, and the money from a PIPE (at these share prices) isn't going to invalidate that strategy.
They can do a PIPE @ $0.10 to generate the funds to complete the SA trial (assuming the end of December date is credible), but I'm not sure that will change the dynamic. I just hope they can drum up other partners, and that they are sufficiently proactive about having a fall-back option (M/A) in place if/when the outlicencing negotiations fail.
True...there's the tricky issue of the shares outstanding. The fact that this prospectus goes out before the share increase is voted on suggests either a level of confidence about the vote outcome that makes one a bit cynical about the voting process, or once again, ready-fire-aim incompetence, or (as has been most typical for all cor PR issues) a mixture of both.
This may be part of the ongoing effort to dress the turkey:
http://www.officialwire.com/main.php?action=posted_news&rid=47746
"The profile examines the company's key business structure and operations, history and products, and provides summary analysis of its key revenue lines and strategy as well as highlighting the company's major recent financial deals."
May they find a buyer.
"bad data" is ill-defined here: even if there was a positive trend, with an n this small, the trend is unlikely to be statistically significant, hence technically, this would constitute bad data. With the same n, if there is no trend or a negative trend, it would nonetheless be indistinguishable from the good "bad data", since both would fail to reach statistical significance. I think burying it would not be legally actionable. The only consequence is that SA would not be a factor in valuation discussions.
The concern here is selective disclosure of a positive trend in the data. My hunch is that with an n this small, with a condition that arises from such a diverse set of causes, it is at least as likely that the data are uninterpretable. In this event, if cor takes an in-house peak, and sees nothing promising, wouldn't it make sense for them to put the lid back on it, and leave all outside parties in the dark?
More generally, I just hope that this saga will be winding down by Q1 '10. The only upside here now is that the whole thing will likely soon be over.
Despite the potential value of the IP, I think cor is toast. It has no cash and no sufficiently late-stage trials/compounds to secure an out-licensing agreement.
It keeps getting bought, but the sum total of shares transacted so far today only represent $16K. At these prices, it's worth the gamble, particularly if you can use any losses to offset gains at tax-time.
Are people done voting? Is anyone keeping a tally? FWIW My 60K said No.
Did it fall out of an 8' box?
I just voted no on the share extension. I don't see a deal happening next week, and I don't see a way forward with this management. I'll be happy if cor liquidates at $0.30 / share.
My condolences to all of you who, along with me, have lost money on this. An expensive education.
>> What keeps getting missed in this PIPE scenario is the fact that any large dilution would risk someone taking control of the company.
This hasn't been missed, since it's been raised repeatedly during the very high trading volumes we saw in late summer.
I don't think that the entity/entities buying this stock up were either retail investors, or institutional investors with any great faith in cor as a company. They may recognize the IP is worth more than share-price would indicate, but that's about it. They may be in it for a quick double that ensues from a sale that they engineer. A more interesting scenario would be one where they force the sale to an entity that they designate, that they have a big stake in, at a fire-sale price.
Aside from the fact that I've managed to loose my life's savings with cor, the thing that has been particularly hard to bear has been the tedium, as we've turned blue holding our breaths (bad pun) for the RD results, then the RD deal, then the SA results, then the 30-45 days, etc. with nothing ever happening. Although it is possible (and based on what they've done in the past, even likely) that they can continue this course of leeching all the value out of the company through a continuing series of increasingly futile dilutive financings, my sense is that the people who have been buying these shares may have something to say about what happens next. I very much hope that at the very least, it gets less boring.
I've lost my shirt in this too. I bought based on the science, and know some of the people who have carried out studies with ampakines. The science is good.
It's not a scam, it's a trainwreck.
A smart player could make cor an offer now it can't refuse. I don't think the IP is worthless. If the only thing they had was RD, it would warrant a share-price well above where we're sitting. The IP is going to be picked up by someone.
Whoever is trying to do this doesn't have to try very hard. The sum total transacted in cor today ~=$22K.
I hope that MV is open to the idea of a platform-wide low-impacts deal with a BP. That would be a quick way of reversing this company's declining fortunes, and allow cor to focus on its strengths: drug discovery and preclinical trials. They'd get revenues from the low-impacts, but the company would emerge with its research focussed on the high impacts.
This scenario is far from ideal, but would bring in more than the liquidation that appears currently to be the most likely outcome.
>> a 1 for 10 reverse split would reduce the fully diluted share count ... down from 105 mil to 10.5 mil
This means that even if they get a no vote on share expansion, they can do a PIPE if they first do a reverse split.
Basically, unless they do a deal, or reconcile themselves to sell the company, cor management is going to screw retail investors by a PIPE and/or reverse split + PIPE, irrespective of the vote on share expansion.
What happens to PIPE warrants in the event of a reverse split?
Not only do I think it a farce that it's trading at $0.16, I also think that ampakines have enormous potential that easily justify a $10 shareprice.
Leaving aside SA, which I think is a very tricky indication to target, I see the big cash generators for anyone who starts to seriously develop low-impact ampakines as being:
treating RD associated with post-operative analgesia
treating RD associated with chronic pain management
treating ADHD
treating early AD
All of these are doable.
>>>Could you list some examples of "counterparties" that based their "upfronts" on a companies market cap?
No I can't; turning that around though, can you list any deals in which the upfronts were equivalent to ~50% of a company's market cap, for a relatively early-stage study of a single compound for a single indication? The guy sitting across from MV is going to be thinking along these lines, and MV has to know that a deal with up-fronts <$5MM isn't going to do anything for cor's share-price or prospects.
A broader deal will be a hard sell for MV, since the money it would cost to inlicence cor's whole low-impact platform is getting close to the price of the company as a whole.
My basic sense is that the current conditions constitute a trap. It is possible to envisage a way out of the trap, but it would require luck and skill.
My post-mortem on cor is that their failure has been a consistent inability to accurately estimate the value of their IP to interested counterparties. I am convinced that the lack of a deal over 10 years reflects their unwillingness to part with even a piece of their IP for less than what they perceived as its fair value.
Now that we're in the end-game, I think the opposite is happening. Cor needs a deal that will allow them to survive, but counterparties are looking at cor's market cap and basing their upfronts on that. Because such a partnership would not change cor's trajectory, but only complicate an eventual sale/merger, cor management can't do it.
The hard part for cor management is that they know what the value of the IP is. Without question, this stock should be trading at >$10. They'll be lucky to see a share-price of $0.10 when the curtain finally comes down.
An expensive learning experience.
I hope so. Doubling the number of shares issued in the absence of a deal is beyond stupid.
Further, our willingness to vote against a share increase wouldn't have had an impact on the deal, because most people looked favorably on increasing the pool of shares if a deal were done. Insofar as they care at all about any of this, I hope that evidence that at least some (and potentially a large number) of shareholders are prepared to vote against this proposal forces them to look at options that are more in current shareholders interest.
A couple of things: first, if MV was truthful about the CC on friday, tnen his unwillingness to speak to you Monday might also have had to do with the fact that the deal has fallen through; leading him to be distraught about the outcome rather than angered at the breach of confidentiality. Let's hope they're still in talks. For me, if in a week there's no deal, I'm assuming the deal fell through. Time will tell, but my gut tells me that they weren't able to close the deal.
Second, I don't think positive money flow reflects retail buying, since retail investors entering and leaving this stock should cancel (in fact the number of people leaving should swamp the number buying). Accumulating this stock now, in light of a likely reverse split, is nuts, unless the buyer has the intention of gaining enough shares to be able to have some say regarding the future of the company. Throughout this period, I've suspected that the pattern of buying we've been seeing reflects a takeover strategy. It's hard to reconcile positive money flow with anything else.
So this is more consistent with my original idea of a PR campaign that wouldn't make much sense near the close of a successful partnership negotiation (since it would make more sense to amplify the partnership news), but would make sense to drum up interest in the wake of a failing negotiation.
Oh well...
On the side of paranoid optimism, the Yahoo mirror of the WSJ MV interview has a box in which cor is compared to the following stocks: cephalon, lilly, shire. These aren't obvious as similar companies, but certainly are obvious as partners.
Because MV didn't seek out the WSJ interview, my interpretation of the significance of a PR effort in the absence of news is completely beside the point.
>>Of course the other question is whether there will be a deal
The longer this goes on, the less likely a deal is. Based on Varney's comments in September, partnership discussions appear to have been well underway. The counterparty knows of how urgently cor needs to get something done before the share-expansion vote, and cor itself has to be very motivated. If, despite these factors, there still is no deal, it suggests that an agreement couldn't be reached. There are good reasons for why a deal could fall through: as cor's share-price declines, its leverage decreases, and the size of the up-fronts shrink as well. If the final offer from the other party isn't enough for cor to have a realistic path forward (<$5MM), then it would be very difficult for MV to agree to these terms, since a sub-par deal would have little or even a negative effect on share-price, and as we approach single digits, even a bad deal/PIPE combo isn't going to generate enough capital to generate the funds that cor needs to have a realistic chance of going forward.
I don't quite know what to make of MV's recent PR efforts. If he were finalizing a deal, my sense is that it would have made more sense to provide a PR update with the partnership news as part of the information. I doubt WSJ is going to give MV another interview on the heels of the recent one once a deal gets done. My conclusion is that the PR activity is regain some forward movement in the wake of a failed deal.
I've pretty much stopped hoping.
OT, but perhaps of interest:
Mother of all carry trades faces an inevitable bust
By Nouriel Roubini
Published: November 1 2009 18:44 | Last updated: November 1 2009 18:44
Since March there has been a massive rally in all sorts of risky assets – equities, oil, energy and commodity prices – a narrowing of high-yield and high-grade credit spreads, and an even bigger rally in emerging market asset classes (their stocks, bonds and currencies). At the same time, the dollar has weakened sharply , while government bond yields have gently increased but stayed low and stable.
This recovery in risky assets is in part driven by better economic fundamentals. We avoided a near depression and financial sector meltdown with a massive monetary, fiscal stimulus and bank bail-outs. Whether the recovery is V-shaped, as consensus believes, or U-shaped and anaemic as I have argued, asset prices should be moving gradually higher.
But while the US and global economy have begun a modest recovery, asset prices have gone through the roof since March in a major and synchronised rally. While asset prices were falling sharply in 2008, when the dollar was rallying, they have recovered sharply since March while the dollar is tanking. Risky asset prices have risen too much, too soon and too fast compared with macroeconomic fundamentals.
So what is behind this massive rally? Certainly it has been helped by a wave of liquidity from near-zero interest rates and quantitative easing. But a more important factor fuelling this asset bubble is the weakness of the US dollar, driven by the mother of all carry trades. The US dollar has become the major funding currency of carry trades as the Fed has kept interest rates on hold and is expected to do so for a long time. Investors who are shorting the US dollar to buy on a highly leveraged basis higher-yielding assets and other global assets are not just borrowing at zero interest rates in dollar terms; they are borrowing at very negative interest rates – as low as negative 10 or 20 per cent annualised – as the fall in the US dollar leads to massive capital gains on short dollar positions.
Let us sum up: traders are borrowing at negative 20 per cent rates to invest on a highly leveraged basis on a mass of risky global assets that are rising in price due to excess liquidity and a massive carry trade. Every investor who plays this risky game looks like a genius – even if they are just riding a huge bubble financed by a large negative cost of borrowing – as the total returns have been in the 50-70 per cent range since March.
People’s sense of the value at risk (VAR) of their aggregate portfolios ought, instead, to have been increasing due to a rising correlation of the risks between different asset classes, all of which are driven by this common monetary policy and the carry trade. In effect, it has become one big common trade – you short the dollar to buy any global risky assets.
Yet, at the same time, the perceived riskiness of individual asset classes is declining as volatility is diminished due to the Fed’s policy of buying everything in sight – witness its proposed $1,800bn (£1,000bn, €1,200bn) purchase of Treasuries, mortgage-backed securities (bonds guaranteed by a government-sponsored enterprise such as Fannie Mae) and agency debt. By effectively reducing the volatility of individual asset classes, making them behave the same way, there is now little diversification across markets – the VAR again looks low.
So the combined effect of the Fed policy of a zero Fed funds rate, quantitative easing and massive purchase of long-term debt instruments is seemingly making the world safe – for now – for the mother of all carry trades and mother of all highly leveraged global asset bubbles.
While this policy feeds the global asset bubble it is also feeding a new US asset bubble. Easy money, quantitative easing, credit easing and massive inflows of capital into the US via an accumulation of forex reserves by foreign central banks makes US fiscal deficits easier to fund and feeds the US equity and credit bubble. Finally, a weak dollar is good for US equities as it may lead to higher growth and makes the foreign currency profits of US corporations abroad greater in dollar terms.
The reckless US policy that is feeding these carry trades is forcing other countries to follow its easy monetary policy. Near-zero policy rates and quantitative easing were already in place in the UK, eurozone, Japan, Sweden and other advanced economies, but the dollar weakness is making this global monetary easing worse. Central banks in Asia and Latin America are worried about dollar weakness and are aggressively intervening to stop excessive currency appreciation. This is keeping short-term rates lower than is desirable. Central banks may also be forced to lower interest rates through domestic open market operations. Some central banks, concerned about the hot money driving up their currencies, as in Brazil, are imposing controls on capital inflows. Either way, the carry trade bubble will get worse: if there is no forex intervention and foreign currencies appreciate, the negative borrowing cost of the carry trade becomes more negative. If intervention or open market operations control currency appreciation, the ensuing domestic monetary easing feeds an asset bubble in these economies. So the perfectly correlated bubble across all global asset classes gets bigger by the day.
But one day this bubble will burst, leading to the biggest co-ordinated asset bust ever: if factors lead the dollar to reverse and suddenly appreciate – as was seen in previous reversals, such as the yen-funded carry trade – the leveraged carry trade will have to be suddenly closed as investors cover their dollar shorts. A stampede will occur as closing long leveraged risky asset positions across all asset classes funded by dollar shorts triggers a co-ordinated collapse of all those risky assets – equities, commodities, emerging market asset classes and credit instruments.
Why will these carry trades unravel? First, the dollar cannot fall to zero and at some point it will stabilise; when that happens the cost of borrowing in dollars will suddenly become zero, rather than highly negative, and the riskiness of a reversal of dollar movements would induce many to cover their shorts. Second, the Fed cannot suppress volatility forever – its $1,800bn purchase plan will be over by next spring. Third, if US growth surprises on the upside in the third and fourth quarters, markets may start to expect a Fed tightening to come sooner, not later. Fourth, there could be a flight from risk prompted by fear of a double dip recession or geopolitical risks, such as a military confrontation between the US/Israel and Iran. As in 2008, when such a rise in risk aversion was associated with a sharp appreciation of the dollar, as investors sought the safety of US Treasuries, this renewed risk aversion would trigger a dollar rally at a time when huge short dollar positions will have to be closed.
This unraveling may not occur for a while, as easy money and excessive global liquidity can push asset prices higher for a while. But the longer and bigger the carry trades and the larger the asset bubble, the bigger will be the ensuing asset bubble crash. The Fed and other policymakers seem unaware of the monster bubble they are creating. The longer they remain blind, the harder the markets will fall.
The writer is a professor at New York University’s Stern School of Business and chairman of Roubini Global Economics
Copyright The Financial Times Limited 2009. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web
I guess the good news here is that a stock can't assume a negative value.
Soon this misery will be over, one way or other. Absent a deal, it's not obvious what they new shares are going to do for them.
I'm sorry about the fallout this has brought upon your relationship with MV, but am heartened by the common sense he is demonstrating by discontinuing the back-channel communication.
The only thing that matters here is that he closes a deal. He's been worrying about pain-management in a patient bleeding to death.
I have no beef at all with you posting this stuff here. In general, I'm in favor of greater openness, and I appreciate the apparent interest in maintaining communications with investors. The problem here is that MV appears to have no understanding about how to protect or maintain his credibility. If, as neuro pointed out, taking a conference call from a CEO counterparty is a routine component of these negotiations, then what does it say about MV that he offers this up as semi-tangible evidence of an imminent breakthrough? Is he cynical, stupid, or naive?
Cumulatively, all of this is leaving an increasingly bad taste in my mouth: the predicted disclosure of SA data (rescinded--discretion is the better part of valor); the stupid 30-45 day guarrantee (watered down by the even stupider not-counting-weekends qualifier); announcement of a request for massive share dilution on the rationale that this will provide leverage; then this nonsense about a phone call that can be divulged because it means nothing.
With share-price at <$0.20, MV should realize that investor-relations will require more than the trivialities being discussed here. Unfortunately, I'll be very surprised if, following the phone-call today, a deal is announced early next week. That's what should happen, but my experience with this company says it won't.
Another thing: money flow is good. Does that reflect retail investor confidence in cor as a stock, or the actions of an institutional investor who wants to take control of cor so as to walk off with the IP?
I'm surprised that everybody's fine about Varney leaking this information. It's unethical if it's false, illegal if it's true, and because it could adversely affect the very deal being negotiated, not very helpful. If one can glean anything from this, it appears that cor is in serious negotiations with one party only. If this is so, given cor's general condition, anything that could queer this deal should be avoided.
I consider this a more serious blunder than disseminating Varney's personal email address at cortex, and it wasn't made by a poster to a BB, but by a CEO.
I think that the parties who bought the BAM shares will vote for it, because they will be able to accumulate a controlling stake in the company.
I don't think they're buying the shares for the bounce on an eventual deal. I think they're interested in getting control of the IP.
The premise here is that they can do an end-run around the poison-pill. I don't know the details on that and would be grateful for this information.
If the BAM buyers say yes, the vote will pass.
>>I suspect my non-Cortex information sources are probably a little better than yours.... I know parties that have been interested--but I have zero information as to where any ensuing discussions went after that.
Thanks for the clarification.
>> That conclusion might be yet be reached if they have either no data or negative findings by the time they run out of cash, if they do. Otherwise, you have no basis for it.
I'm not sure what you mean here, but my take is that they have no data, and have run out of cash.
>> Your other points leave out the fact that negotiations revolve around valuation, and valuation is a lot tougher when there are events hanging in abeyance.
There are always events hanging in abeyance, and valuation may be difficult, but it still can be done, particularly when you don't have the funds to go forward.
I see selling the company as a lousy option that must be pursued because other better options have not been realized. The apparent PIPE/reverse-split trajectory that cor is currently on is worse.
>>...and that they could say so in partnering discussions.
If a little canary is telling JerryDylan that cor management is meeting the boss of the main candidate for a partnership today, allowing a public BB to be apprised of this factoid of dubious truthyness, then the same little canary can tell that boss that he'd better make a move, or another interested party is set to buy the whole thing. The problem with this approach is that nobody is going to believe what the canary says because so much of what it has been saying is going to happen hasn't happened.
You've got a bad analogy and a mixed metaphor going on here. Even with a very good lure, fish don't jump on board.
The real problem with your argument is that BP isn't a fish, BP isn't edible, and cor has several indications that are good partnerable indications so it's not obvious why SA (non-life-threatening, requiring chronic treatment, ...) would be such a game-changer. Cor's problem is not a dearth of clinical and pre-clinical data. Cor's problem is that it is broke, and this changes how counterparties deal with them.