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He's probably getting questions and pressure given the interim CEO situation and its implied uncertainty has impacted the stock. If he's finalizing a sale by mid year, at that time a new CEO will be in place, albeit it could be a division head of the acquirer (likely Amgen IMO).
I've suspected they were not really planning on hiring a CEO, else they would have already done it, which adds to the evidence Tony was brought in to sell the company.
Cattdogg, did the hired IR firm really say that about the ADXS CEO position, or did you just make it up like your unsubstantiated claim that BPs don't have the same public stock ownership reporting requirements as everyone else?
What are you taking about?
Hovacre, while Ocata was not a cancer biotech, I think that company, its investors base and expectations, how it was managed and ultimately what it was sold for is comparable to ADXS. The company's investor base was a majority retail, with huge expectations on what it was worth. The company was terribly managed over the years with dilutions on poor terms eroding shareholder value away. Then finally a sale for $350 million, which left most long-term investors in the company underwater not recouping their losses.
IMO it's a naive unsophisticated retail investment view when folks make comments like,
"look at what BPs are paying for biotechs these days, KITE was sold for $11 billion, I'll wait for that." (taking one of the highest priced acquisitions in recent years and assuming ADXS will get the same, even though when that company was at our stage it was already valued at several billion reflecting great investor and market demand and expectations for the platform versus our $100 million valuation. It's like comparing a struggling technology company to Apple.)
"At a very minimum, we will get $1 billion and that would be theft." (Really, a sale of $20 with a 1,000% premium would be unfair to ADXS shareholders?)
"ADXS' stock price doesn't matter. BP will pay what the science is worth." (Uhh, the company's valuation is currently $100 million. Any BP with fiduciary duties to its investors is going to try to make acquisitions as cheap as they can get based on a multiple of the company's valuation.)
"$1 billion is chump change for a BP." (Again, they have a fiduciary duty to their investors to generate an ROI, so this statement is meaningless. It doesn't matter how much money they have, they are charged with spending it wisely and prudently, unlike O'Connor at ADXS. Think about how much money Warren Buffett has and he is known to be a cheapskate. You think Berkshire Hathway would have grown to where it is today if he had the philosophy to his management team, "We've got tons of money sitting around, go out and spend it and overpay if you want.)
It does feel like a sale may be in the works, and I would love to see the highest price possible, but realistically, I think shareholders should be happy if Lombardo is able to get around $500 million/$10 a share. Given the poor management of O'Connor blowing through over $200 million in four years with shareholder value shrinking, ADXS has lost investor confidence (the proof is the $2 offering). Hopefully, that offering was with the backdrop that a sale is being finalized negotiating from a base of $7 when O'Connor was fired and Tony was brought in. Frankly, folks who complain about the potential of a $500m/$10 sale think about the alternative of ADXS being forced to sell another 20% of the company for $2 or less for another 4 months of operations like we recently did. That is death spiral financing and would dilute us even more to oblivion than we already have and is a sure way to increase the probably that we will lose even more money.
He may not be able to buy the stock on the open market if he is privy to a pending deal or sale of the company.
What worries me a bit is the how much. If the base price that the negotiation started was around $7 when Tony stepped in, I feel more confident that the sale price could be up toward $20/$1b, especially of the buyer is Amgen because their delaying the NEO start has contributed to the pressure on the stock. I think Amgen is the natural fit. If another entity is imterested in HOT, that's another reason that could give Tony negotiating pull with getting Amgen to pay a good price.
If a sale of the company is being finalized, that could be what Tony is talking about in saying they will have a new CEO by mid year. If it just were hiring a new CEO unrelated to a larger deal, I think it would have already happened considering it's been 10 months and the uncertainty has hurt our valuation. The Baords comment when Tony was elevated was "he will be interim CEO for the foreseeable future." One wonders if at that time the plan to sell the company was in motion and they didn't plan to hire a new CEO.
ADXS all but said a year ago Astra passed on licensing with us and instead struck a $700m deal with INO.
Thanks for your work with all the call TC. We could be wrong on this, but it does appear some major transition is in the works (it just doesn't make sense to sell another 20% stake on terrible terms for 4 extra months of operations), but given we have late stage assets, a $500m NEO deal and HOT up for grabs as well as PSA, it would make sense to sell the entire compnay. If it talks like a duck, walks like a duck, acts like a duck, well...
Hard to tell, but the first time numerous investors who regularly speak to the company got a no response was specifically on the question of the execs that appeared to leave. This could be related to a change of control/sale of the company, making it necessary to have a blackout so IR doesn't reveal why those execs left.
The reason why I think it potentially could be more than a licensing deal but rather a sale or change of control of some sort is because a licensing deal wouldn't require the kind of blackout period we have had the last three weeks. There was no black out leading up to the original Amgen NEO deal.
Thanks, I got it backwards, not an accountant either. Point being that as a non-revenue biotech, if they report less than a year's worth of cash that could trigger a negative disclosure on the risk of their "going concern" being in jeopardy. And if there is a sale or deal in works, I would think, for example, if Amgen management takes the proposal to their Board of Directors, they could get push back by way of "Why would we pay XX for a company that doesn't have enough cash to sustain itself such that its auditors believe it may not be a going concern within the next year."
Jck, agree that they need a source of non-dilutive financing whether a deal on AXAL or HOT or sale of the company if the terms are attractive.
Keith, agree the timing of TL's call for a new CEO does coincide when they would need to raise more cash to have a year's worth, which still makes me think a sale could be in progress. The implications of another $2 offering would be incredibly harmful to shareholder interests. Think about it, they just sold 20% of the company for $2/$20 million. Doing that again would constitute a kind of death spiral financing in which they company is accepting capital on terrible terms just to keep getting paychecks while investors get diluted to oblivion on terrible terms. I don't think they would have fired O'Connor and put in place a temp CEO with a deal making background for 10 months to do that. I think the $2 offering was necessary to keep the company a going concern from an audit perspective until the sale is finalized, so in effect the larger sale has been agreed on which puts the $2 offering in context of the positive end objective. If I am wrong and the $2 offering is because nothing is in the works and the company is desparate and will be forced to do another $2 offering in June and simply put in a new CEO without any sale, change of control or licensing deal, then we're screwed. I hope and pray that is not the case.
Your second point implies they won't have to raise cash until 2Q19, which is not true. They raised cash now because if they didn't, from am audit standpoint, they would have to report they are a "Going Concern" so the $2 raise bought them another 3-4 month before they need to bring in more cash to have at least a years worth and doing another dilution at this stock price would be catastrophic to sharehdoler value even more than the last dilution.
We can't wait that long because doing another dilution on terrible terms given how low the stock price is would cripple shareholder value even more.
What is more relevant is the multiples of what they are paying relevant to the valuation of the companies. If ADXS were valued at $1b, I agree a sale of a few billion would be realistic.
We all want the highest price available, but the reality is we didn't have to wait long for ADXS to sell 20% of the company for $2/$20m. IMO more piecemeal dillutive selling off 20% percent of the company under those terrible terms would be much less preferable than than selling the entire company for $500m/$10.
Agreed, highly unlikely Amgen Directors would approve a sale at a valuation more than 10x above our current valuation. IMO a more realistic price that would be approved by ADXS Board and represent fair value for a buyer, particularly Amgen is in the $500-$600m/$10-$12 range. That is the potential deal value of NEO. The sale multiple based on current valuation is still on the high end, but if Amgen wants to keep rights to HOT and PSA, it's a reasonable price. Seeing that Dan was fired and Tony elevated to sell the company (If that is the case) I don't see ADXS letting the company go for much less than $500m.
Keith I'm hopeful a buyout is in the works but realistically I could see a sale price in the $500-$600m range/$10-$12. While we all think the science is worth more, the company has been so poorly managed and lost investor confidence that it's not exaclty in a position if negotiating strength. One has to look no further than the $2 offering for 20% of the company. I think we should be able to get $500-$600m base on the NEO deal, AXAL, HOT and PSA. The only way I could see up toward $1b or more is if Amgen is bidding against another interested company and Amgen doesn't want anyone to have HOT and pays up.
I think it is a reasonable prediction that this current blackout period could be related to a sale of the company in progress. The reasons include:
-having an interim CEO for close to 10 months who has a deal-making background (if they planned to stay independent they would have made him permanent or hired a permanent one by now, considering the negative impact that the uncertainty has had on the stock)
-program delays, including the submission of the EU application as well as the start of and amendment to the NEO trial (which could be related to "negotiations" with a buyer such as Amgen)
-Majority of the senior management team disappeared from the company's listing of their management team in material, and CFO wrote odd article promoting her value to clinical stage biotechs that in no way benefited ADXS but would benefit her in a job search
-IR not responding to calls about what happened to the missing key executives, and also not responding to any calls period, even calls from long-term investors with good relationships with IR
-Accumulated poor management of the company, driven from O'Connor's liberal and self-serving spending and unfocused business strategy, have exhausted investor goodwill and confidence, as evidenced by the company forced to sell a 20% stake for an all time low price to maintain "a years worth of cash"
-Any selling of another 20% stake for a record low stock price, now under $2, would obliterate shareholder value even more, making the most sensible option to sell the company now (unless management proves to be completely self-serving, but I don't think this is the case because that is why O'Connor was replaced)
-Patients will benefit from a sale of the company to put the platform in stronger hands and get the life saving treatments to the market faster
I could see the official date of the deal or sale being after the FDA resolves the hold.
Good post, Blue. Agree this black out period is highly unusual and it happened around the time several of the top management seemingly left without explanation and the CFO wrote who article promoting her value to clinical stage biotechs. I still wonder if the total silence is because a sale of the company is pending. The reason I think it could be more than just a deal on HOT is because the company didn't have this kind of black out period leading up to the Amgen NEO deal, so don't think the black out we are seeing now is a condition of a deal on HOT but it could be if the entire company is being sold.
With all due respect to Abuhafsa, a critical analysis of his posts might come to the conclusion that he is a FUD-spewing lair.
Exaclty, how could anyone hold ADXS for the last five years and not know ADXS has not entered any deal for HOT yet.
Another "tell" IMO raising questions about his agenda was his post below. We all are frustrated with the collapse, but this quote doesn't come across as the view a true long would have. If I were long and thought the evidence was that the company was headed into bankrupcy, well I wouldn't hold the stock anymore.
"Bankrupcy, absence any evidence to the contrary."
Abuhafsa, with all due respect, I find it questionable that you have held ADXS for five years when, based on your own post ealier today, you did not know that ADXS' deal in August 2016 with Amgen on NEO included Amgen paying for all trial costs in addition to the potential $500m in milestones. Paying for the trial costs was a big component of the deal.
I meant ADXS is doing a potential Phase 3 combo trial with Bristol Myers Squibb.
That particular combo trial with Astra is not as important now, given ADXS is doing a potential Phase 3 combo trial with ADXS, however, if for some reason the FDA thinks LLM in combination with PD1 is unsafe, that would be a problem. From reading some other posts, it sounds that Astras PD1 is known to have had some issues with respiratory problems with patients, while our LLM has not. But my point is no one's would likely rush to sign a deal to buy the company until the FDA says the issue is resolved.
I wouldn't be surprised to see a buyout happen shortly after the clinical hold is lifted. I doubt Amgen (or whomever) would want to sign a deal with a company until their clinical hold is resolved.
Irrelevant useless information since ADXS' current blackout isn't related to an IPO or quarterly earnings.
Going on ten months with the interim deal maker. Market is saying wrap up the sale of the entire company now before we have to sell another 20% stake on terrible terms.
Agree...clearly all the delays including the delay in finding a new CEO have had a negative impact on the stock. If ADXS intended to stay indepedent, they likely would have put in place a permanent CEO or named Tony permanent now nine and a half months later. However if it's all part of Tonys mandate to sell the company and that is in the works, the delays and $2 offering are part of the process of finalizing a sale. As Scott said in an earlier post, if the intent is to stay independent at all costs and do another 20% sale of the company at an all time low stock price then either management is completely self serving and screwing us or the company has no one interested - I think the former is not the case because they would have left Dan to that since that is what he was doing, and the latter is likely not the case because the data and platform have generated promising data.
And if the majority of the executive team did in fact leave suddenly at the same time, that is a sign of a change of control announcement soon. TL said new CEO by June. Let's see how the pieces fall together. Admittedly, I could be completely wrong on, we should find out soon though one way or another.
It depends on how long a transaction takes to finalize (if that is a reason for the blackout). Granted, we don't know whether the current blackout is related to a deal or buyout, but I do find it curious that the blackout began around the same time several of the management team were removed from company material. "If" their department is related to a forthcoming change or control, I can see why the company would have a blackout to ensure no one at the company inadvertently discloses that the execs may have left because of some transaction in the works.
The big question is will ADXS be an independent company then or will the CEO be a division head of a BP overseeing the Advaxis subsidiary.
Right buddy, temp CEO with an M&A background in place for nine months, blackout period going on three weeks now, several members of the management team appeared to leave at the same time, CFO wrote article touting how valuable she is to clincial stage biotechs, business as usual you say. Or one could argue the signs point to some type of change of control that will be announced soon.
Not if the event hasn't been finalized. I was thinking of either a buyout or deal, and that 4 day window kicks in when it has been signed.
I actually see the blackout as positive, because it means there is likely some material non public event yet to be disclosed, and if it were negative they would have been required to disclose it already. Hoping for the best.
Blue 13fs are due 45 days after quarter end which puts it mid May, not days. Catt, you didnt provide evidence of the pharma reporting, and Donjay said he spoke to someone at JNJ who said they fall under the same reporting rules. What is your evidence of your claim of different reporting?