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Here is the reply from Seymour:
It's really quite logical. The warrant holders, like many others, have been loyal stockholders since the very beginning. The difference between them and people who bought on the open market is that they tied up large amounts of money (up to $500K) for a year and did so when there was a very small difference between the stock price and the offering price. And they did this years ago when we weren't nearly as far along as we are now. Many of these original investors doubled down when we needed more money and they're still holding onto all of their stock. People who bought on the open market had the ability to quickly get out if they felt the need to do so. These warrant holders were tied up for a year (since changed to 6 months)
We may need a small amount of money in the future in order to bring more drugs into the FDA. I can go to these people. They're not the typical sleazy Wall Street financial people who short your stock when you're in discussions with them about raising additional capital. I get at least one offer a day from people who want to give us money. I've turned down everyone.
Some of the holders may never exercise their warrants. If they do, they have to hold the restricted stock for 6 months. Also, the number of warrants is small compared to the total number of shares currently out there.
So, as far as I'm concerned, all of the benefit accrues to the Company, we've remained loyal to those investors who remained loyal to us, there's minimal dilution if and when they exercise and we have a loyal financing source in people who don't play the Wall Street games. What could be better than that?
Make sense?
Sincerely,
PS You have my permission to post this reply
EUGENE SEYMOUR, MD, MPH
Chief Executive Officer
NANOVIRICIDES, INC
Nanotechnology-based targeted anti-viral therapeutics
http://www.nanoviricides.com
eugene@nanoviricides.com
310-486-5677
I do not understand warrant extension done today. The filing was posted after hours. It does not seem logical. Why would the company extend time period of warrants. The entire benefit goes to warrant holders, the company loses and the existing shareholders are diluted. It does not seem they got anything in return. Then why extend terms? Do they want to raise money at these and even lower prices? It only makes sense if the terms of the warrant required term extension. I will write to Saymour and ask him. I will post the reply here.
Seeker
Filled. That is how they could get to $1.05. I have some more open orders at lower prices.
I will give you my perspective:
In the Seaside deal, NNVC essentially gives Seaside a 15% price advantage relative to the recent trading prices of the stock. That actually is a great deal. In most cases struggling companies not only have to give lower prices to be able to sell a large quantity of share they also have to issue warrants enabling the buyer to buy almost the same quantity of stock within a few years. 15% discount is ok.
Another company may have sold shares at say 1.00 and issued warrants for eaqual number of shares to be bought at say 1.25 within say 4 years. For us the later deal would be worse since let us say in 4 years NNVC shares are at $5, but the warrant holder will be able to buy shares at $1.25. That is extra dilution.
The problem is the ability of small companies to raise large amount of cash so they can continue their operations. I think in this case the thrifty attitude of NNVC management got them a great deal.
However, I always hate the commission given to another company which acts as the intermediary. I think companies use them for legal purposes. However, it is just a waste of money.
Wow, I only had to boast. Now I have 34,800 filled. I can put another order at lower levels if they keep on selling.
There is real carnage in the market. My limit order has held so far. Total fill until now is only 1,400 shares.
I put another limit order to buy 40K at 1.06. Check if they can break 1.06 level. Let us see how much guts the sellers have.
Seeker
It is just a balance. Diwan keeps selling, we keep buying. Some others are just trading. $1 seems like a good technical support level.
This morning I bought 40K shares.
Thanks DFG, that point is critically important. At this time we cannot run a study whose result is not clear for years.
Seeker
Detonate,
Forget about Dengue and Ebola for now. When I talked with Seymour he was clear that the company will not pursue drugs with a small market for now. If you look at the market sizes for cides the large ones are HIV at 21 Billion, Flu at 7 B, Hepatitis C at 6 B and Herpes at 5 B. Out of these the company picked flu since I think the Flucide is extermely effective and because its testing will need a small time period. Since Ebola, Dengue and Antiviral eyedrops have market size of only about 1 B, the company will not focus on them for now.
In my opinion this is an excellent strategy. We are short of money and the demise of small biotechs is always related to running out of money. So we need a revenue stream. That can be best accomplished by going after a drug that can be quickly approved. Once we have the money we should then focus on other drugs. But survival is most important so we need to look for quick FDA approval. Rest will take care of itself. Ebola and Dengue development may be a very humanitarian gesture. However, poor cannot be donors. Once we have some money, we can then show our empathy.
Seeker
Oh, I have just thrown out a couple of price targets. You seem to be a very observant person to remember those targets. In general it is not a good idea to discuss far out targets at such an early time. Still since you have asked I will try to speculate.
The case of VRUS stock has been pointed out on this board recently. Let us take that as an example. VRUS has one drug for Hepatitis C. The market has given them a market cap of $6 billion. From NNVC June presentation we see that the total addressable market for NNVC cides is 43 billion out of which Hepatitis C is 6 B. So from this simple analysis if all drugs of NNVC are successful, NNVC should have a market cap of 43 Billion. Let us say by the time all drugs are in the market, we have 200 million shares outstanding. That will give us a stock price of $215.
None of us will hold NNVC stock by that time since most of would take a much lower stock price and be very happy.
I have held Neoprobe stock while it has gone from 20 cents to $3 now. Potential revenue from a drug is a good indicator to come up with likely price targets. What I have learned is that one should buy a decent amount of stock based on risk/reward ratio. It takes time to earn the rewards, but it is very worthwhile. I have also learned that such huge stock price rise is very volatile and those who invest in such stocks should not worry too much during the wild swings. One can trade the swings, but I do not find that a worthwhile exercise for myself. Those who are interested should check how Neoprobe stock has appreciated during last 5 years. However, a chart cannot teach you as much as owning a huge quantity of the stock while it went through the wild swings.
You said "Dr. Diwan will be very wealthy"
He already is very wealthy. Say he has 30 million shares, then he already has 30 million dollars. That is a lot of money. If the stock goes to $100 dollars, he will have 3 billion dollars. Frankly, to me both $30 million and $3 billion are a lot of money. I do not think Dr. Diwan will be able to enhance his lifestyle much by going from $30M to $3000M. He will just have to find what to do with the extra money.
Listening to audio of the presentation. When I clicked on the link it put up the slides effortlessly. But at the same time audio was sent and that needed confirmation to start. So when you click on the link, be on the lookout to see if your browser is asking for permission to start audio. When you tell it to go ahead and accept audio, you will have the audio delieverd.
Seeker
It is just a matter of time that some such emergency will happen and NNVC capability will be needed. We have to be properly invested in the stock so that we take advantage of the huge stock price surge when NNVC expertise becomes known to a wider audience.
We all know that we have invested in this company at an early stage. The viricides have not been used on any human being so far so it definitely is an early stage to invest in the company. However, the technology owned by this company has enormous potential so we all decided to invest at this early stage. Essentially we are waiting for the time to be ripe for the technology to be used.
I think it is critical that we quickly have the IND in place and at least complete phase I. Then if an emergency happens the only thing standing between us and implementation will be a quick trial for efficacy. Since there is no alternative to viricides FDA should allow us quick deployment. At least I hope so.
It is difficult to say why shorts go after any stock. In most cases you only find out after shorting has happened. An OTCBB stock like NNVC is very difficult to short. Most likely we regular investors will not be able to short it even if we wanted to. It takes a big pocket to short such stocks and even they have to make special efforts to short. The short interest in NNVC is minimal, I would not worry about it. I am not a trader, so I do not care about shorts. When I say shorts I usually do not differentiate between real shorts and trader longs who are selling.
In my opinion the huge volume in NNVC is difficult to understand. Who is trading all these shares? In my opinion there always will be traders in stocks, they just buy and sell all the time and create volume. Let them trade, If they were not trading, we would have a big problem developing a good sized position.
The volume is pretty high today again. One can look at it both ways at this point:
(1) There was news yesterday and it says that NNVC is getting ready for pIND submission. So may be investors are accumulating the stock.
(2) A relatively good news did not move the stock at all. That is bad news, so may be shorts are active.
We should know which way it goes pretty soon. I am more and more positive and so bought some more stock. My hope is that the stock is where it is due to lack of knowledge among investors. If that is true FDA filings should move the stock.
Seeker
I agree. The chances of toxicity in humans is very low.
TheDane,
Oh, well. The question you pose now is very reasonable. Say the stock is at $1 now and we have unknowns like toxicity and efficacy in humans etc. Now let us take a hypothetical situation that in 5 years these unknowns are resolved by going through phase 1, 2 and 3 trials and the stock is at say $3. Which is a better investment, now at $1 or at $3 after 5 years? I would anyday invest 5 years from now at $3 than at $1 now. The reason is that by investing now at $1 we are taking a risk that we could lose our entire money if any of the trials fail. The investment at $3 will be risk free because by then all the risks of the trial are taken out and all dilution possibilities are gone since the company would be on the verge of making money. I see the stock easily going to $20 if everything works out so the $3 investment would be a risk free investment with potential to give huge returns in 2-3 years.
That was a hypothetical scenario without detailing all the posssibilities. When we look at the current situation, I have several factors to consider. First, there are unknowns like efficacy and toxicity, second is the possibility of dilution, third is the huge potential for this stock if everything works out and the final one is my relatively limited knowledge about the company. Given those factors I have now invested a substantial amount of money, yet well below the total money I finally plan to invest. I will continue to research the stock and as I become more comfortable I will keep on investing. As time goes by, more unknowns are resolved, management keeps meeting expectation my final investment may be as much as 20 times present one.
That is just the way I operate. That is not how I always invested. In the beginning I had very little money to invest and just invested all the money in the beginning. Now having much more money to invest I choose the careful gradual process.
Seeker
TheDane,
Nobody has any assurance that we will have no toxicity in humans, that it will have efficacy in humans etc. We will all know only after the trials are completed. Do you have assurance that there will be no problems in trials? We are all taking a calculated risks. For me this level of calculated risk is appropriate given what I know.
The question still remains do you have a problem with people voicing their opinion? If we have a short in our midst, should we yell at him? I do not think so. Let him bash. Maybe we will learn something from his opinion. This is a message board, not a place for patting each other's back.
Seeker
Sure, I doubled my position. I am comfortable at this level of investment. It is well below the maximum I plan to finally invest. I do have great hopes for NNVC.
Dane, What bashing? Do you have a problem if others have a different opinion?
Thanks, DrFeelGood
The reason it is so slow is twofold:
(1) NNVC company has been moving at a very slow pace
(2) Due to (1) investors have little interest in the stock. There are no investors who want to seriously go long or seriously go short. If there was much more interest we would see the stock moving much more rapidly.
I personally have taken a stock position in anticipation that application to FDA to conduct phase 1 tests will get the stock to move upward since more investors will become interested. I still have little assurance that NNVC has no toxicity in humans. So I will be taking a serious position only after it NNVC clears phase 1. I doubt the stock would have moved a lot by then.
Seeker
DrFeelGood, you raise a good point. You said
"One can be infected with H1N1 and 5 years later a new H1N1 poses a threat. What then? Use the H1N1 DRACO and it will kill all the healthy cells that survived the previous infection. Is this really a slam dunk similar to targeting only viruses?"
I have two questions:
(1) It seems to me that Draco is broad spectrum, that is it will attack all cells that are virus infected. So that means there is no H1N1 Draco, there is only one Draco. Regarding your post, Draco will kill all virus infected cells, not virus immune cells. The cells that have become immune to previous H1N1 are immune cells not cells with previous H1N1 virus. So why would Draco kill those?
(2) The question of toxicity still haunts me. Our viricides have been claimed to have no toxicity. However, I have only seen only one publication which is about the Ebola virus. That poster said that there was a small amount of toxicity to viricides. So how comfortable are you with the claim that viricides have no toxicity?
I have not posted in a few weeks. After my last series of posts I had a phone call with Dr. Seymour and now I feel much more comfortable with investing in NNVC. I have subsequently doubled my position. More or less it is NNVCs lack of money that has created the slow pace. They are now prepared to go much more rapidly. That still remains to be seen. It seems that Seymour would have already filed the IND, the only reason it is being delayed is that they have been told to be super careful since they only get one chance with this filing. Seems like a prudent thing to do, but there is a limit to being prudent. One has to go forward, you cannot be so careful that the pace become glacial. At every stage we will get only one chance to file (IND, phase 1, phase 2, phase 3, NDA etc.)
Seeker
Thanks to all the kind posters.
Dane,
You asked - Who are the "naysayers?"
I would rather not answer the question because of my simple principle - It is not relevant to NNVC and we are here to discuss NNVC not what sort of person we are. It is totally irrelevant to NNVC whether or not I am an egoist who considers himself an expert on NNVC. Why bring up such topics?
To answer another question raised here - I always post as Seeker_of_value on all boards. I have never used another id. If you are interested in some of my other investments, you may want to look at
http://www.investorvillage.com/groups.asp?mb=16085&pt=m
Neoprobe has been my best investment where I invested mostly between 20 and 30 cents about 4 years back and now it is at about $2.50. I still own more than 75% of my shares.
Seeker
Oh, I am sure the patents are very worthwhile and absolutely necessary. All I am saying is some papers would add value to the company.
I would never say that I am anywhere close to an expert on NNVC. DrFeelgood for one probably knows 100 times more about this stock than I do. All I am saying is that I have an opinion about how the company should proceed. I will discuss that with Dr. Seymour. I do not expect them to accept my opinion. If they have been discussing these issues among themselves then my opinion may count as one investor's opinion.
I will certainly say hi to him from the board. He probably reads it anyhow.
I had hoped that this board would be much better than yahoo board. No question the posters here are much more knowledgeable, but it is tough to lose the naysayers.
Sorry if I offended you. Many others on this board are far more knowledgeable than me. I know that for sure.
Yes, the patents do lend credibility. However, peer reviewed publications are better. I have a few patents and know how carelessly patent office approves them. That would not be the case with NNVC patents because this is very unique technology and nobody else could come close to filing a similar patent. Still having a patent does not mean that the technology is a viable one. Patent office approval in no way even implies that the technology will work.
Peer reviewed publications in a reputed journal is a different matter. Such a publication means that people who are knowledgeable have read the publication and agree with the methods and conclusions with the expectation that the authors are truthful. That still does not mean that the technology will work. However, it does mean that the peers have reviewed the methods used and agree with them. Look at the results published by NNVC. Nowhere I have seen how many animals were tested and how many confirmed the results shown. A paper giving such a result would never get published. That is why publication in a peer reviewed reputable journal gives the results credibility.
We need credibility for this stock to get it moving.
Another factor that I am not happy with is their reluctance to raise and spend money. Unless you spend money you cannot get results. We need quick results.
I am unhappy because the company has until now spent about $12 million in research. Their market cap is around $150 million. That means that when the company spends $1 their market value goes up by $10. Where can you ever get such a return? So I would say every year raise $10 million from stock sales and raise your market cap by $100.
This analysis is indicative of course. What they should really do is:
Announce results, stock price goes up, raise money, spend money wisely,
Repeat
If they do this continuously we will see price go up much faster.
There are a few other matters that I need to discuss. Seymore seems open to talking on phone. I will definitely call him next week.
What about this business of we do not test any of our formulations. How many other labs have actually tested NNVC formulations. I know about the DengueCide. What about other labs? They mention a number of labs, but I do not know what these other labs have done.
One reason NNVC lacks credibility in investment community is the fact that they do not publish. Their answer was that we gain nothing by publishing. In my opinion that is a wrong answer. By publishing you gain credibility among peers and so also among investment community. It is a job of NNVC management to make their stock more widely known. Publishing test results in a reputed journal would do that.
I agree that lot of this problem has to do with being too frugal. They have done it to an extreme. I will talk to them about it. If they commit to moving to AMEX or NASDAQ (which will force them to full reporting status also) and also commit to publishing results once they have the money, the stock will become much more interesting to me.
This should happen soon. Once they file with FDA, the stock price should go up. They should conduct a secondary offering to raise some money. Then they should proceed at full speed. The market potential is so large, they must proceed much faster. If they do that this stock should see $10 in one year. I need to talk to them.
I certainly am not that poster. What good does it do to whine? If I do not like what I see I will just sell and go.
I think that there are some people on this board who are very knowledgeable. That is why I am here.
Thanks NanoEngineer and DrF
So they had not completed optimization in 2009, which is now complete. I do not understand the timelines needed for such work. So who am I to comment? Am I correct in understanding that preIND can now be filed?
Typically my strategy has been to buy significant quantities of a stock has been just before a significant event takes place. I hope the preIND filing and approval will be such events. Moving to AMEX or NASDAQ could be another. Given the evidence I would assume that there should be no toxicity. So going through phase 1 will be a major event.
Those looking for me to sell my stock will be disappointed. Why this paranoia?
Glacial question
As you know I am very new to NNVC and have just started to buy the stock.
Yesterday I listened to a presentation that was made by Seymour in Dec. 2009. I was totally surprised. 20 months back he was saying exactly the same things he is saying now. He was talking about functional cure of HIV, Flucide and other vaccines. Nothing they are saying now seems to be any different than what he was saying then. He was even then talking about moving to a larger exchange. They still have not done that. It seems to me they have done close to nothing in 20 months. The only change seems to be (1) They are moving closer to cGMP facility and (2) They have hired some consultants to approach FDA.
Am I right in saying that this company is not only glacial, they seem to achieve close to nothing except spend money? Given the extremely large potential market for their vaccines this seems very strange. If they keep on moving at this speed somebody will surely come up with an alternative that will work as well.
Another statement they make seems close to false to me. They claim that they do no testing of vaccines themselves, all work is done by others. In all the recent releases I have noted that the work was done by KARD, which is the private lab of Krishna Menon, who an officer of NNVC. So this claim seems very close to false. They may get some wok by others, but that work seems to be a small fraction of all the work they get done.
As you know I have started to accumulate position in NNVC. However, now I am getting a bit uncertain. They must not be liars and I cannot believe they made no progress in 20 months. I would appreciate any inputs on this subject.
It is quite possible that the bottom for the market is not in. The market may take all of August and September to put in a bottom.
Meanwhile I am building my position in NNVC. The first few steps in that position building have already taken place. I will keep on adding at various technical levels. In my opinion the two significant technical levels for NNVC are 1.00 and 0.50. If $1 level is broken I will set up a large order above the 0.50 level. If $1 level is not broken I will just have to keep buying around the current level.
I personally think that the market will keep on dropping. While small stocks have already dropped quite a bit, the blue chips are still expensive. Whether NNVC will drop below $1 level is unknown. It will depend on how many investors have realized how good a value NNVC is. If I had couple million dollars to invest, I would try to make a similar deal as they have with Seaside.
Seeker
I had put in a 50K order for buying NNVC for 1.01 in the morning. That order did not fill so far. So I put in a 20K order to buy NNVC at 1.03 when the bid/ask was 1.03/1.04. I am unable to see level 2 quotes at work. Well the 20K order got filled in one minute. It seems to me that there is substantial selling pressure (that is why the quick fill) as well as substantial buying pressure (that is why no fill at 1.01 in the midst of this horrible day) in this stock.
Seeker
Reply from company on publications
I sent an e-mail to NNVC and got a reply. DrFeelGood is correct. There are very few publications. I was surprised by the new draft web site mentioned. So far I was looking at their old website that is much worse. Here is the company reply:
We have no interest in publishing since it does nothing to advance our program
Our collaborators can publish if they wish
The Army is in the process of publishing their work on our Ebola drug and I suspect the dengue work will be published by our University collaborator
Take a look at my draft website that has links to previous press releases
http://www.seymour.com
There are also published patent applications by Dr. Anil Diwan available on the web
Sincerely,
EUGENE SEYMOUR, MD, MPH
Chief Executive Officer
NANOVIRICIDES, INC
Nanotechnology-based targeted anti-viral therapeutics
http://www.nanoviricides.com
eugene@nanoviricides.com
Diwan's impending sale was in the news. You should not be surprised.
http://finance.yahoo.com/news/NanoViricides-to-Lease-New-bw-311400962.html?x=0&.v=1
To this end, NanoViricides, Inc. has agreed that Dr. Diwan will sell up to 2 million shares of his stock over the next year. In exchange, Inno-Haven LLC, and Dr. Diwan, have agreed to purchase certain facilities and lease a portion as needed to NanoViricides, Inc.
DrfeelGood,
Thanks for your answer. I think the way to go is to look for scientific articles. They would have the data that I am looking for. I am currently out of my office. Once I am back I will search for articles by Dr. Diwan. I will share any findings with this group.
Seeker
Thanks. If you can find those PRs it will be wonderful.
I tried to look for them. The company website has no links to old PRs. Yahoo does not store PRs that far back. I looked at one of the 10Qs from 2006. It does not have any technical information. It seems the new 10Qs repeat a lot of information from the old 10Qs.
I fully understand the need to maintain a shoestring operation at this stage of development. They have done well. Apparently they have spent $12 million so far, yet the company capitalization is almost $200 million. So the company founders have done a great job so far. Investors have rewarded them more than 10 fold on their investment.
Is the company management ready to talk to investors?
New Investor - need help
I am new to NNVC and would appreciate some help from long time owners. The results of tests done using NNVC drug candidates look very impressive, such as orders of magnitude higher virus elimination compared to competing therapies. What I cannot find is any details of the tests done. I even looked at the 10Q and still cannot find how the tests were done. For example, how many mice were used in the tests? Were these tests just preliminary in the sense that just one mouse was treated with each of the drug candidates to determine what works and what does not work? Or were these controlled tests? They mention p values so I assume that statistical analysis of test results must have been done. However, I am unable to locate any details of the tests.
I would appreciate any help in this matter. Where should I look?