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Is it a coincidence that over the last year when the feds stepped up their investigation of Interactive Brokers for illegal shorting practices Adxs' short interest was largely covered. How about in addition to their measly fine they compensate for Adxs' now higher cost of capital and hundreds of millions of dollars in market value lost (or better split the repayment between O'Connor, Lombardo and entities like Interactive Brokers who took advantage of O'Connors incompetence by stealing from the company).
The other thing Dan did not do was act ethically or in the best interests of ADXS shareholders.
Hard to tell who ADXS will choose as partner for HOT and what the upfront cash payment will be. ADXS could have some bargaining power with Amgen if Amgen is one of the parties interested in HOT since both NEO and HOT are entering small cell lung cancer into the clinic. Amgen may be motivated not to let a competitor nab global rights for HOT if it will compete directly with NEO.
Depends on how much upfront. Hopefully at least on par with Amgen deal ($40m) which could help get us back to the $7 to $10 range.
Fair point, but Amgen entered the NEO deal paying $40 million upfront based only on preclinical data (similar to what we have for HOT now) so if there's enough interest in HOT now, a BP may want to lock in the rights rather than waiting (like Amgen did for NEO).
I think we will see a partnership, likely on HOT, before the need for further dilution. ADXS states directly in its most recent corporate presentation "in discussion with multiple parties." Worst case scenario is none of these parties is willing to make an upfront payment to ADXS. Unlikely considering the Amgen deal included $40m upfront. More likely Berlin is negotiating the highest value deal among all parties at the table on HOT. Let that sink in. Good things to come.
Chemist, I agree completely. The facts of the matter are that investors recapitalized the company under Dan O'Connor pouring more than $200 million at a weighted average cost of around $12 from 2013-2017. Fast forward over four years, O'Connor wasted most of that money through lack of fiscal discipline, weak strategy, misplaced focus on lining his own pockets not tied to his performance and doing so using less than ethical means, all enabled through poor governance by the BOD. Now investors who paid $12 have seen their value shrink by nearly 90%, watching a reactionary BOD fire O'Connor too late and without having a succession plan, which cost investors that much more by putting in place a temporary "retired" ICEO, then finally reality hit with the new CEO cutting 25% of the workforce due to the unsustainable reckless cash burn O'Connor put in place. The new CEO spoke honestly and directly to the market saying the program, AXAL, that O'Connor put the majority of the $200 million raised was an older technology that may be shelved if the company couldn't find a paying partner and that NEO and HOT were much higher value added and the company's new priority was to focus on them in a rapid cost efficient way. It's not hard to see why the market and investors have very little confidence in the company at this point given the past management missteps.
On a brighter note, I think Berlin is making the right moves to turn things around. At this stage, the company needs to strike a non-dilutive, accretive BP deal to restore value, because the cost of capital/i.e., price investors now require to put more money in the company is the worst ever because of O'Connor's performance. The science and platform is still very promising, despite the history of management incompetence. If Berlin can show the validity of the platform by striking a deal on AXAL or HOT with upfront cash, we should be back up toward $10 given how low and undervalued we are now.
Batermere, yes, O'Connor's misguided strategy and misaligment padding his own pockets at our expense is the reason the company has lost so much value. The Board was forced to act too late but didn't have a succession plan, so Lombardo's fumbling exposed just how poor of a situation O'Connor left the company in. I knew Dan was a bad egg and acted unethically to undermine shareholder interests and was vocal about it, but (in hindsight) I made the mistake if not selling. I'm still optimist about the potential of the platform, but from a business standpoint the vast amount of money Dan wasted on misguided effort burnt trust with imvesotrs (the all time low $2 offering for the company to raise cash is proof). Hopefully Berlin will turn things around and so far hes made the rights moves and shown by his cost cutting he's not just in it to showboat himself among New Jersey politicians like Dan did hiring and spending prematurely as Berlin's focus is on a return on capital/our capital funding the company.
Keith, unfortunately O'Connor gave away rights for AXAL to all of Asia to a company called Global Pharm as I recall, and we got $0 upfront cash AND Global Pharm has not even initiated any trials it's been four years. This may be why the company is having a hard time getting a partner, because Dan already gave away rights to half the world for AXAL in very weak deals.
It's fair to conclude from Dan's track record he set the bar extremely high for his personal compensation initiatives yet extremely low for the value created for his investors. I've been pleased with the changes Berlin has made so far given the mess he inherited. He is making the right moves to change direction and create shareholder value, but it's taking time given the money wasted and investor trust lost. The platform's promise has remained strong, which is why the story is far from over IMO.
Island, I initially appreciated your optimism and empathy towards what shareholders have gone through supporting the company across poor and misaligned management bringing us to where we are today, but in reading your recent posts wishing for reverse splits and sub $1 prices, your agenda has become more transparent. It's just a reminder and conformation to myself why it's good thing I haven't been visiting the board much recently.
Good news is you are free to sell tomorrow if you are that worried they will shelve AXAL in a few weeks.
"Advaxis, Inc. is a late-stage biotechnology company focused on the discovery, development and commercialization of proprietary Lm-based antigen delivery products."
Yes, that company has a market cap more than three times ours and is less advanced clinically.
Are you kidding? That is incorrect. The biotech sector is hot. Just look at the recent biotech IPOs this summer and the IBB index is up almost 8% in July. ADXS has been cooling down for several years because of poor financial and execution management while competitors have advanced.
It's won't be a world wide deal, but just US and Europe. You're forgottimg that Dan already gave away Asia, India, Latin America and Canada rights in weak deals with nothing upfront.
The stock is acting like it did the week before the Amgen deal two years ago. Hopefully, whatever deal Berlin strikes on HOT and/or AXAL will include a sizeable upfront cash payment getting us back up to the low double digits.
For those who have sold sub-$2 now fast forward to a year from now looking back will be a painful lesson in what it means to sell low IMO. Joseph Edelman of Perceptive Advisors, on the other hand, recently bought low (at $2) and he has one of the best track records in biotech investing. The company's valuation is priced at virtually nothing now due to poor management in the past. The bar is very low for a much higher valuation if Berlin just strikes one deal with upfront cash. Time will tell.
https://www.forbes.com/sites/nathanvardi/2018/04/10/a-sixth-sense-for-biotech-has-made-joe-edelman-a-hedge-fund-star/#d69fb6655e98
AXAL is not shelved. It will be if they don't find a partner in a specified time, but we know they are looking for one. As of now, the Phase 3 trial is ongoing, so let's be factual. Granted, it could be shut down, which is the bear case and how the stock is priced now. I'm hopeful they'll find a partner because the clincal program is late stage and generated encouraging and data so far. I could see them negotiating a deal for HOT that also includes finishing our AXAL Phase 3.
The stock fell from $8 to sub-$2 because the company was mismanaged and financial resources were not spent wisely. A deal with upfront cash, coupled with the new more focused strategy and fiscal responsibility should get us back to the $8 range IMO. The platform data has been positive and we are literally a Phase 3 company with an enterprise value close to zero. If one believes Berlin is fixing the missteps O'Connor made and getting the "management" factor right for once, the platform's fair value at this stage is at least $300m.
Agreed, the difference between our current price and a valuation back to where we were year ago ($7 to $8) is a deal on AXAL or HOT. I'm optimistic Berlin will get it done. He's a real CEO and his responsible focus on cost control and shareholder alignment is something we haven't seen in the last four years. The valuation now, net of cash, is valuing the company at virtually nothing because of poor management in the past. New leadership, new era, the market will catch up IMO.
Not surprising he would replace a veteran CFO who might question his self serving strategy when he could hire his former unemployed CFO with a large "inducement" grant to continue being a rubber stamp to his scheme on (now ONCS) investors.
Thanks James, glad you got to connect. I have been impressed with his focus and alignment with our interests (managing costs is a big part of it). Dan was a good salesman with his projections of big plans, but the reality of it was he mismanaged the company's finances and paid himself like he had already created the $6 billion company he talked about yet his strategy left shareholders with large losses and lot of value destroyed except for his own bank account.
Keith, not so long ago you told folks to think big and if I recall correctly you though they could get a least a couple billion ($40) for the company since its "chump change" for a big pharma to pay. Just curious, what changed in your valuation model to now think they'll only be able to get $15-$25 ($750m-$1.25b)?
Thanks James, very encouraging. Let's hope the terms are at least as good as the Amgen NEO deal.
Longx, thank you for sharing. We appreciate your honesty and character.
Good for ADXS. The post IPO market cap of the company is expected to be $460m, which is more conformation just how undervalued ADXS for a similar tech. As the market gets past how poor ADXS was managed and money wasted under O'Connor, imvestors will start to focus on how they can buy ADXS for a faction of the price of this company or NTGN.
Blue I was thinking the same thing, that Berlin was selling shares via the ATM. It didn't make sense that their was such high buying volume on great news but the stock barely went up. They don't have to PR when they sell shares via the ATM. Hope they are about to announce an AXAL deal. It's almost surreal how much value the company has lost. Years of mismamsgmemt caught up to us. The lesson learned is that poor management can override any value from a promising platform from an investment perspective.
It will be interesting to see if this news of the lift of the clinical hold is followed by an AXAL deal announced next week. The timing would make sense. Get the bad news out of the way first (EMA application withdrawal), followed by regulatory and safety confirmation of our platform (clinical hold lifted), then an AXAL deal announcement.
I noticed in the EMA withdrawal press release, Berlin said that the withdrawal does not impact our ongoing AXAL trials and the company is actively seeking a partner. This struck me as a more optimistic that we may be nearing a deal, as opposed to the earnings call in which he pessimistically said if no partner is found that the trials will be wound down.
Looking forward to see what happens next week. If it's a deal with upfront cash, hopefully we will move back toward the $7-$8 level we were at in the Spring of 2017 before it was revealed that O'Connor was the emperor with no clothes.
Agree with you on Sidransky. Getting rid of O'Connor and Bonstein were necessary to clean the slate because they were the mastermind and puppet behind the misaligned and destructive strategy that led to where we are today. Sidransky should have been shown the door as well, because as head of the Board, the buck stopped with him and he was the enabler.
I have no reason to doubt Berlin at this point. In his first few months, he already has bought shares in the open market with his own funds and made the difficult and necessary decision to right size the company and cut cash burn to instill fiscal discipline. Meanwhile, in O'Connor's first year at the helm, instead of trying to earn trust, he literally was caught lying to shareholders and his first priority was his deceptive proxy scheme with the objective of self-enrichment on the backs of investor interests.
Not much to say or contribute at this point, only the disclosure that I have not sold any because the platform and potential remain promising IMO. On one hand, those of us who took an activist stance against Dan O'Connor for his unethical behavior and self-dealing putting his own financial interests above his investors were right all along. Unfortunately, the change that we sought happened well after the damage was ultimately done and our mistake was not selling way back when. The extent of how misguided his business strategy was and reckless his spending of scarce capital was is now much more apparent, as we have paid for it dearly with the collapse of the stock and lost confidence in the company. The climax of the former reckless mentality of using "other people's money" for personal enrichment without a clue to fiduciary responsibility can be viewed in the April 2017 press release on "the best place to work" which coincidentally was right before the annual meeting and rapid fall of the company, as the annual meeting was a drawn out rambling with no deal delivered, an attempt to briefly introduce a new confusing costly DUAL construct very similar to AXAL, revelation that we could not strike a deal with Astra and also O'Connor's last bold attempt at self-enrichment with a new RSU proposal that had automatic escalations that didn't require annual shareholder approval. The single quote in that feel-good press release that embraced the mindset that embodied total neglect of financial or fiduciary responsibility that led us to where we are today can be seen in, ironically, our inexperienced non-CFO puppet of the CEO sounding more like an HR manager than a CFO:
“With so many prestigious companies, institutions and organizations throughout the state, we are honored to be named among the Best Places to Work in New Jersey,” said Sara M. Bonstein, Executive Vice President and Chief Financial Officer of Advaxis. “Advaxis has been able to grow thanks to our talented workforce, and our continued success is a result of our employees’ commitment to providing much needed therapeutic treatments for hard-to-treat cancers. Fostering a positive and engaging environment that promotes recognition, growth opportunities and great benefits has always been a priority for Advaxis, and we thank our staff, BCG and NJBIZ for this award.”
That said, I think Berlin is doing what is necessary to refocus the company. He is a real, experienced CEO who is intelligent. While I don't know a lot about Rosetta Genomics, my understanding is that ultimately the technology and the patenting around it led to its demise. On the other hand, our platform holds great promise. While there may not be great demand for AXAL cervical because of the small market (begging the question why would O'Connor spend the vast majority of the $200+ million he raised on AXAL under the faulty belief that by developing it further internally he would get more from a partnering deal later, which as we now know turned out to be dead wrong), the best ever survival data (better than a $6 billion drug, Avastin) is proof of concept for the LLM technology. Advaxis is valued at literally nothing now, so there is still significant upside, maybe not as much as before because of the damage O'Connor did and resulting dilution at low prices to replenish wasted cash, however, if one still believes in the LM platform and believes that the next generation NEO and HOT will produce even better survival than the solid AXAL cervical data we already, I see no reason to sell now.
Very impressive seeing these open market buys, which wouldn't happen unless they are very confident about the future. They did something O'Connor never did in four years: put their money where their mouth is. O'Connor was all about taking other people's money for himself and doing via unethical means. Berlin is finally the right man for the job (just hope it's not too late).
Did you listen to Berlin's earnings call? If they don't find a paying AXAL partner, that trial will be wound down.
Pressure from investors against their freeloading off shareholder assets for so long without having their own skin in the game.
There are studies showing insider purchases are correlated with higher returns of those stocks. I think a lot of the sell off this week may be related to the Russell rebalancing kicking ADXS out, because it likely meant our index large holders like Vanguard and BlackRock have been selling.
Regarding the quote below on Ken's first conference call at ADXS, if the HOT IND filing is not announced today, hopefully it is because of final details being worked out in a Big Pharma deal on HOT. If not...if the IND is filed later than the timeline Ken projected (in June) AND it is not filed with partner, that hurts Berlin's credibility out of the gate.
Ken Berlin, June 7, 2018
"As we laid out for you, as Dr. Gutierrez laid out for you, we're going to file the IND for the first HOT product candidate in lung this month, within the next several weeks, and then get in the clinic by the end of the year if all goes well."
They already did step up with NEO giving ADXS $40 million in upfront cash and struck a deal valued at over $500m.
Dews tweet that I think you are referring to had three responses. One called the onco vaccine space fairy dust (because there have been a lot of failures). I'd rather listen to Amgens opinion giving ADXS a $40 million upfront cash payment for rights to NEO development. Hopefully they'll do the same for HOT.
Mort, Dan left the company in shambles after years of misguided excessive spending and self dealing to take shareholder assets for himself. I was a big critic, advocating his removal. It happened, but too late. The damage has been done and it's hard for a micro cap biotech like ADXS to rebuild lost trust. $200 million was largely wasted on a construct that now may be shelved. Lombardo added to the damage because he was in over his head and didn't do much except wait to start retirement. Berlin is the clean up guy, and its a royal mess he's cleaning up. I think he's the man for the job. He's more ethical and smarter than O'Connor and aligned with our interest. The question is is anyone capable of rebuilding the shareholder value destroyed.
Bourbon, you seem to think you could do a better job than Berlin. You should have applied for the job. You're in NJ right?