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Completely agree that substantial funding coming in would be a great thing and accelerate the whole program. I’m saying that I suspect that GvHD is the catalyst that gets that real money in the door, and I suspect that management may be aggressively pursuing it at this point for that reason.
I think that there is a very real chance that GvHD is the most immediate catalyst to get the share price jump started, and it would not shock me if we found out after the fact that management had shifted focus and funds to accelerating the GvHD enrollment, even prioritized over enrolling mono. I'm assuming that they have enough mono patients enrolled at this point to support the safety data requirements for the combo BLA, based on their most recent expected timelines for submission. At the very least, they should be nearing the needed number.
Consider:
- GvHD is a very serious, very unmet medical need. Just the type of thing that the FDA has shown an affinity for approving quickly.
- The effectiveness shown in the animal data was shocking.
- The FDA just agreed to a major protocol change after 10 patients, and is planning another IDMC after 10 more patients are treated for 30 days (reduced from 60...).
I've thought about this quite a bit, and my only logical read of the actions taken on the GvHD trial are that the results are bearing out significant efficacy, and the FDA is amenable to speeding things along. If - and only if - the data on the next 10 open label patients is compelling, I expect that the FDA will move to get this indication on the market nearly immediately via conditional approval. I see no other rationale for the wholesale change in protocol and the stated intent to review the data after 10 more patients on a reduced timeline. I'd love to hear what others, particularly those with experience in clinical trials and drug approvals, think about this possibility.
Assuming that my hypothesis is anywhere near valid, I expect management to throw as many resources as possible at getting those next 10 enrolled and treated. It would be a far more impactful use of funds in the near term than focusing on mono enrollment. Call me crazy and/or optimistic (I've been called worse), but it wouldn't shock me if we're halfway there or better at this point. The PR was three weeks ago, they have five sites open, the data appears promising given the protocol change, and management has the incentive to funnel resources there in the short term.
I've been saying it for a long time privately, but I think GvHD ends up being the surprise game changer here. The real money is in mono... but GvHD is the first domino to fall.
Thanks for this update, this is great information and very helpful. Although I do wish the funding wasn’t so dilutive, I’m happy about this move now - particularly that Aquitas staff is taking over executive responsibilities. Nothing against Mr. Adams in the least - he seems to have done an admirable job to date and I’ve enjoyed speaking with him in the past - but the job of the investment fund is to make money. I anticipate they’ll push for BTD after the 2a and then, assuming positive results, look to sell or partner while the biotech market is strong. That wouldn’t hurt my feelings.
Appreciate the response, and glad to know that I got the broad strokes correct anyways. Having $2.7mm and erasing some liabilities seems like a much better position than having $1,000 in cash like they did a while back. And yes, dilution is inevitable... but $3mm seems like a song for 80% of the company. Hopefully it allows the company to finish the P2 quickly and move on to applying for BTD and maybe AA. It would be great if you're correct and this dilutive round is enough to get the drug to market. I've seen examples where bit by bit funding in an attempt to minimize dilution has backfired somewhat, so maybe taking your medicine up front is the way to go IF you can get enough cash at once.
Pleased to see the SP holding around .05 today, even if on low volume so far.
Appreciate you posting this. For the non-legally minded among us, any chance you could summarize this transaction and what you think it means? It looks to me like an investment fund just put in about $2.7mm cash and canceled $300k of debt in exchange for 80% of the company, and for that to work the company also more than double the authorized share count. Am I reading that correctly? Thanks in advance.
I'm actually strongly in your camp here, but I also completely understand the cognitive difficulty folks are having in getting the share price from where it currently is to where it needs to be to make a $10b BO realistic. We've had several catalysts that should have put the share price in a better place, yet every time the selling just overwhelms any demand. Rough math on the 50c shares from previous raises suggests that the pattern could continue and absorb quite a bit of demand. I think a very bored lawyer did some back of the napkin numbers recently to that effect.
I've been here, and am still here, because I believe that this is worth far more than the market currently reflects. I've already got my vacation home picked out for when it goes! But even I'm running out of feel good speeches for people when we have the best financing we've seen in over a year come through, on the back of several strong PR's, and we spend part of the day in the red only to just barely see green.
That was in line with my general thinking. And 800% puts us at $4, or more like $3.25 fully diluted. (Edit: I realize that I did my math wrong here... but the results don't change that much.)
In other words, to ever recognize the value that cash flow analysis suggests exists (which I also believe exists), the share price needs to move significantly first. At least based on easily available reference points.
This is why folks' expectations are tempered, even while they see and believe the valuation analyses. Hopefully the company can find whatever news they need to eventually break this price action.
An interesting scenario, and one that I've kicked around before with a few others. I think it's perhaps possible, and is maybe the only way it gets near a reasonable market value without the natural share price appreciation. Again, I'd simply ask for any case studies of similar examples? I haven't done the homework there, so it's genuine curiosity.
For the record, I also think that we're all going to make money here. I tend to think that sooner or later the market will resolve itself and the share price will normalize, but it's getting harder to see that happening with each successive instance of very positive news that's simply met with overwhelming selling.
Hey d0lphint0m (but not just you!),
I think the folks with the “unrealistically low” expectations are more just experiencing a disconnect between the current SP/action and the modeled values. How do you get from A to B? Our capital structure is currently hamstringing the benefit of any positive news - which we’ve had a lot of lately! And while everyone is aware that the company “should” be valued based on expectations of future cash flows, when was the last time a company got bought out for an overnight premium of ~3,000%? That would roughly be the case if CYDY were bought tomorrow for $15, fully diluted. Is there precedent for this sort of buyout? Plus, how do multiple bidders work in a scenario where any negotiations are roped off by NDA’s?
I’d be interested to hear about any cases where severely undervalued companies are bought out very quickly for a fair price. Not saying it doesn’t happen, I just don’t know if any and haven’t done the research. The more common case seems to be that SP appreciates significantly and naturally, then BO occurs at more like a 100% premium.
So again, how do we get from a $0.50 SP to a multi-billion dollar buyout when nothing that comes out moves the needle? That’s the disconnect, and why a lot of people who understand the math perfectly well are tempering expectations for a BO at high valuation. Any case studies to connect these dots would likely be appreciated by many.
Again, not responding specifically to you, more just the general conversation. You just had a perfect post to reply to!
And don’t worry folks, I’m still long here and plenty optimistic for the long term.
No problem at all. While I’m thankful for the interim data we have, the format doesn’t make bulletproof analysis simple. Which is why so many of us have sat around for the last week saying “this looks really good... I think... right?”
As a practical matter and despite my previous proof to the contrary, your greater point likely stands. Given what we know about enrollment and event curves, as well as other issues such as subgroups who may see marginal benefit, I think it’s fair to assume that the population median is likely (but not assured) to be on the higher end of the OS observations that have already been recorded. However, if in fact the “last in, first out” accounting (if you’ll pardon my flippancy with human lives...) that would bring the median down WERE to be occurring, then that would suggest that the remaining patients would be contributing to an insanely long and consistent tail, thus increasing the expected mean OS. Not a terrible thing either.
If I were a betting man, I’d wager a good bit that the truth lies somewhere in between and we’ll eventually see a median towards the higher end of events already recorded and we’ll also see patients in the tail extending the mean. In fact, I suppose I’ve done exactly that. Maybe I’m a betting man after all.
You’re operating on the assumption that all patients started at the same time, therefore any events past the (N/2) observations must have a larger observed value than previous observations. If this was true, you would be correct... but this isn’t necessarily true for this case.
Since we’re aware that we don’t know when each patient definitively began treatment and evented, all that one can infer with any mathematical certainty is that the set of observations that we currently have - ie the individual mOS for each patient who has died - CONTAINS the eventual median of the full population. Unless we have some certainty about the start and the end point of each patient, all we know is that the median can’t be longer or shorter than an event we’ve already recorded. We can make some inferences based on the limited data that we have... but it is false to say that the median can ONLY go down/up from here.
Hopefully NWBO is rendering this point moot as I type.
Impressed you remembered - thanks! Feeling pretty healthy going in, which is about all I can ask for. And hey, it’ll seem short compared to waiting on this ticker to make moves!
Appreciate the well wishes.
It has been suggested on this board, but not confirmed, that there is a meeting scheduled in June.
Others may choose to add details.
Good catch, I admittedly never saw that in your previous post. I dare say that most here did not know of the existence of that paper, but I could be wrong on that. It hasn't been broadly discussed, that's for sure. I've tended to skim most of your posts because overall I agree with you, and the valuation exercises - while thoroughly supported and I tend to generally agree with them - don't hold much interest for me. I know what I think it's worth, and I think I'm in good shape anywhere within a wide variance of what I believe it's worth! All of that said, I do still appreciate your contributions to the board.
On another note, I wouldn't be quick to believe that those phone calls are anything other than a concerted attempt to gather the votes necessary to pass the increase in A/S. I've seen the same phone calls, with similar knowledge of exact share counts, etc, with other tickers with shareholder votes approaching. The calls are most likely genuine. I'd love to be wrong, but I don't see evidence of anything else at this point.
I think that you're right. I think that we're about to see all of the news that we expected would (or at a minimum should!) come along with the reverse split for support. I'm hopeful as well.
I'm also shocked that nobody found this article prior to now!
Probably very little. Right to Try is specifically for terminal patients, and it already exists in the statutes of about 40 states. This federal statute basically just covers the other ~10 states.
In many cases, terminal patients already have this option, they just have to petition the drug companies. The FDA does have to agree, but minus some red tape, doesn’t tend to impede the process much.
Maybe the sheer visibility for clinical stage treatments could be a positive. I’m not counting on it.
For a number of reasons, I’m not holding my breath for that news. In fact, I’m not holding it for ONCX at all. I took my losses this morning and I’ll move on. I’ll keep an eye out though - there’s a real story with the science here. It might be attractive again at some point.
But that point ain’t today.
I understand what you’re saying... but these disclosures and their gloomy language are required legal speak. Very common.
What’s not common is the clause about commercialization and sales reducing the required burden of raising debt and/or equity. That’s a major - and positive - departure from the language of most going concern disclosures. Most of them simply say something along the lines of “additional capital raises are required in order to continue operations, and there is no guarantee that the company will be able to raise funds, or raise funds at an acceptable cost...”.
Also, the liability structure is not alarming. You’d always like to have more assets than liabilities, sure. And the ability to easily pay down liabilities from free cash flow is fantastic... but ENDV isn’t AAPL. The debt overhang is just par for the course here. I can point you to many companies who have similar game changing potential, but who are absolutely crippled by their liability structure. Hint: I’m not making money in any of those right now.
This isn’t to say that there’s no risk here or anything like that, just saying that I wouldn’t get too worked up about the going concern disclosure. As always though, your mileage may vary.
It's poorly worded, but the answer is simple. For the purpose of clinical trials, pain is rated on a subjective scale - usually 1-10 or something like that. You're then comparing the change in pain rating for a treatment group (average) against the change in pain rating for a placebo/SOC control group (average). If the placebo/SOC group averages a 1-point decrease on the pain scale, and the treatment group averages a 3-point decrease, you have a 300% reduction in pain compared to the control group. Obviously, the average numbers would be measured in decimal places, making much smaller changes for the control group possible and making a 1000% reduction obtainable. Again, it was not worded particularly clearly in the PR, but that doesn't mean that it's wrong or illegitimate. The flipside is that to know how effective the treatment REALLY is, you need to know what sort of change it's being compared against. If the control group reports an average change of (0.01) on a scale of 1-10, then a 1000% reduction is only (0.1) and isn't going to impress anyone.
Regardless, happy to hear of the distribution deal. Great to see real progress on the commercialization side of the business. Hopefully this is the beginning of many good things to come.
Real revenue would be parabolically good for the SP. Unfortunately, I have no expectations that current revenues from SofPulse sales are significant. I think you’d see it reflected in the SP already, since we expect a 10Q any time now and the market always seems to know ahead of time...
I’d certainly love to be proven wrong though. I’m plenty long here. A little longer even after yesterday’s theater.
That’s good stuff... now to see if it moves the needle. Unfortunately, I’m not holding my breath.
Or are you referring to the pre-14a that came out on Thursday?
Where do you see notice of a special shareholders meeting? Thanks, much appreciated.
Thanks for posting this, much appreciated.
If the first point is true and there's no redeeming context, then that's embarrassing at best. I love the science here, and I've given management a lot of passes on what I deem to be questionable decisions because I believe the science will win the day, but that one makes it tough.
They owe a conference call at this point. I hope that you were able to communicate that to them.
The short answer is that a rule of thumb is 3x peak annual revenue, then discounted for risk, cost to bring to market, etc. Some would say a range of 2x-5x is reasonable. A quick look at any recent biotech acquisitions shows this rule of thumb to be just that, and not a particularly accurate one. However, it probably puts you squarely in the middle of a big ballpark of potential figures.
As was already mentioned, even cutting these projections in half results in a starting point market valuation of a big, big number. Even for combo alone.
Fair enough, I suppose. I think you'll find that this board is more than willing to be helpful - and balanced, for the most part - in response to direct requests for information. I'd suggest simply asking what you'd like to know or learn. You'll get responses from both sides, and it'll be obvious as to which posters are uninformed or hopelessly biased one way or another.
To be fair, I don't believe that's the case on all boards on iHub.
Cool. Now, I’m happy to participate in a reasonable discussion about why CYDY may or may not be a candidate for a successful reverse split. Others here have already largely made the quick arguments for the positive side, but we can always flesh that out if there’s detail you’re missing. I’m also more than happy to hear solid points to the contrary.
Good luck with your due diligence.
I agree completely. And that’s ignoring the ability to release interim P3 mono data. Bottom line is that I don’t have much respect for posts that lack any critical thought... such as those that simply say “all R/S are bad, so this will be bad.”
You and I are on the same page.
Thanks for the color, ahab. Kind of proves my point - all R/S are not created equal! It’s worth understanding what makes some fail and others succeed before pronouncing any one example doomed to failure. I’m preaching to the choir with you, clearly.
It’s only useful if you stop to examine why there’s an exception. Then, it can be useful in determining where that’s exception may apply again. Using your piano example, pianos aren’t delivered because they’re large, unwieldy, expensive, and heavy. You might use that logic to get to the conclusion that other similarly large, unwieldy, expensive, and heavy items may not be delivered either. You might even be able to conclude that certain specific items may not be available for delivery. See how that can be useful?
But you didn’t stop to figure out why ARNA was the exception. You simply threw out an idiom that - regardless of how old it is or what its pedigree - means nothing in and of itself, and assumed prima facie (I can use Latin too...) that it supported your opinion.
So if you actually want to do due diligence - which I don’t believe that you do - why don’t you research why ARNA was an exception and then tell us how that doesn’t apply to CYDY? Although it would be far from a complete argument that a R/S would not be beneficial for CYDY, it would be a lot closer than simply saying that the exception proves the rule and moving on as if that closes the case.
“The exception that proves the rule” is an asinine saying lacking real meaning. What ARNA shows, and what you seem to refuse to acknowledge, is that not all R/S are created equally. Most are executed by failing companies, so they fail. Some are value creating propositions because the increased visibility and liquidity can benefit companies with something to bring to the table. Amateur17 has it right - if there’s no good news to go with the R/S, the price will absolutely lag. Your blind refusal to acknowledge that there may be factors impacting the future value of the company beyond an accounting maneuver shows that you’re either ill informed or not well meaning. I assume the latter, since you just showed up.
Even most small, pre-revenue biotech’s who R/S to uplist differ from CYDY. Most I’ve found are early to mid-stage clinical - nowhere near as far along as CYDY. I expect this to make a significant difference. You need news to go with the R/S, and hey have several meaningful possibilities to supply that news with late-stage clinical trials for a disruptive drug in a large market.
By the way, C’s stock price after the R/S was ~$45. It now trades around $75. Most analysts cite that as a success. There are other examples (AIG, Priceline..) but I doubt you care.
Interesting catch, chump. You (or anyone else?) follow PGNX at all independently? I think it would be interesting to know if they have anything else going on that could be driving price movement. Feels a bit like a goose chase, but hey, the market always seems to know things before the rest of us, so...
Thanks for the additional research Marty, and glad we could clear that up together.
Now let's hope it was all meaningless and CYDY doesn't need a R/S. Whether I happen to believe that it should end well or not doesn't much matter as it turns out, and I'd rather not have to find out what would happen!
As I previously quoted from the NASDAQ FAQ:
First, those are criteria for the top tier. Again, check page 9 for criteria that CYDY would meet.
Second, please reference one of my previous posts where I discuss the NASDAQ FAQ regarding reverse splitting to uplist.
So, for everyone's edification, I just sat down at a computer and checked the investopedia page in question and the NASDAQ listing requirements side-by-side. The listing requirements on the investopedia page match exactly the listing requirements for the top tier of the NASDAQ, the Global Select Market, so it's not incorrect - just incomplete because it fails to mention the other two tiers of the NASDAQ. I just checked, and the Global Market is still a functioning tier of NASDAQ, so it doesn't appear that the official listing requirements that I've previously posted here are out of date.
I maintain my right to be incorrect on this since I'm no expert, but it doesn't appear to me that there's any evidence to suggest that CYDY wouldn't qualify for the Global Market tier of the NASDAQ under the Market Value Standard. Thanks for the discussion Marty, I appreciate being challenged reasonably and forced to up my due diligence game!
Hope this has been helpful to all, and I'd be curious to hear any information that we may have missed along the way.
Hey Marty,
I see our disconnect. Investopedia is only talking about the listing requirements for the top tier of NASDAQ, Global Select. Check out the official Initial Listing Requirements from NASDAQ - CytoDyn would qualify for the second tier (Global) under the Market Value Standard. It's page 9.
https://listingcenter.nasdaq.com/assets/initialguide.pdf
Hey Marty,
I could be completely missing something here, but I'm not finding what you're looking at. Would you mind providing a link? I don't see anything requiring that a company meets two sets of standards in the initial listing document that I'm viewing and have previously linked. Thanks!