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I wonder that perhaps the pricing and availability of Atryn might be causing many researchers to consider studies that they may otherwise not.
Thanks, I will do more study based on your input.
PS: Could it ever make sense for Atryn in some form to be prescribed as a medication for severe RA, or other inflammatory condition? I guess I am wondering to what degree are the anti-inflammatory properties present; just enough to make a difference in another primary treatment (DIC) or is the effect significant enough to make a real difference with inflammation as a primary target? It would seem that, intuitively, the treatment would be too risky for that kind of primary usage but I thought I'd ask.
MTB, I read the post with great interest several times. Rather than read multiple posts on the effects of a R/S I thought I would ask for some corraboration on your thoughts which are beyond my abilities to fully understand. I admire your critical thinking abilities.
As far as what I think about your post, I wish I could better understand the following:
2)ATIII has beneficial antiflammatory properties. The heparin-binding sites on ATIII also bind the HSPG's (think of them as molecular fingers sticking out from a number of cells, including white blood cells and cells lining the blood vessels) and in doing so, DECREASE the release of inflammatory mediators. It is THIS function that appears to be completely disabled by even very small amounts of therapeutically-administered heparin, as the 'therapeutic' heparin administered in the blood appears to prevent ATIII's binding to the HSPG's on cells in the body.
but I havn't the proper background. However, I am interested in the "beneficial antiflammatory properties". If the affected area becomes inflamed, swells, constricts blood flow, causes pain, causes more problems......and so on, then antiflammatory properties of Atryn would seem to be a wonderful enhancement.
Dew, any quarrel with this post? TIA
http://investorshub.advfn.com/boards/read_msg.asp?message_id=28253767
BP, there is a more than good possibility that GTC EXPECTS to have to fund operations for the foreseeable future through public financing. In other words, they are not busting their butts to achieve profitability and will simply ramp up spending as cash flows come in for various programs. This may not be a bad thing. I think they see the mission as raising roughly the same moneys as in the past into the future - say several years.
With this spending comes accelerated development and new development. To look at it another way, if they were to concentrate only on profit, the share price may go up but the real value would decline as competitors catch up and development stagnates.
Subsequent dillution may not be as severe, but the bottom line for me is that I have accepted the periodic money raising event as part and parcel to GTC for at least the next few years.
News required to move IMO. Hopefuly the GL1001 IND filing. Perhaps a ORXE move to establish a IR front with news to kick it off. They are aware that they need work on the IR front but know also that they need some solid news before putting it in place.
I think they could buy another 4 million shares for a couple million of their cash.
They know that it won't take 2 years for them to find out if the DR thing will work. They will know sooner.
Dew, if you would, please characterize how you view the market for small cap (risky) bio techs. Are they on average:
1)severely undervalued
2)undervalued
3)about normal
4)overvalued
Thanks
How did the conversation evolve from an up front cash payment + milestones + royalties to Cox's signature "Let's make a stock deal."
.48-.6o is less than a 25% gain. Take the .57 and go.
Do you suppose that the revenue from this extension has already been baked into the expected revenues - from the CC:
"we have already booked and included in our forecast $15 million in respective cash receipts from our currently contracted partners"
That should be the path IMO. With 60mil market cap and equity requirements met I don't see why we should try to chase a bid.
Dew, just another note to thank you for the awesome RMF. What a fantastic resource!
The entire section, "ATryn DIC/sepsis program", is important. The post: http://investorshub.advfn.com/boards/read_msg.asp?message_id=12430822 is particularly interesting. Of course much of the value of the partnership is contingent on a successful outcome in the DIC IND, but the dollars coming in from that partnership alone is like 68mil milestones plus 15% of the EU sales, quite a prize in its own right.
Hi Johnbits, a good healthy "bit" of sales resistance is never a bad thing. Better than buyer's remorse. Nothing like ownership to keep you interested, studying, and learning.
John, this bit from the CC transcript may also help in your evaluation. Pardon me for having posted this a couple of times, but if may be worthy of repeating:
"To illustrate the growing impact of our partnering efforts, today we have already booked and included in our forecast $15 million in respective cash receipts from our currently contracted partners indicating another year of significant revenue growth ahead of us. We will continue to build on this strong base as we add new and expanded collaborations."
Even within the areas that GTC has carved out for itself in conjunction with its partners LEO, Merrimack, LFB, ProGenetics, PharmAthene, and maybe more to come, the risks are more with the financial stability of the company than the technology. We are supplying materials for important trials and beyond so that these players have a larger and larger stake in GTC's operations. They have got to be wondering why they placed such a large stake on GTC's integrity and now they are basically a going concern.
I think we get sold soon.
>GTC methods aren't cheap when you factor in having to get approved on a new method of production<<
Just to elaborate, I thought bio-reactors cost as much as 600mil and that GTC's cost 60mil, leaving a lot of margin for "issues" with respect to the novel platform. Also, GTC's is expandable from its established base. For example, re. AAT, I think they already have the manufacturing marked out with high yield. I am naive, but it seems perfect to me.
Not picking a fight, genuinely interested in learning - thanks.
Jonhbits, thought provoking comments.
>>GTCB is one mistake away from not existing<<
What would ameliorate these concerns? Takeover by a big player, duplicate farms for redundancy, or some other?
>>GTC methods aren't cheap when you factor in having to get approved on a new method of production<<
I don't understand this point.
>>... and factor in the liablity of having two methods of producing a drug like Tysabri. For instance, if someone got PML from a GTC batch of Tysabri, how would Elan determine what the real problem was? Was it something GTC did or was a basic problem with Tysabri?<<
I don't see this as a real concern but maybe I am missing it.
From RMF, if I may:
""What are the economics of the Merrimack relationship with GTC?
The main economic upside for MM-093 is in RA, a very large indication. If MM-093 works in RA, its non-TNF-a mechanism of action and presumably low incidence of side effects ought to put it in a strong position to serve the roughly 50% of RA patients for whom one of the TNF-a drugs (Remicade, Humira, Enbrel) does not do the trick. Moreover, MM-093 should be safer than Rituxan, which is emerging as a popular choice in second-line RA following failure on a TNF-a drug.
Although it’s still early in the development program, it’s not unreasonable to think that MM-093 has bona fide blockbuster potential in RA. If this turns out to be true, even relatively thin supplier margins could eventually mean big money for GTC.
My guess is that GTC will get a mid-single-digit IP royalty on MM-093 sales and a markup on GTC’s fully-allocated production cost for bulk product that GTC sells to Merrimack. For the production cost mark-up, the industry standard is about 10%. If, for the sake of discussion, we say that GTC’s fully-allocated production cost will be 15% of the end-user selling price of MM-093, then the 10% mark-up is equivalent to a 1.5% royalty on sales over and above the royalty that will be earned for Merrimack’s use of GTC’s IP. Hence, the overall economic value of the deal for GTC could be a high-single-digit royalty on sales. This could amount to a highly consequential income stream if MM-093 achieves blockbuster status."
I bet that if you were persistant and formulated questions that could reasonably be addressed by the CEO vs. the CFO, you could speak with Dr. Cox. That's my gut feeling. I have found very few small cap companies who would not accomodate.
LMAO, Warren Buffet buying GTC. Wouldn't that just goose this thing? It'd jump higher than freaking Dolly when goatfondler walks up from behind!
I think you are right, and also, it is important to note that they are fortunately working on more than one partnership:
"We are in active discussions with potential partners for ATryn as well as for other products in our plasma protein and follow-on biologics portfolios."
and also to keep in mind:
"To illustrate the growing impact of our partnering efforts, today we have already booked and included in our forecast $15 million in respective cash receipts from our currently contracted partners indicating another year of significant revenue growth ahead of us. We will continue to build on this strong base as we add new and expanded collaborations."
I think there will be some sorry sellers after the dust settles here. I bought more at .51 yesterday and will look for opportunities below as I am able.
If this decline is mostly about the current financial crisis in the US, then since the recent financing is behind us and ahead are partnering agreements which are not, per se, based on this but rather on a relatively small (but for us significant) upfront, milestones, and royalties, then this huge drop in share price is unwarranted.
Is a lower cost of GTC AAT vs plasma derived AAT part of the rational for the alpha-1 antitripsin program? Are competing products (inhaled) under development also plasma derived?
From CC:
"Remember that we established high levels of production of this difficult to express protein at 20 grams per liter of milk."
PS: Is there any way to charachterize the probabilities this product has to succeed and the size, length, expense and difficuties of the trials etc.?
IMO mistakes have been repeated in not allowing the market to firm up and consolidate gains in GTC's stock price after good news. I believe the CFO/CEO team has been naive in timing these dilutive events concurrent with each major milestone event. I also think that GTC has been too conservative in attempting to manage market perceptions.
If GTC's survival depends on equity financing, then the team has an explicit obligation to defend the stock price with vigor, as opposed to the track that has benn taken, one that has been hesitant to flaunt the company's strengths, hasty and amateurish in the timing of its financing and PR moves, and until recently, cavalier about the prospects of the stock diving into the sub dollar range.
The company was absolutely not worried about a R/S possibility 18 months ago when most of us were apprehensive about it. PR opportunities were passed by because no one at GTC was managing market perceptions (someone at GTC needs to condescend to that level). Investors simply need to be constantly reminded of why they have their money in this company, especially most institutional investors, who aren't sophisticated at all. No lies or exaggerations, just facts, something GTC has plenty of good ones to go around and all the more necessary because of the complexity of the company.
This lack of understanding of how the stock market works and failure to advocate aggressively for us as owners is grounds for removal of the CFO/CEO combo. The only way they should be allowed to stay in control here is if they quickly demonstrate a change of heart towards shareholders and incorporate new strategies with regard to the stock. I agree with the sentiment that Dr. Cox has been the right person to get the team to the threshold of success but perhaps not the one to carry us over it. He could change that with an aggressive campaign to promote this technology and I don't mean endless trips to biotech conferences. Those are important but we also need an aggressive PR campaign to carefully educate investors who are primarily tuned in to press releases, articles, human interest stories, progress reports, and the like. Investors, including larger ones, do care about perceptions. In fact the stock price itself is a powerful force in projecting the value of a company. So it simply must be the prime focus of any CEO/CFO combo in a public company in the emerging science category.
>>it certainly doesn't speak as to the prospects for GTCB<<
Agree. We have to be very careful not to allow a low PPS to be overly influential in determining GTC's value. I am excited about the programs at GTC and impressed with what they have accomplished with limited funding. The funding aspect of the company is a weak spot, but that can change too.
Nabbed a few K at .45 at open somehow.
From the CC transcript (thanks again Dew)
>>Our objective for the recombinant alpha 1 antitrypsin program is to initially establish an intravenous product for the prophylactic treatment of patients with a genetic deficiency of alpha 1 antitrypsin. Remember that we established high levels of production of this difficult to express protein at 20 grams per liter of milk. Hereditary-deficiency patients who are not treated prophylactically suffer from a build-up of elastase in the lung that may lead to emphysema or other respiratory conditions. We believe we have identified appropriate techniques to extend the half-life of our alpha 1 antitrypsin product to enable it to be dosed in a similar manner as plasma-derived products. Once we establish an appropriate formulation of our alpha 1 antitrypsin product, we can complete our pre clinical development over the next 12 months.
We recently met with a representative of the Alpha 1 Foundation where they described the very real concerns their members have with managing their treatment with plasma-derived products. They encouraged us in our efforts to develop a robust supply of our recombinant product to help these patients maintain as much lung function as possible.<<
The language in the above paragraphs leads me to believe it is a matter of "when" this gets approved, not "if", however I would appreciate some counterpoint on this.
I think that if any large BioPharma is interested in GTC as a takeover prospect they most likely are thinking of making an offer before things get out of hand partner wise. If you were looking at a purchase, would you want more or less future tied up in partnerships with other companies? Certainly not at discount prices.
To summarize my early morning thoughts (LMAO) it seems that a phenomenal company is at risk of being forced to trade large portions of future potential revenue for pennies on the dollar so to speak for lack of capital. Again my thoughts turn to small cash rich, pipeline poor biotechs that may be willing to merge with GTC. If the "perfect storm" has hit small cash flow negative biotechs (SCFNBTs) pronounced "scuf'n'butts" it has equally hit "scurpabutts" (scrppbts) small cash rich, pipeline poor biotechs.
So Dr. Cox and board, start calling some of these companies that are pouring millions into drugs that have little chance for success and hook them up with the future!
>>Capital investment in independent cell-manufacturing capacity will be in the order of hundreds of millions of dollars versus transgenic production systems which require a fraction of this investment.<<
and
>>We believe that our existing commercial production facilities and infrastructure are sufficient to support the commercial scale of production for these programs<<
So if my math is correct the ratio currently stands at "hundreds of millions"/0. GTCs production platform appears to be quantifiably infinitely better on a cost basis as opposed to "Big Biotech".
Complements of Dew's transcript of the CC, I find these paragraphs to be exceptional:
"...
Today, the manufacturing capacity from the cell-based production of monoclonal antibodies in Europe and North America is largely owned and controlled by innovator companies [i.e. Big Biotech]. Capital investment in independent cell-manufacturing capacity will be in the order of hundreds of millions of dollars versus transgenic production systems which require a fraction of this investment. Today, however, a number of production companies, often partnered with generic companies, are developing products such as EPO, human growth hormone and interferon, which are highly active but small-volume products. These are highly competitive markets which do not require significant production capacities for entrance. As such, we do not see these markets as attractive opportunities for us since they do not exploit the key competitive advantages of our technology.
Our focus is on a group of monoclonal antibodies which are coming off patent over the next six to eight years. We have identified four or five of these products which today have a combined market of approximately $16 billion and are expected to double to approximately $30 billion over the next five or six years [#msg-20699044, item 02].
We have already started to move forward with the initial development into some of these products. And this can be achieved with minimal additional expenditure at this stage by leveraging our existing infrastructure. We believe that our existing commercial production facilities and infrastructure are sufficient to support the commercial scale of production for these programs. Clearly, we do not plan to commercialize these products ourselves and we're seeking partnering opportunities with companies able to support this type of commercialization activity.
Before I hand over the call to Jack Green, let me make a few comments about our financial status. As you know, we completed a modest financing in early February which was important in maintaining the financial stability of the company. We had intentionally waited until we were able to disclose the results of our pivotal ATryn, study before attempting to refinance. Unfortunately, the capital markets continue to be very challenging with the cause and the solutions being well outside our ability to control. However, we have very consciously developed portfolios of products which we can leverage in a number of ways through partnering. It is our intention to focus on these partnering activities to support the financing of the company and the development and commercialization of our products so that we're not wholly dependent on the equity markets for sources of cash. [Easier said than done, evidently.] This is a strength for the company in the current financial climate.
To illustrate the growing impact of our partnering efforts, today we have already booked and included in our forecast $15 million in respective cash receipts from our currently contracted partners indicating another year of significant revenue growth ahead of us. We will continue to build on this strong base as we add new and expanded collaborations. ..."
I'll buy $1.12 for $0.52.
I agree that the trade is thin, that the prices are irrational, and that it will get better but I doubt there are many out there intentionally trying to short this stock or sell it down because it would be equally hard for them to work their way out of it and the risk is there for them too. I think it is primarily margin call related.
I think we recover before their modest cash burn makes the stock less compelling from a strictly cash in the bank perspective. Good news would be big here.
Spoke with CFO.
2001: A Space Odyssey
I don't disagree. Reminded of IDIX and the disbandonment of the force after it proved to be too expensive.
All the same, I was glad he said that. It may or may not be silly depending on the nature of it. I was intrigued with the description of the "patient finding" mechanism required and surprised that it might only require a dozen sales specialists. They could even be exploring the structure of "patient mining" and it could be well underway by the middle of next year. There is always a risk with doing things yourself but at least you have it under your own control.
>>As of December 31, 2007, the Company had $32.8 million in combined cash, cash equivalents and marketable securities available-for-sale<<
Verified that the 3mil additional payment due in about a year is not included in this number. If you include the 3mil the number is 35.8 or about $1.11/share in cash.
GLTY
>>An evolving DIC score 0 to 4, (0 being normal) was given to each patient with 1 point for each of the following: 20% decrease in platelet count (PC); an increase in PT >0.3 sec; an absolute PC<100,000; and PT > 14.5 sec. Data are presented as mean ± SEM. A p value <0.05 was considered statistically significant. <<
http://meeting.chestjournal.org/cgi/content/abstract/126/4/779S
I this the method?