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ELTK remains an enigma
DRCT- a tempting short
PE of 45 going forward based on Yahoo Finance analyst opinions, for a questionably legit business ? I feel strongly that this one will fall like a house of cards at some point, but timing is difficult. Earnings coming out next thursday after the bell
GERN- I left out eps after tax, and assumption of more dilution
When I did my valuation analysis, I didn't include the tax effect. So if GERN made $1 in eps on $1B in revenues, they would only make .$.75-$.80 after tax. However in addition, if GERN goes it on their own, they will need another offering within 3-6 months. Assuming the fully diluted count goes up to 700M(at some point over the next 2 years), then there would be a dilutive effect of about 16%-17%. I'm figuring that by the time GERN does $1B/year, and they go it on their own, they would have at least 700M shares by then. So now we've got to take down eps by another 17% lets say, and that would bring eps to $.64 fully taxes and diluted. Now we should attach a decent PE, as GERN will likely be growing revenues like gang busters, so a PE of 15-20 is conservative IMO. Therefore going forward 2-3 years, assuming things go well, I would give a target of $9.60 to $12.80, or avg $11.20.
Now this number assumes only $1B, while GERN is projected $2B-$3B by 2030. Plus GERN is in phase 3 trials for the use of Imetelstat for Myelofibrosis, which not one company has a drug for when relapsed. So lots of potential, assuming FDA approval.
GERN- After huge news Thursday of ADCOM support, the stock
can be more easily valued. I mean, no doubt GERN will be burning through tons of cash, as without a partner, they will have to go it on their own, So what I feel is important at this point, is to see how much GERN would make if they do go it on their own. As I stated in the past, when it comes to any company with a product(in this case a drug) with huge potential, but that isn't making money yet, is to dig into what profit margins would be for their product. The biggest question of course is, how much in revenues is the potential.
In GERNs case, their drug Imetelstat has to be compared with other infusion drugs. When I was in the biotech Horizon Pharma, their infusion drug Tepezza had 82% margins. Lets assume that GERNs Imetelstat has 80% margins. My guess is. after looking at 10Q Income Statement, that GERN would make around $1 in eps, with the first $1B in revenues. Since their only competition, Bristol Myers drug Reblozyl is expected to do $2B/year by 2028, that GERN can in fact get to $1B/year revenues for their infusion drug, then what would the stock be worth. I would have to say, around $12-$15, but of course that would depend on growth. Horizon had around a 15-17 PE going forward, after they added Tepezza to their pipeline.
The bottom line with trying gauge future revenues and eps for any drug, is to get some sort of idea of what the stock could be worth, IF everything went great. Now since, nothing seems to go as planned, and costs are almost always higher than anticipated, I would give GERN a current price target of $7-$10, and say this is a one year price target, assuming FDA approval(which now has a 97% chance according to JAMA stats).
SS- ARQ, thanks
Appreciate your view
SS- ARQ
This one was recently on Seeking Alpha as a turnaround story. Just wondering if you could look at it, and tell me what you think. They just had their first really good qtr is a while, but they expect it to continue. Thanks
Portfolio performance- up 28% YTD/up 235% since Jan 2022
GERN was a big help
R59- DRCT & GCT
are both very likely scams IMO. A great example of how one can get caught up in chasing scam stocks is the infamous China stocks from 2009 to 2011. I'll never forget putting over half my portfolio in China stocks in 2011. I mean PEs were tiny, growth was spectacular. and balance sheets were healthy. Also, these stocks kept going up for years, so the thought for me was, how can I go wrong ? Well 2011 was the second worst year I ever had. It turned out that 2011 was the very year, a few respectable short sellers proved many China companies frauds, and I lost around 65% on my portfolio that year. So many were basically a desk and a chair- How could we know ! It took me almost two years to recoupe that loss.
Now while I realize DRCT and GCT are not as bad as the China stock frauds in 2011, they're still both scammy. I mean, while its very tempting to play stocks like these and stick with them while the momentum is strong, you never know when they'll be found out convincingly, but when they do & the bottom falls out, it's super ugly- like 50% in a day, and then another 50% over the next week, and before you know it, these stocks are down 90% from their recent highs. I truly feel that will eventually happen with DRCT and GCT. I don't understand what either company does exactly, and am more along the lines of firmly believing the likes of the short report back in December or January on DRCT.
While I realize I am a trader, and put a high % of my portfolio in certain stocks(which in itself is risky), I am nowhere near the level of gamblers that have stuck with stocks like DRCT and GCT. While I realize these people have made out like bandits, they are the same people that will likely lose everything eventually.
Wadegarret portfolio- up 28% YTD/up 235% since Jan 22
Hweb- HEAR
They made $.47 for Q4. I would doubt much seasonality here, and they say they think they can keep up the higher margins, so do you think we can assume being able to annualize that to around $1.90 in eps going forward ?
ELTK now selling for 8 PE going forward !
Great balance sheet, and 25% eps growth expected in fiscal 2025.
GERN- I added today @ $3.16
I think this one is a strong buy here around $3, as they are almost assured FDA approval. The only competition is Bristol Myers drug Reblozy, whieh is expected to do $2B-$3B/year in treating low risk MDS by 2028. GERNs drug is better, but even if GERNs drug Imetelstat only gets1/3 of what Reblozyl gets, the stock is worth $10-$15 IMO
Updated portfolio
GERN 64700 shares
ELTK 15000 shares
Cash $147
Buy GERN @ $3.16/Sell HALO @ $41.51
Sell 1000 HALO @ $41.51 = $41,510
Buy 14700 GERN @ $3.16 = $46452
Hweb- GERN, Absolutely
However my brokerage account was having issues after hours, and I unfortunately have to wait till tomorrow morning. Either way, assuming GERN stays in the low $3s tomorrow morning, I will buy at least 15% more. I had a nice position going into the ADCOM today already, but surely don't mind having more. Hweb, I feel GERN will hit $5 soon with the great news today, but $7+ will take some doing(ie a pharma partner, or even buyout)
luckygm- GERN
Absolutely holding. The advisory board was almost completely unanimous with their decision today, so FDA approval is almost assured. Also so many Hematologists that chimed in today were impressed with the findings, that I think it has a good chance now for a pharma partner or even buyout. Being that their only competition(Bristol Myers- Reblozyl) is expected to to do $2B+/year in sales by 2027, and GERN has the better drug, I'd say closer to $10 is where I would be looking to sell the stock at this point. Of course I might get tempted to sell some in the $7 area.
Littlefish, thanks
KIK/Hweb- GERN, thanks
Sure been through a lot of stress with this one !
I wonder what GERN opens up at !
GERN- Yes Dr Hunter was a huge positive surprise !
I was wrong about my assumption he'd be biased
GERN- 12 yes 2 no Alright !!! Success !!!
GERN- Almost all Hematologists are pro Imetelstat !
In fact a doctor just commented about how irregular it is that the FDA presented Imetelstat as so negative, where almost all Hematologists, including the ADCOM boards two Hematologists see Imetelstat as positive, and see the side effects that are so concerning to the FDA, as totally managable, and a part of treating MDS with any treatment, and not very concerning to them !
GERN- Ongoing ADCOM meeting is getting interesting
That is, the FDA was negative on the drug Imetelstat, but many doctors and responsive patients are telling a completely different story of very positive responses to Imetelstat with the side effects of cytopenias and nuetrpenias very managable. I think there could be a chance of ADCOM thumbs up yet !
Hweb- GERN, yes halted today, while ADCOM meeting
I suspect un halted after hours or tomorrow
GERN- Looks like I'm going to lose, but
you never know. Stock is halted today, but the FDA doesn't like this drug, so looks like it will open at $1 or less. Oh well.
Littlefish- ELTK
I understand, and I would take that comment as meaning backlog could fall as orders coming in could decrease in the second half.due to the ongoing conflict. However in the CC, they gave a rosy overall report, saying that margins will be at 27%+, and they expect overall growth to continue. Also a big question I would ask is, didn't any of the institutional buyers at $16 in a recent offering know backlog could decrease in the second half ? I mean this stock has been demolished !
Littlefish- ELTK
Like to get your take on why this stock is down 55% over the last few weeks. The balance sheet is strong, and the recent slight decrease in earnings for the Dec qtr were from currency translation. The CC sounded positive, and the company said growth is expected to continue in 2024. EPS has been going at the pace of $.25-$.30/qtr, and the one analyst following the stock on Yahoo Finance believes eps goes to $1.53 in fiscal 2025, which would represent over 20% earnings growth. The one negative, as KIK pointed out in recent 13D, is that there is a director that has been selling shares, and he has around 3M shares left.
ELTK continues to sell off, but I have added shares
I must say, that it is highly frustrating watching this stock down 55% from recent highs, and down 40% from the recent offering of $16 only weeks ago.
R59- thanks for the link and article
I must say, this is one big day coming up for GERN- its entire existence it at stake !
R59, point is, Dr Hunter is working with the competition, and
to think he isn't biased, or that he has no vested interest in some form is naive IMO. Dr Hunter will be on the Advisory Board specifically for the meeting tomorrow, as I provided the link you requested, He's being given a waiver to do so, even though he's not a sitting member. I don't see why it's so hard to understand that a Dr working with the competition should not be allowed to give his opinion on another companies drug to the FDA. The whole idea of such an important decision should involve no bias.
Yes his involvement is conflict of interest,
It has nothing to do with credentials. Bottom line is, He's working for the Competition, and being paid for it, and this is the main guy giving the FDA advice on GERNs Imetelstat ?
Dr. Hunter’s employer, Emory University, is participating in the study titled: A Phase 1b/2 Study
Evaluating the Safety and Efficacy of Canakinumab With Darbepoetin Alfa in Patients With
Lower-Risk Myelodysplastic Syndromes (MDS) Who Have Failed Erythropoietin Stimulating
Agents (ESA) [NCT04798339], sponsored by Novartis, a competing firm. The study began in
May 2023 with an anticipated end date of . Dr. Hunter is a Site Principal Investigator
for the study.
At the writing of the waiver, the study has Emory University is
targeting to enroll up to patients and will receive between $0 and $50,000 per year from
Novartis. Dr. Hunter does not receive any salary support or personal remuneration from this
funding.
In addition, Emory University is participating in the study titled: A Phase 1, Open-Label, DoseEscalation With Expansion Study of SX-682 Alone and in Combination With Oral or Intravenous
Decitabine in Subjects With Myelodysplastic Syndrome [NCT04245397], sponsored by Syntrix
Biosystems, a potential competing firm. The study began in December 2022 with an anticipated
end date of . Dr. Hunter is a Site Principal Investigator for the study.
Emory University is targeting the enrollment of up to patients and will receive between $0
and $50,000 per year from Syntrix Biosystems. Dr. Hunter will receive between $0 and $5,000
per year in salary support from this fun
R59- GERN, here is the link
Note Dr Anthony Hunter has been give a waiver...
https://www.fda.gov/media/176605/download
Updated portfolio
Cash $5089
GERN 50000 shares
HALO 1000 shares
ELTK 15000 shares
Updated correction- math error
I have $5089 cash, not $7089
Here was my error as I did the math in my head. SS pointed this out to me $10,629+ ($83560-$72000)= $22189, bit I put
$24189 in the next post hence a $2,000 cash error
Updated portfolio
GERN 50000 shares
HALO 1000 shares
ELTK 15000 shares
Cash $7089
Buy GERN @ $1.71
Buy 10000 GERN @ $1.71 = $17,100
Littlefish- what kind of craziness is including the entire patient
population in a study vs placebo. Fact is, there is no pharma in the world that includes the entire patient population in their final analysis vs placebo- only the respondents. In other words, if GERNs drug Imetelstat has only 40% of patients with MDS get a positive outcome of Transfusion Independence, then it's that group that has to be followed, and that group ONLY that should be compared to placebo. To inclulde the other 60% who are non respondent to the drug is ridiculous, and makes no sense. Bottom line is, GERN's drug Imetelstat produced Transfusion Independence in over half of the 40% respondents at 51 weeks vs 13 for placebo. The side effect of Cytopenias, which the the FDAs huge concern, has been discussed by GERN and numerous hematologists who say the side effect is well managed and reversable.
Also to say that it's normal for the FDA to give their opinion about a drug on occasion is true, but to come out 2 days before the ADCOM with an opinion is highly irregular, plain and simple. Also of course the Advisory Board would have experts in the field of Hemotology, but only one, who is working with a major competitor on a competing drug is irresponsible and a huge conflict of interest !
GERN- bought back today after thinking on it
Why ? I mean the FDA came out yesterday with a scathing report of huge concern over the Cytopenia side effect. To boot, the report came out two days before the most important day in one trick pony's biotechs lifetime. First of all, it's highly irregular that the FDA would say anything just two days before the ADCOM day. Then I found out yesterday that the ONLY hemotologist on the ADCOM board is working on a competing drug with Novartis ! Both the FDA action two days before ADCOM, and the fact that the only doctor on the Advisory board that has the experience to give advice to the FDA is working on a competing drug smells to high heaven !
Bottom line is, 40% of patients with low risk MDS(a type of leukemia), were respondent to GERNs drug Imetelstat, and over half that group is Transfusion Independent(TI) after 51 weeks vs 13 for Placebo. The one side effect the FDA is making a stink about is totally managable according to all Hemotoligists I've read reports on Google. Many cancer drugs ie Obdivo, are huge successes, and only 45% of the patients that took the drug had a positive response, with less than half of them getting a reduction in Tumor size. I think this whole thing with GERN smells to high heaven. and I still think they could get a positive opinion from ADCOM tomorrow. I have only 1/3 the number of shares I once had betting on it, so can't get hurt too bad if I'm wrong.
Updated portfolio
GERN 40000 shares
HALO 1000 shares
ELTK 15000 shares
Cash $24189
Sell HALO @ $41.78/Buy GERN @ $1.80
Sell 2000 HALO @ $41.78 = $83560
Buy 40000 GERN @ $1.80= $72000