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Fbg, I fundamentally disagree with that view. Companies are not sold based on what feels ok to retail investors who are tired of their investment. I understand your frustration after 8 long years of holding, but a sale will only be based on the assets that ADXS has.
Picture this: AMGN comes to Lombardo and says, "We want to buy you out for $25/share" to which the former responds "Can you tell me how you arrived that price, so I can inform my board?". Do you really see AMGN simply saying, your SP is $6.50 as of 7/12/17 and we are offering you a 300% premium, NO MORE EXPLANATION".
Think about the glaring flaws in this offer.
1) It is based on the SP to which HFT has brought it down and presupposes that it will never ever rise up again, based on its near future catalysts and clinical progress.
2) It refuses to acknowledge the worth of any of ADXS' products individually, based on clinical results till date and anticipated milestones. I see you talking about the deals with AMGN and Sellas but nothing about Merck and BMS, even if not monetized yet.
ADXS will not be sold tomorrow morning based on the utterly manipulated, HFT-driven SP we are at now. If it gets sold, it will be based on a reasonable premium over a more fairly priced stock, which accounted for all of ADXS' products. This will happen in the next several months, give or take a few.
I urge you not to push this low ball buyout, not because it will happen as a consequence but doing so constantly will only create an image of "heavily manipulated stock with not too much upside" in the minds of vulnerable retail who might otherwise buy this. In other words, you are hurting yourself, even if unintentionally.
Lastly, why even insist on putting a number on the buyout? We'll see what the offers are for when they come.
Well, a few things.
I agree that it is atypical for companies to be offered an 800% premium over the current price in most instances, like it was for TBRA. Which is why I also provided the example of Celator (CPXX), which was run up from $1.50 to $15 in 3 months in preparation for a $30 buyout. Only a 100% premium.
CPXX wasn't offered a $3 buyout by Jazz when it was trading at $1.50. However, that is fbg's logic for ADXS. Unless we are selling tomorrow morning, ADXS' current $6.40 SP means absolutely nothing. And therefore fbg's $15 to $20 number has no basis.
Additionally, the current share price of ADXS has been arrived at in the last 1 month due to massive shorting on top of what already short numbers. It was also demonstrably manipulated in multiple instances using insider info and HFT. Recall the $22 to $14 take down in 1 minute on September 17, 2015 right after the best ever GOG phase 2 results were released? Yes, ADXS is also an ATYPICAL stock.
BPs will be aware of the true value of this company when the time for buyout arrives. And it sure as heel won't be anywhere near $20.
Perhaps you have heard of two small cap biotech companies that were both acquired in 2016 by larger pharmas: Tobira Therapeutics (TBRA) and Celator Pharmaceuticals (CPXX).
TBRA was acquired by Allergan for $49.84 a share, with $28.35 of it in upfront payment and the remaining in milestone payments. It was an 800%+ premium. The day before acquisition, TBRA was trading at around $4.90.
https://www.allergan.com/news/news/thomson-reuters/allergan-to-acquire-tobira-therapeutics-expanding
CPXX on the other hand was run up by hedge funds from around $1.50 to $15 in a matter of 3 months with absolutely no indication as to why. It was acquired for $30.25 by Jazz pharmaceuticals.
Neither hedge funds nor large pharmas are stupid enough to evaluate a company's worth based on its share price at a given point in time, especially when shorts can use HFT to pin it anywhere.
In fact,DOC himself was extremely likely to have been fired even if the share price of ADXS was $15 instead of $6.50 on the day of his exit. He was fired for not choosing safety via strongly monetized partnerships and ensuring stability (accounting for unforeseen clinical events and macro-economic conditions), not a senseless number that could be taken anywhere by HFT, as it was to $30 in 2015 or to $16 in 2016 right after the AMGN deal.
While it looks outlandish, given where the stock price is, it is not unusual at all. Severance packages for high level employees, especially executives, are negotiated prior to their being hired given the risk that they won't find comparable employment elsewhere quickly enough, if they do find it at all.
In any case, I doubt that DOC was pushed out due to outright "non-performance". Institutions simply find his direction for the company misaligned with theirs, with regard to mitigating risk by monetizing some assets ASAP. I don't disagree with his ouster, even though I think he did perform well in some ways.
Raja, it is not true that CEOs of biotech companies are removed only due to "bad data" or clinical adverse event, especially when this specific one is treating patients with advanced cancer. Moreover, there is a scientific advisory board at ADXS that would have had a greater say on which cancers to fight, which large pharmas to align with for the combo trials etc. Assuming there is even bad or ho hum data, that would be no reason to remove the CEO. Which is why after the clinical hold was removed the last time, it was David Mauro who took the fall for failing to exclude trial patients with implants.
We already know that EU submission for HRLA Cervical cancer will happen this year based on data that is "already" the best ever. That will be the first major revenue source for ADXS, or more likely for the company that will acquire it. If EU prospects look good, success in other indications or combinations will matter less. Tutes know this. That is the insurance that tutes would want the company to stich up, either through a big deal with a partner or by selling the company outright.
Dan has seemingly resisted the "safety first" approach for investors' money and likely (based on evidence till date) wanted to go it alone and make ADXS a standalone commercial pharma. This is no doubt a risk and likely require more waiting. I believe he paid the price for this strategy with his job.
Seems extremely unlikely that he resigned voluntarily. If that were the case, he would have transitioned to the incoming CEO himself over a few weeks or at least a couple. He was removed with immediate effect and was wiped out instantly from the ADXS website.
He probably was given an option to resign, along with a few kind words delivered publicly to save face, since he did have some notable accomplishments, or be fired with no dignified sendoff. He chose the former.
I agree with Ignatius. I see a big deal or buyout coming. After a sustained SP run up over the next few months if it is the latter.
To be honest, I am not surprised by this development.
If we think about it, the President of the US is evaluated on performance every 4 years (actually less than that if you subtract campaign time). How was the ship of state, which is by every measure about 10,000 times larger than any speculative biotech and more complex, guided during that period? Have we progressed in a manner that 'feels' like progress in a tangible way? By this measure, it is hard to argue that Dan did a good job.
It is true that he did a fine job in advancing ADXS clinically and capitalizing it comfortably by aligning with reputed institutions. It is also true that ADXS has been and continues to be the target of manipulation of a magnitude that I had rarely seen before (except perhaps Dandreon and Mannkind). But the buck stops with the leader, in the sense that the only way out of this manipulation is to deliver the kind of catalysts that would rid the company of these parasites. It is in this aspect that Dan had failed to deliver.
While running a spec biotech is not the same as gambling, I would still draw a parallel here. You don't 'go for broke' by doubling down on a go it alone strategy, no matter how confident you are about the science. Unforeseen events happen, like the unfair clinical hold. Or the biotech macro environment worsens suddenly preventing capital raises at desirable prices, meaning larger stock dilutions.
But with all this said, the company appears to be in good shape in every way beside the share price. Let's hope the new CEO delivers decisively and decimates these short manipulators. Good luck to all of us!
It probably is. It just had more detail :)
I am in total agreement with you here; I couldn't care less if they discontinue their combo with AZN after phase 2 either. I too trust that BMS has done its due diligence when it signed up for their own combo with ADXS. I only resent that this non-issue was allowed to be used as a stock takedown excuse.
Thanks Ignatius, especially for the insight on the AZN combo trial.
Somehow, based on some other long's post here a few days ago (I forget who it was), I thought IR had confirmed that the combo Phase 3 cervical would now be with BMS (Opdivo + ADXS-DUAL) while the combo trail with AZN would be continued only until their current Phase 2 is completed. So I thought it was an attempt to transition directly into a Phase 3 trial with BMS and not have a parallel one continue with AZN as well. But you may be right here as I am basing my whole understanding on this one post from someone.
Well said and observed, Doubledown. One couldn't have put it better :)
Hey Ignatius, I have been watching you put in an increasingly valiant effort, along with a few others, to explain what's going on here. Thanks for that.
The way I see it, what's happening with a bunch of genuine longs here is that exasperation with the stagnant stock price has truly set in. Perhaps it was to be expected after being invested for quite a few years. Through persistent suppression over a multi-year period, the hedge funds have succeeded in reversing how some longs appraise the company: by retrofitting its platform and clinical products to the current stock price instead of evaluating the market place to estimate a future value. This entirely defeats the purpose of setting price targets for any company.
There is no question that the existence of HFT is ruining the very foundational principles of what was supposed to be a free market. I really wish people would see level 2 to observe themselves the atrocities and financial vulgarities being committed on this stock (and many others).
I think it's human nature to be despirited when something you are so significantly invested in is under siege for this long. So I understand the frustration that some are expressing here even if I entirely disagree with the conclusions. The platform has proven to be sound, based on current results.
If I have a quibble with the company, it is that they made a judgment and communication error by surreptitiously indicating the AZN trial de-emphasis in the corporate presentation. They also appear to have confirmed the AZN combo trial's discontinuation to phase 3 only to those who had contacted IR (unless I'm wrong about this). This allowed the manipulators to take advantage of retail holders' (perhaps misplaced) expectations about a partnership and subsequent disappointment. But we know that AZN could still potentially be the AXAL monotherapy distribution partner in Europe.
But this one error in no way should have caused a 30% drop. It was just an excuse that the short hedge funds and MMs used to bring the stock down. But the company, in this one instance, may have partly contributed to the fake excuse.
But most importantly, regardless of all the noise, considering how frenetic the trading activity has been over the one month I see some very good news on the horizon. We'll see.
You are welcome, Gantor. I am not Justice and Equality. I have been asked this before by others due to the similarity of our monikers (more similar in spirit than letter I think). In any case, I used to post on YMB a couple years ago but stopped after it was redesigned for worse. I credit Justice for shining a light on the science of ADXS to many retails holders, including me. I am not half as knowledgeable as s/he is.
ADXS for me is a 'hold until it plays out fully' stock. I started trading in other sectors since this was being held down by vested entities. I have great hopes for this company and thank many of the long term longs for keeping the board up to date.
I will try to post more often.
I have not posted here in a long time but I have been following the board everyday.
While it is impossible for any of us retail shareholders to guess the precise reason underlying this current downturn (assuming there is even one, in which case it was obtained illegally ), it is certainly all happening based on pre-determined algo trading.
All you need to do is look at level 2. The absurdity of the trading is self evident. The MMs are simply collecting shares from forced margin sales, sales from stop losses, unsuspecting traders and potentially exasperated longs and transferring them over to some unknown entities.
You will largely see 100 share blocks on level 2, interspersed with a few real trades, and occasional massive blocks (25,000, 50,000, 110,000 or some such for weird prices like 6.0255). I guess we will learn something soon. Considering how close we are getting to cash value after this manipulated downturn and how little the platform is valued at, I am guessing the news will be positive.
Hard to argue about the delay, but to be sure the delay is in dosing rather than enrollment. Enrollment entails screening, recruiting and prepping patients and that already appears to be happening at multiple sites.
But I am inclined to go with fbg's theory about starting the clock with a partner on commercialization plans at the time of dosing the first patient; in most instances it triggers a milestone payment. But I cannot be that sure though, because there is another clock - the patient clock. Enrolled patients cannot wait inordinately to be dosed, especially those with advanced cancer. The delay can hold only as long as it does not interfere with patient well being. So either there will be a partnership very soon or the theory itself does not hold.
My understanding, based on clinicaltrials.gov updates, is that ADXS is screening patients at multiple sites for enrollment into P3 AXAL trials but has yet to dose the first patient. My hunch is that they are more likely than not to initiate dosing after they sign up with a US and European partner. Let us see how it unfolds.
Hmm, that is interesting. I have been posting under this ID even on the yahoo board for about an year and a half. While I was not a very regular poster even on yahoo, I did post often enough to be familiar to a few people here. Anyway, I am glad that we have another board to share our thoughts. While yahoo has a great format, this one eliminates trolls.
Understood, Fbg. Just to add to my point though, ADXS should not compromise on AXAL at this point, since we hope to be the new standard of care for HPV related cancers, and that is not at all far fetched based on the data we have seen till date. While the shorts are able to deny ADXS its appropriate market cap, which I would reasonably put at around 2 billion at this point, there would be no denying its value once AXAL starts gaining early approvals in Europe and Asia. Dan knows it and all the potential negotiating partners know it. It would be in the larger company's interest to seal a solid deal before ADXS manages to materialize these goals, at which point Dan's leverage will only increase for an even sweeter deal.
Fbg, while the number sounds good at face value, $1 billion in overall milestone payments for US and Europe rights seems somewhat lowball for AXAL, unless you are taking only about Cervical (not H & N and Anal), and the revenue sharing even for just cervical is at least 50-50.
I mean ADXS has already done all the hard work and has reached Phase 3 in the US with SPA and Fast Track and is poised to succeed on its own, all at current shareholder expense. AXAL is our most advanced product and is ahead of something like NEO by at least 3-4 years in clinical development. And NEO itself has a 500 million deal. So for someone like AZN, or anyone else, to simply swoop in and take all of AXAL for US and Europe rights for just 1 billion would mean we have made a mediocre deal at best.
But I would love to see a deal though and like the talk of billions, instead of millions :-
Hello, nice to see ADXS longs from YMB migrate over here. I hope the remaining longs switch over as well.