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In theory you're completely right, in practice however results are very different. I would hazard to guess that over 90% of all companies that do reverse splits continue on a downward spiral, many to oblivion, or at least additional reverse splits because they're viewed as a big negative. Of course if really positive news comes later, the price corrects.
Splits on the other hand are viewed extremely positively. In prior decades, splits often occurred as companies approached triple digits, but today permitting share prices to grow into the hundreds of dollars has become a status symbol for companies like Apple, Google, etc.
In theory, companies kept prices where investors could easily trade in 100 or 1000 share increments. Frankly I'm amazed at how many 100 share trades are made in AEZS, even with the cheapest commission rates on a percentage basis you have to be up substantially if you buy then sell 100 shares just to break even. I would suspect that many trades are computer driven, and those trading that way don't pay the commissions you and I do. Frankly, I wish this sort of market manipulation was stopped, but it's currently legal.
Remember, it hasn't been that long since 1/16th of a dollar was the smallest spread between bid and ask for most stocks. Often the spread was as great as $.25. Today we often see spreads of $.0001 between bid and asked and still no shares are being traded. My brokers won't let me put in a bid at 4 or even 3 digits, yet computers trade on my offer and generally get the stock at a price that's tenths or hundredths below my offer, or sell it for the same increment above. What difference does it make to me, it's insignificant.
Someone just bought and/or sold 100 shares of AEZS at .4948, that's $49.48. If this were an individual buyer, would they really not buy the stock for $50. After commissions they probably paid over $55 and if they sell and pay commissions they'll need to get over $60 for those same 100 shares to be even. My point is that investors don't need $.0001 trading or even $.001 for stocks trading above about a dime. While $1/16 was probably a larger increment than what was best for markets, a penny is really as small as most stocks should trade for until their price is below some established value. It's time for people to take control back from the computers.
Gary
That's what I thought and I hope you're right about them using discretion by not just getting it done. Unfortunately, I've seen other BOD's go the other way and often at extremes. I.E. while say 3 for 1 would have brought a near $2 price, they opted for 10 for 1 to go for over $5, justification, more Institutions will buy when over $5.
While it's true many Institutions can't buy and hold stocks selling for under $5, using Reverse Splits to get there hasn't proven to interest them, they want companies that raise their price to those levels, not R/S to get there. In most cases it took little time before they were trading closer to $1 than $5.
Please don't get me wrong, I still hope the BOD will act in our best interests and wait for the many positive things which could take the price above $1, but I'm not convinced they will. What's bothered me the most is the company's failure to discuss the R/S and their intentions before the vote. I believe they indicated they intended such a discussion at the quarterly, but then they held of the quarterly to the same day as the Special Meeting and barely mentioned it, as all votes had to be cast previously if you weren't actually attending the meeting.
I think they knew they controlled sufficient votes to pass it, but I still believe investors deserved that discussion, and their failure to do it disturbs me.
Gary
I'll be very honest, I didn't scour the notice for the Special Meeting on the reverse split in the manner an attorney might. I've seen many posts indicating that AEZS won't do the Reverse Split until the last possible second. I'd like to know if anyone saw that specified in the documentation they provided.
Personally, I thought their effort came much earlier than needed, but if they're truly prohibited from acting until they're facing delisting near term, than I feel better. If on the other hand their are no restrictions on the Board of Director's who'll be executing the R/S, I'm not certain they won't simply get it behind them acting before many possibilities that would eliminate the need.
Why would they act in this manner. At the higher price they'd achieve they'd be more inclined to dilute, though hopefully they'd wait for positive news to do so. While I certainly hope I'm wrong, if someone can show me where they're bound to not do it until they must, I'd much appreciate it. Otherwise, I believe the positive vote enabled the board to use its best judgement, and I'm not certain we individual investors will like what they do.
Gary
They really only must act by November, and one possible act would delay that 6 months more. If they do the R/S before that it's because they want to, not that they must.
Gary
Charlie,
If we're speaking of the reaction to good news on the Cancer Cachexia trial, the FDA has little to do with it, at this time.
The company would no doubt speak with the FDA about the course of action from the Phase IIa Trial, the next step might be simply a Phase IIb that expanded on the IIa. With any luck, in that their is no currently approved therapy the FDA will either permit the Phase II to be registrational, i.e. the potential for approval would exist in the smaller Phase 2, or they might want the company to immediately jump into a larger Phase III.
I do believe that the shock value of having a drug that should be approved by 1st half of next year suddenly go from Niche potential to Blockbuster would dramatically increase the stock price.
To begin with, Big Pharma would immediately take an interest in the drug, and with any luck 2 or more of these companies would either be bidding for the drug, or perhaps even the company. If successful, a partnership should bring in perhaps 9 figures up front and royalties in the teens or higher. It still may take a couple years for approval in Cancer Cachexia, but with additional data, and approval in diagnosing HGH deficiency, off label use would ramp up dramatically so by the time actual FDA approval came it wouldn't change dramatically as insurance companies and HMO's, etc would already be authorizing its use.
I frankly believe that a buy in at $100,000,000 or more to partner the drug is very possible, and that much money, with the promise of far more to come should warrant a share price in the double digits with the current O/S, should the R/S be done, it would be far higher, depending on the O/S at the time.
Gary
While I can agree with much that's said, I believe they're paying little attention to AEZS-130. First, approval first half of next year is very possible if Priority Review is granted, that could bring $1 or more to the share price. Even before approval is granted, which it should be, the outcome of the Phase IIa should be known in Cancer Cachexia. Right now this is the most overlooked trial I've ever seen.
While most trials require years to determine safety and efficacy, I believe safety issues were settled previously, so largely this should be about efficacy. How do you determine efficacy in a Cancer Cachexia trial? A good digital home scale should be about all that's needed. If patients continue losing weight uncontrollably, it's not working. However if some patients stabilize their weight, or even better, gain weight if the need to, it's working like a charm for them.
This sounds so simple, but the truth is, many cancer patients lose weight uncontrollably, and ultimately this weakens them to the point that organs fail well before the cancer kills them. Cancer caused the problem, but their is currently no treatment for Cancer Cachexia.
Perhaps there is little regard for this trial because nothing in the past ever worked, so there is little faith that it will. That may prove correct, though preclinical work substantiates a reason for running this trial. What if it works? A niche drug suddenly has major blockbuster potential.
Gary
Nice movement today, anyone heard a reason, I've not seen one.
I believe the stock is very undervalued, just one bit of really positive news could lead to an immediate double or more from where we are today.
I'll be out sailing till Labor Day, Newport, Avalon, Cat Harbor, though I'll have the net most of the time, I won't be spending much time on it.
Labor Day traditionally marks the end of the Summer Doldrum's in Biotech, hopefully the Fall brings the stock to $1 or more without a reverse split.
Gary
I believe it's an open trial that they could report on by Fall. The thing about trials like this is companies don't talk about them until trial results are subjected to peer review either by presentation at a technical conference, or acceptance and publication in a technical journal.
There is no telling when such a peer review opportunity will present itself. In some cases, major conferences like ASCO require Abstract submissions many months before the presentation. The company, on the other hand, might say that they're encouraged by the trial, or something like that, which is a non technical indication of efficacy, without compromising the data which hasn't been peer reviewed. I know this drives investors crazy, but peer review before discussions with investors is a policy that's not violated by credible companies, the Pinks are a different matter.
Gary
Far more Institutions have $5 as the minimum that they can buy into, however Institutions buy stocks they're not supposed to all the time. They do it by buying on or after the first day of a quarter, and if the stock doesn't comply with their buy requirements during the quarter, selling by the last day.
Companies on the other hand who've done reverse splits often cite Institutional buyers as the reason for maximizing the price, i.e. using the maximum permitted ratio for the R/S. It's rare this reasoning works as investors, unhappy with their actions bail out, and the price action is generally down, not attractive to Institutions other than those that are looking for stocks to short.
I'd agree with a board that puts the price between $1.50 and $2. Setting it closer to $1 than that risks investors bailing out short term and still not meeting Nasdaq requirements. The real key to meeting Nasdaq requirement is good news. Should the R/S occur just before, or after really positive news is revealed, it almost surely will be successful. On the other hand, I've seen splits initiated at roughly $5 that were under $2 in months because of no news, nothing negative, just nothing positive either.
AEZS has the possibility of several positive things occurring, however for anything positive there is also a potential negative outcome as well. Positive results in Cancer Cachexia could be huge, I don't place a great deal of downside risk, as most people are not expecting it, but it certainly would be viewed negatively. AEZS went for Priority Review on AEZS-130, if they receive it, it's positive news, but if the FDA says no, that's the risk they take.
The Perifosine MM Trial has 3 potential outcomes. I'd put the likelihood of the board recommending continuation of the trial at perhaps 95%, this should be viewed positively, but there are always investors who demand perfection, i.e. halt the trial for efficacy at the first peek. Odds are probably no more than a couple percent of this happen, and likewise halting the trial for futility. There are currently several Perifosine trials going, while AEZS only committed to the MM Trial through the first peek, you know they'll take it all the way if that's what the monitors recommend, it would be foolhardy to do anything else. Of course they may try to partner North America, or even more, again, but the point is, the trial shouldn't be stopped unless the monitors say so.
Starting AEZS-108 in Phase III is still a positive, but everyone knows it will happen eventually, so I can't say it's big news, but certainly positive. Downside there has to be years out if results fail to meet expectations, but all the evidence says they will.
My point is there is a lot of potentially great news for this company. I doing a reverse split is a must do, it should be done when positive news will reinforce why things are good and maintain a positive outlook for the stock. If no positive news is anticipated, I'd hope they aren't forced to do it by Nasdaq deadlines, remember, they can request a 6 months extension taking them to May 2013.
Gary
Now they have the authority, lets see how they use it.
If they wait till it's actually needed, if ever, and only use what's necessary to achieve a share price no higher than $2, I'll accept managements decision. On the other hand, if they quickly do the R/S and go for the highest possible price, i.e. 1 for 8, I'll strongly object to their actions and if I remain invested will probably be a thorn in their side.
With the outstanding shares over 100K a reduction to levels between 50 and 25 million might be considered reasonable. Reducing the O/S below that point is practically an invitation to dilute the share to at least that level. Of course I learned that their have been no restraints on the company before, and that continues to be the case. Dilution itself isn't the problem, if management has provided substantial reasons for it being necessary. However if a company's record is dilution as a way of staying in business because everything else they do fails, then they must be viewed a failure and investors are cautioned to stay out no matter how positive management says their next effort is.
I don't see AEZS's management as a failure. I know they've developed one approved product, strongly believe we'll have a second by next year. If they weren't aggressively moving other drugs forward the revenue from what's soon to be approved could provide earnings that would greatly elevate the stock. The fact is that they have several other promising products and positive earnings will probably still be at least a few years off. Dilution may be required to keep full development going, however if it's leading to approvals it will be worth the price.
Gary
Regretfully I've learnd the Reverse Split was passed, here's a link:
http://sedar.com/CheckCode.do;jsessionid=0000ddLheKlC3ZOKoIyDKNUjM2l:-1
I only hope the company doesn't rush into it, and that they use no larger ratio than needed for a price in the $1.50 to $2 range.
I hope I'm wrong, but I suspect they'll go to the higher end of the scale, 1 for 8 and justify it by saying they're searching for greater Institutional investment. This argument proved bogus in other stocks that have done it, I hope it's not the case again here.
The way to get Institutional investment is by growing the price and sustaining that growth, not by a reverse split to achieve a particular share price.
I really still like the technology represented by the company, but I won't like the company as much if they do a reverse split before it's absolutely needed or is larger than needed to remain on the Nasdaq.
Gary
This could certainly be anticipation of what will be revealed in the Quarterly, tomorrow's webcast, and the outcome of the Special Meeting.
It's my belief that if investors thought the reverse split was passing, the stock price would be weak. Whether anyone knows or not, I believe today's price suggests the Reverse Split fails.
Should this be the case, with the stock nearly at $.50, I believe we'd see $.60 or more rather quickly if their is nothing negative in the Quarterly report. I wouldn't be surprised if sales in their approved product are higher than ever. They may have raised more money as well.
The market closed, we're above $.50 for the first time in ages. Perhaps we'll learn something on the quarterly release, that could come any minute.
Gary
If they should win this vote, I believe it's a clear indication that in spite of over 100 million shares being issued, a majority are held by a group of people loyal to whatever the company wishes to do. I've not yet seen one investor who posts who's indicated he's for the reverse split on these terms.
In my honest opinion, they weren't fighting to get this approved. I believe they put it out there very early to wake up investors as to what could be necessary. If they were fighting for approval, they'd have discussed the measure with investors before the proxies even came in the mail. They'd have held the Quarterly weeks ago to reinforce the reasons they need a positive vote.
I believe they either know it's a lock, or they put it out as a wake up call. If it fails, I believe the stock price will be up to at least the $.50 range, perhaps higher. If it succeeds however, we could see new lows for the year sending the price well below the cash value of shares.
For the long haul, drug success will reward us well, even if a reverse split is executed, however, I still believe we'll do far better if there is no R/S. Why? Because dilution is more easily justified when the share count is smaller. A company with over 100 M shares might go to 200 M over time, so doubling the shares may be acceptable. On the other hand a company with 25M shares has little problem reaching 100 M, far greater dilution in spite of the substantially lower share count.
Gary
They'll have the answer on whether they can do the reverse split on the terms presented next Wednesday. Frankly, I think they could be defeated as they've not justified this proposal at all.
Originally I believe they intended to speak about it at the Quarterly, before the Special Meeting, but they failed to do it. The Special Meeting is the same day as the Quarterly Webcase, only those in attendance could vote that day, all other votes must be cast at least the day before.
I certainly would support a reverse split over Nasdaq delisting, but it's far to early to make that decision now. With a six months extension, which should easily be achieved, we could make this decision in March of next year and still have months to make it happen. I would also want the terms changed more in line with terms I've outlined before.
If the vote does pass, it's an indication to me that the company has nearly complete control, even though few share are owned in Institutions. Virtually all the investors discussing this on various boards have indicated voting against the measures.
Gary
Something was clarified for me by emails with the company, Authorized Shares are unrestricted. I may not like it, but if they're unrestricted now and a reverse split is done, applying the same ratio is meaningless, they're still unrestricted. This isn't something I like in the company, and frankly I'm surprised that exchanges like the Nasdaq permit it, but in that they do, I'll stop pushing for reducing the A/S.
Gary
Guys, I really believe they are concentrating on the science, long term. Doing an NDA correctly is far more important than doing it quickly. It would be nice if they could do both, but they really are a small company with limited resources to put on this, or any other tasks.
As for the Phase III for AEZS-108, the companion diagnostic really is the right approach to take for a few reasons. The biggest is that with better identification of those who'll benefit, they'll get better results. As I understand it, the companion diagnostic will also be dramatically cheaper than what's been done up to now to identify the appropriate patients. The lower cost has several advantages, to begin with, it brings down the trial cost. After approval it will make it substantially cheaper to determine if patients are suited to the drug, this should make getting insurance companies, etc, to fund the test far easier.
Certainly, it would have been great if the companion diagnostic was developed months, or even years ago. As I see it Roche, who owns the company doing the work, is doing it to profit from its use. I'm uncertain if AEZS is paying for the development at all. The point is, Roche has examined the trial results to date and made the determination that approval is likely, so they'll be well rewarded for building the diagnostic. Frankly, I hope they're not being overly optimistic in saying it can be done this year and the Phase III Trial started.
My point is that as long as these things happen close to the company's schedule, they'll happen before next May. If AEZS needs to they can get an extension of Nasdaq requirement that takes them to May 2013. I don't believe a reverse split is needed until it's been found that all these things, and others, are not enough to put the stock at $1.
Frankly, I believe the stock could go above $1 any day Cancer Cachexia results are revealed, if they're positive.
Gary
My problem with them is that in the past, every time I've seen investors agree to an R/S, it has happened almost immediately after it was voted. I'm a strong believer in managements plan to develop many new drugs, I believe their pipeline is their strength. That said, at times I feel they're too quick to pull the trigger when it comes to financial issues, be it offering, or things like reverse splits.
I wouldn't care about voting to authorize an R/S now if the provisions were in line with what I've laid out before. I.E. not till the last possible minute, no more than needed to get the price to $2 or less, and a similar reduction in the Authorized Shares.
I'm not saying they must go to the very last minute before delisting will occur, but they could certainly hold the decision until a few weeks or less as long as they have the authority to do it. Clearly the rule requires trading for ten days at over $1, so they must do it 2 weeks before a delisting action, but I see no reason to do it a month or more before.
Gary
Pete,
I've seen few that have been voted down, but I've seen several that were pulled back when the company realized they would be voted down.
I believe the company was premature in doing this, and perhaps they did it intentionally to get investors thinking about what may be necessary in the future.
I suspect the company can determine how the voting is going at practically any time after the proxies have been sent. If they don't like what they're seeing, they'll reconsider the action.
I'm not saying actions shouldn't be taken to stay on the Nasdaq, I just believe it's too soon for such actions, and personally I won't support a reverse split that doesn't in some way address lowering the authorized shares as well. I'm not suggesting no dilution be permitted, but if the O/S is reduced to say 25 M shares I see no reason the A/S needs to be greater than 50 M shares. As the companies actions increase the share price dramatically, and some of those shares are used, I believe they'd have little difficulty getting investors to raise the A/S to say 75 M.
Investors don't want to limit a company's ability to operate, but dilution to ten times the current O/S is unreasonable, so the company shouldn't have nearly that many shares available. I know many companies where this wasn't controlled, and clearly they took advantage of it. I've got to believe that insiders in those companies controlled sufficient shares to make that happen. I don't believe that's the case here.
Gary
Does anyone know how many shares are currently authorized.
I email the company and asked that question over the weekend, and have yet to get an answer. I wouldn't be surprised if they're being besieged as shareholders received their proxies.
They should announce a quarterly webcast shortly, they previously indicated the reverse split would be discussed in detail then.
Gary
Pete,
I really don't know why you believe it will pass big, as I see it the company doesn't have major institutions or shareholders that should vote as the company dictates.
I could certainly be wrong, but without a clause that lowers the authorized shares proportionate to the R/S I encourage investors not to support it. If the company performed well in the future, had a dramatically higher price, and justified a share increase I'd have no qualms about granting it in the future.
I've seen the result of reverse splits where the authorized shares were unaffected, the result often being a series of reverse splits and new offerings paying to keep the doors open, while investors are being screwed. The most dramatic case is Genta where what was once a half million shares worth millions is now a single shares worth under a penny. I can only assume the company always controlled over half the shares, I don't believe that's the case here, but if no restraints are place on issuing shares, it could be.
Gary
Pete,
I've never seen a company who's managment was praised after a trial failure, nor have I seen a company who's management was criticised after a trial success.
I believe management is doing what's right long term for the company. I disagree with their R/S Proposal, but don't know the boardroom strategy they had for proposing it.
As a Devil's Advocate, I wouldn't be surprised if they put it out their now, expecting it to fail, but conditioning us to accept another proposal closer to the deadline if it's still necessary then.
I believe that management ought to be permitted to speak more frankly with investors, however between SEC, FDA, and other regulations as well as attorney's who'll sue for almost any reason, companies never really discuss what's behind everything they're doing. What I like about AEZS's management is they've managed to develop many drugs and bring them through the clinic without exceptionally early partnerships where nearly all the value goes into the hands of the partner.
While I doubt for the immediate future that any drug will go totally unpartnered with world wide sales achieved by the company. That said, if AEZS-130 doesn't prove effective for Cancer Cachexia, it's not impossible for a company the size of AEZS to fill the need for it as a niche drug.
Gary
I voted my proxies and also wrote Paul regarding the Authorized Shares now, and whether they're diminished when the R/S is done. I wouldn't expect an answer till next week, but I have found Paul normally answers questions quickly. If I state my opinion but don't ask a question, I don't get a reply.
I've clearly stated my objections to the R/S and suggested an alternative I could back, that got no reply. I'm still interested in what the company has to say.
In another company, GNVC, a great deal of pressure was put on investors to support an R/S. I had a difficult time voting my shares, but believe I voted them. The measure succeeded by a tiny fraction of 1% when a major investor who routinely had been against the R/S was pursuaded to change his vote before the meeting closed. That was a 1 for 10, no choice by the Board and the stock's gone no where but down since, in spite of some good news. I kept a few shares, but sold most at a big loss.
I believe AEZS has greater potential, but potential can only be realized by drugs advancing and being approved.
Gary
It's good to see our CEO's buying on the open market. Here's a link:
http://www.cantechletter.com/2012/07/insider-buying-at-aeterna-zentaris/
It's also good to have the Proxy for the vote. Yesterday I spoke to Fidelity who after nearly a half hour on the phone could find nothing, today I got the filing for both Fidelity and Scottrade accounts.
Gary
Frankly in the last few weeks AEZS has announced all they could to create some interest in the company. This mornings release is just another example, it's not new news, but companies can only speak about results after peer review, and this constitutes as peer review.
The fast track announcement got very short term interest and it's important to ask for it, more important if it's granted. However if the time spent with the FDA in establishing the criteria required for such actions took several months, it might have been better to get the NDA submitted sooner. Please remember, I said if, I don't believe the time they've spent with the FDA was primarily for Fast Track, I believe it was to be certain they had a solid NDA being prepared which answered all the questions or concerns that discussions revealed the FDA has about the product. Such discussions don't guarantee success, but not doing them and leaving concerns the FDA would have expressed in discussions unanswered, you practically assure failure.
Investors may be frustrated with the time it's taking, but all will be forgiven if approval results. Should the filing come by October, approval could come by April, less than a year after the Nasdaq requirements letter. It's certainly playing with a double edged sword to put off doing a reverse split on this news alone, however, many positive other events could occur prior to the potential approval which almost certainly takes the stock to well over $1.
Short term, besides filing the NDA, I believe the biggest news may involve the same drug applied to Cancer Cachexia. No one seems to expect much from this trial, if they did, the stock would already be well over $1. If results are positive, no telling how high AEZS may go. AEZS-130 today is viewed as a NICHE drug, perhaps capable of earning tens of millions, or more for AEZS. Add Cancer Cachexia, the drug suddenly gains BLOCKBUSTER potential. In that this drug is wholly owned by AEZS, it will without a doubt attract a partner willing to pay based on the potential. Such a partership, with an NDA already in place, could potentially bring in hundreds of millions, or more. What's that worth, I cannot say precisely, but the stock price should be far closer to double digits than under single.
Gary
AEZS ought to be announcing a quarterly webcast some time soon. It was indicated that they'd discuss the special meeting and provide their reasoning for investors authorizing a reverse split at that time, it ought to be well before the special meeting.
While nothing they can say would get my complete support for the action, I do want to listen. I'd be willing to modify my position if management provides some limitations to how far they may go, but I'd prefer it in writing. I also cannot see why the rush to do it in August when the delisting doesn't occur until November without an extension, and May if they gain the 6 months extension if needed. In short, they have a long way to go before they have my support, and I hope most investors agree with me.
The key to stopping the R/S is getting everyone possible to vote. They only require 10% of shareholders voting and management probably control that many votes or more to begin with. We know all those shares will be voted. Without many investors saying no, they'll get this passed, we must vote if we want it stopped.
Gary
I don't have that many shares, but if many of us wrote with essentially the same ideas, I believe they would listen.
The company generally communicates well, but you only get the corporate line. I did read where someone indicated a late 2013 date was when they anticipated the R/S, there is no way I know of that they could delay the Nasdaq delisting that far, so I believe there is some problem there.
It's my understanding the company will discuss their intentions at the next quarterly meeting, I'm uncertain of the date, but it's before the special meeting. My problem with this is that regardless of whatever assurances they make about waiting on the R/S or doing the least severe R/S, we are authorizing the Board to do whatever they choose. While I believe you should trust management, I've previously seen boards so eager to achieve the $5 level where Institutions can get in, they went for the extreme.
Nothing I'm suggesting prevents the company from at some time in the future requesting shareholders to increase the authorized shares. I've seen to many reverse splits where the A/S wasn't dealt with and the company, who's A/S was very high, just issued shares at will, running multiple additional R/S's, but never diminishing the total authorized shares.
Gary
I answered the company and spelled out the following as what I'd want to see in a proposal I could support:
1. A reverse split won't be done until all other possibilities to elevate the price have failed, and all extensions are either not permitted, or are about to expire.
2. The specific rate to be used will not build a price that's greater than $2.
3. The number of shares authorized will be reduced by the same ratio as the Reverse Split.
This is far from the current proposal, but I believe this is a proposal that most shareholders could support. Remember the first item, no reverse split until all other possibilities, including extensions, are exhausted.
I believe what I'm suggesting is reasonable, what do others think about it.
Gary
If I remember correctly CLSN reported after speaking with the FDA that they'd not be taking another peek, but the trial should conclude later this year, just a few months later.
Peeks rarely end trials, probably less than 1% of the time as the statistical penalty at the peek is so high. The last peek indicated we were almost there, thus the recommendation for another one, but it's not to be. The message from the peeks ought to say barring a disastrous shift in the data, approval ought to be a slam dunk at the end of the trial.
Right now I frankly only hold options, I plan to build a substantial number of shares or hold substantial options before the top line results are seen.
By this time next year ThermoDox could be approved, or very near approval. I believe by that time the share price will be a multiple of the current price, but hard to say just how big a multiple. Give it sufficient time and a ten banger or more is certainly possible, but I don't think it can come until sales build and a partnership is probably in place.
Gary
I've written the company and received an answer about how they'll explain their position at the quarterly, which will proceed this. Frankly it wasn't terribly satisfying.
I believe this action is both premature, and too open as far as the discretion it permits the Board to take. I believe the board can choose anywhere from 2 to 8 to 1, but previous R/S's I've seen always had the Board taking the largest, attempting to bring the stock to $5 or more with the excuse it attracts Institutional Investors. History has proved this doesn't work, Institutions invest in company who grow the price to $5 or more, not by achieving it by R/S.
I probably will reply to what I was sent. It's my belief that a R/S should be done only as a last resort, and the size of the R/S should only be something that would bring the price somewhere between roughly $1.50 and $2.00. Grow the price from there and you'll certainly attract Institutions. Price it above $5 and you'll see the same result GNVC who recently did a 10 to 1 that I opposed did, now trading down about 60% below where the R/S put the shares.
Don't get me wrong, some R/S's work, most do not. If the company does a minimal R/S with the support of most investors, it can work and work well. The key is executing the business plan and I believe the odds better than even that if they execute their plan, and request the 6 months delay in delisting if needed, they won't need the R/S at all. The only way I'll personally support a R/S effort is if it's clearly to be the last resort, and it's to be done at minimal levels.
Gary
Did anyone listen to todays presentation? I did, and while I found little new in what was said in the presentation, there was a question at the end that went into what sales AEZS-130 may bring in HGH detection.
If I remember the answer over 100K people should be tested annually and a price of $500 was mentioned for each test. If this proves to be roughly correct, and if in partnership AEZS gets 20% royalties, it would equate to over $10 million a year or about a dime per share in earnings. To me, that ought to be worth $1 to $3 in share price for this drug alone, and I believe they were speaking of the market in North America and Europe alone.
Frankly it's purely speculation on my part, but I believe part of the reason for delays in filing the NDA may be tied to the cancer cachexia trial. While it shouldn't matter, the FDA may want to know if the Phase IIa Trial shows it's effective in cachexia. Why? Because with no currently approved treatment, the FDA knows that should the drug be approved for HGH deficiency testing, nothing would prevent its off label use for cancer cachexia if Phase II data looks positive. This could subject the drug to added scrutiny, but it should dramatically increase it's value. As I say, it's just speculation on my part, but AEZS management won't commit to anything other than an NDA filing this year. The Phase IIa Trial could report preliminary findings by fall of this year, if positive, you won't need to worry about the Nasdaq listing, in fact you might go shopping for a new car, boat, etc.
Gary
Remember, a broken clock is correct twice a day. I suppose a corollary to that ought to be that most of our watches never are correct unless they're adjusted to the accurate time maintained by the atomic clock.
I frankly keep my watch close to the time I see on my computer or phone, not precisely, but close. I don't believe I can accurately say when we'll see big news from AEZS, or any others. What I do believe is AEZS has the potential for all sorts of great news from a pipeline of drugs that's quite broad for a company with such a small share price and market cap.
As for events, like filing an NDA, I believe it's up to the company to say what they're doing. Some companies announce when they intend to do it, when they do it, and when they receive notification of it's acceptance, or rejection, by the FDA. Other companies may only say that their NDA was accepted, if it's not, we'll not even know it was submitted.
Clearly if an NDA is tied to a payment it must be revealed as material, but in AEZS's case, AEZS-130 is wholly owned by AEZS, so it's up to them as to how much, or little they wish to reveal.
I would hope we get new guidance at the upcoming conference where they're speaking, but it's up to the company what they say, and when they say it.
Gary
Derek,
Maintaining a Nasdaq listing certainly concerns investors, and should concern the company. That said, if they maintain their business plan and follow through with NDA filings, trials, and if they receive positive clinical data, it shouldn't be a problem by Spring 2013.
I'm saying Spring 2013 because they can almost certainly qualify for a six months extension of the requirement. Their business plan doesn't necessarily have that many things occurring before the six month deadline hits.
Certainly they should have filed the NDA for AEZS-108, but it's results in Cancer Cachexia may not yet be known by then, and they'd be foolish to partner the drug before it's known if a niche drug may really be a blockbuster.
Likewise, they may, or may not, have the companion diagnostic ready and have started the Phase III for AEZS-108, they've told us they don't intend to partner it until the Phase III has started.
The initial peek at MM data for Perifosine isn't anticipated till first quarter of next year. I wouldn't expect anything new partnership wise until at least the DSMB has made their recommendation.
In short, there is all sorts of things happening that could warrant a price well over $1, but most of these things won't be until late this year, or early next. Value shoppers should recognize this company is dramatically underpriced for all they have to offer, but there is no guarantee it will happen before November when the six month period runs out.
We're a long way from anything drastic needing to happen, but I'd be lying if I didn't think they'd use a reverse split before they'd allow the company to be delisted. I hate reverse splits, and would fight management if they pushed it, before going for the extension, but I recognize it could happen.
We have four more months before we even need to consider an extension. Should they announce the filing of the NDA for AEZS-130 sometime soon, that itself could resolve the problem, but if it didn't, it should put us much closer to it being resolved.
It's my belief that Cancer Cachexia is really the joker where if positive results are seen, no telling how high the stock may go. Remember, this disease has no approved drug which AEZS-130 is competing with, and ultimately the weight loss suffered by its victims often leads to death from other systems shutting down well before the cancer would kill the patient. I do believe a niche drug which should easily be approved could suddenly be thought of as a potential blockbuster, perhaps many times over. I don't know how high it may go on positive cachexia news, but $1 should be no problem at all. These results should be known by year's end.
Gary
It's my belief that the Japanese authorities won't approve a drug without trials performed on sufficient Japanese patients to verify it works with them. I believe they continue a trial in colon cancer in spite of the failure by KERX, I'm uncertain if the protocol is identical.
The fact that they'll invest further funds should be seen as a positive. I'm uncertain that they must go all the way throught Phase III in Japan if FDA approval occurs, but clearly they won't approve on U.S. data alone.
Gary
I believe the allegation is they got the news on the trial failure and sold shares from the ATM before announcing it. While I doubt they were foolish enough to do it, I can't imagine that they had the results for very long before it was announced. If they had a standing order with those doing the ATM, it might also have been a security violation if they halted the sale before an official announcement could be made.
I believe this is purely a nuisance suit, but attorneys make substantial funds with suits that are settled because it's cheaper to settle than fight. It's the attorneys, not investors who'll see most, if not all the settlement money.
Gary
Retrenchment had to occur at some point. Hopefully we close a little higher than we are right now and tomorrow build to above $3 again.
I'm holding July $3.50 calls and still believe that I'll convert at least some of them to shares in my account by 7/20 when they expire.
Gary
If there is to be a PR, I don't see why it can't be intra day, after the presentation is either started, or concludes. I'm not a huge believer in the fact that gaps caused by such releases must fill, but if the release comes intra day and has really positive news, I don't believe it creates the gap.
The only real question is whether cancer cachexia is addressed, and if it is, what's said. If even a few patients have their uncontrolled weight loss stopped, it could be huge. The fact that a bathroom scale gives all the information needed on efficacy would make this a very simple trial to run and results should be known nearly immediately.
Gary
I'm uncertain of when AEZS can release a PR based on what's presented. In the case of certain conferences, once a presentation starts it can be done, but that's not the case in every conference. In some case, I don't believe PR's can be issued until either the day, or the conferences conclusion.
Does anyone know what's the case for this conference.
I would also suspect that a PR will be based on the planned presentation by the Doctor. If questions or a break out session lead to additional information we'd love to know, I doubt if we'll hear about it unless someone who posts on a message board is in attendance.
I often think it's the breakouts and q&a's that often follow webcasts concluding that produce the best information, and it's only shared with investors if a poster is in attendance.
Gary
This stock is currently flying way below the radar. Few are watching what happens day to day which makes it possible for MM's and Institutions who want to keep a lid on it to do so while they load up with cheap shares. At some point either news, or these very same people, will say it's time to move this puppy and in very little time it could be trading somewhere between $1 and $5.
Imagine the market reaction to any one of the Big Pharma's partnering with AEZS for any one of the products that are currently in, completed, or approaching Phase III Trials. I'm not suggesting this will occur any time soon, but it will happen with either a big Pharma, or many smaller regional Pharma's at some point.
The Street's current view of Perifosine remains failure, in spite of all sorts of trials which say otherwise. Should AEZS either gain a partner for North America, etc for Perifosine, or announce the continuation or better from a peek at the MM Phase III Trial, the Street's perception ought to change.
I don't see any of these things occurring imminently, the company has given timetables for when they want to partner the various drugs, they've said when they expect to take a peek, begin a trial, etc, none of these are imminent.
There is an event which is imminent, a presentation on AEZS-130. On one hand we all know it works for the detection of HGH deficiency, so it may just reinforce what we know. On the other hand it's being done by the same clinician that's trying the drug on patients with cancer cachexia. Should anything be said about observing any degree of efficacy in the early stage of this Phase IIa Trial, it could totally change the perception of what's otherwise viewed as a niche product.
I'm certainly no expert, but as I understand it many who develop cancer cachexia ultimately die from the frailties in their bodies due to the weight loss, rather than the cancer itself. With a simple bathroom scale, rather than complex medical testing, determining if the drug's working or not, I believe if required a Phase III Trial for Cancer Cachexia could virtually enroll thousands of patients if required, and be run in a matter of months, not years. That said, in that there currently is no approved product for this, I wouldn't be surprised if expanding a Phase II could make it a registrational trial.
In short, it could be as early as next week that we get a hint about the potential of the Cancer Cachexia trial, or it could be later this year, when it's due to end. Either way, if the news is positive, this could be the game changer. Add this to an announcement that the NDA's been filed for AEZS-130 for HGH deficiency and you have the making for potentially explosive growth. Also, once the word is out that AEZS-130 has benefits in cachexia patients, how long do you think it will take before AEZS has a partnership offer for the drug it cannot refuse.
Will it be next week, or nearer years end that we get the story straight, I wish I knew. I'm only pointing out the possibilities, any one of them could easily bring a double or more from where we are today.
Gary
I think we all need to recognize that Perifosine's long term outlook is still bright to brilliant, it's just taking longer than we planned. While new costs must be accepted by AEZS instead of KERX, it's potential value has grown tremendously to AEZS with KERX dropping out except for tiny royalties.
Does anyone doubt that with the sort of data we're getting that someone far bigger than KERX will want the North American, European and other markets. The only question is when will AEZS want such an event to occur. I suspect it won't be before they at least get the recommendation from the initial peek at the MM data.
As I understand it, the monitors can't reveal the data unless they say stop the trial, either for exceptional efficacy that meets requirements for early stoppage, or for futility. What I expect is for them to say, continue the trial, essentially indicating that data to date is at least in line with what's needed in the end.
Gary
I sure hope so, I made another buy today, at this price I couldn't hold back, but I certainly have enough now.
I'm headed out to Avalon till this time next week. We have limited internet access there, but I'll be watching and hoping for some positive news.
Gary