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Thanks I have a penchant for factual accuracy which is unfortunately offset by a penchant for typos.
I in now way dispute your 200m estimate. Quite frankly it's probably a bit higher but just can't tell. It's definitely in the ball park
It's hard to tell the true impact of the convertible from a dilution perspective because of the hedge they entered into concurrently to offset the potential dilution. If ariad could ever make money one quarter we would get better insight into the shares outstanding from a diluted basis.
For those that don't know how it works the company has to disclose the weighted average shares outstanding on a basic and diluted method. In laymen terms the dilutive method adds additional shares to the amount outstanding for any options warrants etc that could be exercised that are "in the money". However these amounts don't get added when the company is in a loss position because it's anti dilutive to an EPS in a loss position
Long story short we would have better insight if they were making money.
Those shares are included in the diluted and basic shares outstanding. It is correct he filings are there to see for yourself. Nominal increase in shares outstanding. Those shares you speak of will never be exercised absent an increase I share price and we also hedged by purchasing derivative options offset the dilution. I remember the transaction well
On a related note I apologize if I miss understood what you were saying last night. I thought you were saying that the assertion that there were 90 million shares at the time of the crash was close enough. If that wasn't the case, which in seems from the tail end of our debate, then Im sorry for the confusion.
Here are the share amounts for Ariad then and now. I took the amounts from Ariad's September 30, 2013 10-Q (closest filing to the crash) and Ariad's most recent 3/31 2016 10-Q. The change in shares issued and outstanding as well as the shares computed under the basic and diluted method are very minor. I've also looked up the number of shares outstanding under the employee option plan. While that number has grown the delta is immaterial to the company shares outstanding. See below.
Shares outstanding at 9/30/13 185,611,272
Shares outstanding at 3/31/2016 191,060,140
Weighted average shares outstanding under the basic and diluted method at 9/30/2013 185,238 (in thousands)
Weighted average shares outstanding under the basic and diluted method at 3/31/2016 190,304
As of 9/30/2016 there were approximately 10 millions employee stock options outstanding with an average strike price of $13.
As of 3/31/ 2016 there were approximately 13 million employee stock options outstanding with an average stock price of approximately $9.
Conclusion. There has not been significant dilution through the issuance of common stock during the period since the crash. If memory serves there has been no offerings since.
Oh ok great so you think 90 million was a ridiculous assertion. Great that was my point.
Here is your post
"If one estimates from a mkt cap of 3.7B and a share price of 25, you get 145mm shares or so. That's Close enuf I think."
Close enough to what if you are speaking about his assertion that there was 90 million shares when the stock crashed
I'm familiar enough with the shares outstanding of my investment to know that the number hasn't more than doubled since the crash. If you don't that's fine. I'll post the amounts per the filings tomorrow. At this point i'm not debating the exact amount I'm pointing out that 90 million is not the same as a145 million and if you think it's close enough then I think that speaks volumes.
I'll look tomorrow but if it's 145 million that is no where close to 90 million. You can do that math and figure out the percentage difference yourself of 90 million and 145 million. I hope it's 145 million because it proves my assertion that 90 million is WRONG
His Estimate was 90 million shares and you think 145 million is close enough then you should evaluate your commitment to accuracy
Wrong they haven't issued 110 million shares from the crash. 100 percent wrong
Holiday weekend effect
Do people remember. Did pona have a compassionate use program before it was approved? Did Rida have a compassionate use program before it failed to receive approval?
Had they over charged there would be no reversal to revenue because no revenue had been previously recognized. The credit would be to cash because we would have to pay someone back. Ultimately I don't know how France or another countries with with similar reimbursement systems normally handle these arrangements where they are making sales prior to the reimbursement amount being approved but I kinda doubt you get over paid in that period. But who knows.
I have no idea what the price that was charged over the period that the sales were made but Im sure payments were being made in an amount that was either A) an amount expected to be recognized or B) sufficient to cover costs etc. More likely than not the likelihood would be scenario A and if that was the case the journal entries would be something along the lines as what follows using $100 as an amount to illustrate the example.
Upon french sale prior to an agreed upon pricing amount:
Dr (Debit) Cash 100 - to record payment
CR (credit) Deferred revenue 100 - to record a liability for revenue that can't yet be recognized.
Dr (debit) 15 (some type of asset account along the lines of capitalized costs" - To offset the cost of inventory outflow so that the income statement effect is zero.
Cr (credit) Inventory 15.... Note this would be the cost of the drug which would be significantly less than the cash received, again these are fictitious amounts
Net effect on the balance sheet would be zero. Net effect on the Income statement would be 0
At the time the reimbursement amount was approved the journal entries would something as follows:
Dr. Deferred revenue 100 - to eliminate the liability account
Cr. REvenue 100 - to recognize revenue for the previous transaction
Dr. COGS 15 - to reflect the cost of inventory that had already been delivered
CR. 15 Asset account listened in journal entry 3 above - to elimate the deferral account for inventory that had already been transferred
The incremental journal entries would depend on whether the adjustment was greater or lesser than the cash received at the time of sale before the revenue could be recognized.
There would be no restatement of previous financials. All revenue would be recognized in the period when the pricing was finalized and the effect on the asset/liability accounts would be trued up in the current period. Sorry if this isn't that great of an example you've caught me during "wine" hour.
oh so you didn't unload at 6? You decided to hold instead?
Just curious based on this post if you decided to hold or sell back when it got to 6? I thought ARIAD was a good hold at this point and its raised since. Im still holding because I think ARIAD has a good amount of appreciation potential given the positive results of its drugs and its potential for a buy out. What about you?
As a long time owner of ARIAD (over a decade), a fact which probably disqualifies me to give advice on investing, I have a few observations of the state of affairs and the collective views on ariad as presented by "us" this board's members. With the exception of a few thought provoking posts most fall into one of the three categories now.
1) I'm going to cut off my nose off to spite my face (your face being your investment in ARIAD)
2) I choose to ignore that which is in front of me because I do not want critically assess how it affects my investment (Ariad)and;
3) I speak in absolutes as to what happens next, when what happens next is far from absolute.
Its literally this everyday on both the positive and negative ends of the spectrum.
I think you are mostly right (maybe all) but someone could confirm by looking at the 10-K. It certainly is "accounting revenue" and they likely received the cash or at least a hefty portion of it as the sales were taking place. There probably is some true up amount and hopefully that's a net inflow to ariad. If the amounts were great enough they may have been broken out somewhere in Ariad's balance sheet or footnote.
No that 25 Million of revenue being recognized was for sales that had been taking place for 1 to 2 years. It just took this long to settle on the price. One of the requirements for revenue recognition under SAB 104 is that "The seller's priuce is fixed and or determinable." Until now they did not meet that criteria so they were unable to recognize any of the revenue for previous sales in france. They just recognized the cumlulative revenue for many periods at once.
Margins are 90% but you have to pay a sales force and rent etc etc. We don't have to pay any of that anymore.
They got 140 million plus royalties of 32 to 50 percent. Going off memory so if I don't have the figures correct let me know. Last I checked royalties go straight to the bottom line. No overhead no costs pure profit so saying we sold this at the pawn shop doesn't make sense to me. Oh and also, potential milestones. I think this deal is a smart move. Reduces costs up front and a slice of the revenue going straight to the bottom line. Doesn't sound awful to me. Plus, unless we were getting sold tomorrow we needed cash, what else would you have them do?
Still around...... trying to avoid reading the constant back and forth but very glad to see there was some tangible news today that requires little to no speculation. Results look good so far, can't argue with that!
I no scientific or medical expert but these results seem pretty compelling to me. 100% survival? Pretty Pretty Pretty good.....
"The updated data from the Phase 1/2 trial of brigatinib show a one year overall survival rate of 100 percent in crizotinib-naive patients, and 81 percent in patients with prior crizotinib treatment," stated Rafael Rosell, M.D., Director, Cancer Biology & Precision Medicine Program Catalan Institute of Oncology, Germans Trias i Pujol Health Sciences Institute and Hospital in Barcelona, Spain.
Yup I looked through their policies online for something as well. My hope was to provide you with concrete evidence that you were wrong. Ha! Couldn't find anything either. I doubt that means they don't have a formalized black out period, but they certainly might not.
If you really want to know ariad's specific black out period feel free to email them. But the way they typically work is at the close of a financial period (in this case December 31, 2015) and sometimes even prior to the close of the period (usually 15 to 30 days) an individual is precluded from purchasing or selling stock during the black out period. This period lifts after the company announces earnings. That's how it works. Each company can define their black out period the way they want. They can also say which employees the black out period relates to. Its driven by the company. That's why the window is typically very small for executives to purchase and sell stock. All of this is secondary to the SEC rules on trading on insider info. If ARIAD has a black out period then it likely started 1/1/2016 and wouldn't haven lifted until they announced earnings. Companies with faster close period have shorter black out periods and the black out periods for quarters can be shorter because the companys often announce earnings faster do shorter filing windows
The point is we don't know what ARIAD's specific policy is and therefore we don't know if Denner had the opportunity to buy. If Ariad has a typical black out period then he didn't until the announcement of earnings.
What do you mean the window has been open for two months? They released earnings on the 23rd of February. That's the day the window opened. Its been open for 15 days of which none of those days did the stock close in the 4s. So this notion that Denner passed on buying in the 4s is false.
Agreed thanks
Agreed they definitely cannot. We are both on the same page.
There are the Windows which the employees and board must follow. Those are defined by the company. However the premise that no insider may buy or sell based on information held by that insider is the sec rule and supersedes any window defined by the company. The "insider"must comply first with the insider trading rules and secondarily must comply with the company defined trading periods irrespective of information held. There are plenty of periods outside of the company defined black out period where an insider would be precluded from transacting, whether sales or purchases. My point is that the failure to purchase stock, by an insider, during a short period of time, is not a conclusive piece of information with respect to their view of the appreciable potential of the stock because a non insider doesn't know what the "insiders" are privy to and whether or not they can buy or sell. As the chairman the ability to buy/sell is the most restricted as they clearly have all the info.
You are not privy to what insider information Denner has so you are not privy to what period of time he can or can not buy or sell without an approved plan.
That's 100 percent wrong. If Denner was buying using a private account he is still subject to the same insider trading rules the same company designated black out periods. That is a wrong statement and 100% misleading. WRONG
Your assertion that Denner had a chance to buy in the 4s is without merit. Insiders can't just buy and sell on a whim. There are trading rules that apply to them which is why so many who want to sell use 10b5-1 plans. Anyone who assumes Denner didn't buy because he didn't want to is falling subject to the old adage of assumptions.... they make An ass out of u and me. Doesn't mean he wanted to buy but one certainly can't assume the opposite.
We have a year until the cash situation becomes a cash emergency. They better hurry up.
Not sure if ariad has found a bottom but the overall markets have definitely not. Absent some news..... Buyout something drug related Etc, we likely follow the broader market.
No offense taken 2da.
Back to ariad. With the stock price falling at what point do you think big pharma swoops in. Market cap down to 800 mil now. I know the markets are in the shi**er but big pharma would seem to be insulated to the economic downturn. Absent changes to reimbursement policies in the US they remain profitable in most any economic climate especially the cancer companies. So at what point do they say lets burn some cash and pick up some cheap biotechs. If someone doesn't show interest at prices below this I think it's concerning for ariad.
If we are going to make statements lets demonstrate how they impact ariad. So the stock market is tanking and that certainly doesn't help ARIAD. Whats the impact of negative interest rates on ariad? Do we expect the stock market to fall more than it did in 2008 when we had interest rates of zero and thus we expect ARIAD to fall below its low in 2008 of .72cents? IF not what is the big difference here as it equates to our (The U.S) stock market and more specifically how it imapcts ARIAD. Big difference to what?
One can't be right just by throwing out buzzwords otherwise Donald Trump would never be wrong. One must be able to correlate it to an impact. Saying its a Big difference without any discussion as to why is meaningless and has as much substance behind it to sound like Donald Trump's plan on dealing with china.
I completely disagree.
Sorry BR while you are correct that negative interest rates mean stress in the system I'm pretty sure that's how we got the low interest rates as well. That 2008 year had plenty of stress in the system. Im betting more stress in the system than we will see here. Either way people have to put their money somewhere. Where are you going to put yours? A money market account earning a negative yield or the stock market? Your other option is under the bedroom mattress. I can tell you the yield on that investment is 0% but it comes without FIDC and the cost of the armed guard will cut into your zero percent margin.