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The only analyst asking questions was from HC Wainwright...how disappointing and speaks volumes about how much Wall Street thinks about this company.
James, my experience and expectation is that payments on these kinds of deals are strongly back-end weighted with token amounts for interim preclinical and early clinical results. I have not figured those potential $$ into my thinking because I doubt there will be much before 2019. AIM2CERV and Europe are still the two big drivers for this company's future. We simply need cash to get to those outcomes. If we can/ do, then the other stuff (NEO, etc.) simply makes the value of the buy-out that much greater.
jckrdu, you say, "While all of us want no further dilution, if ADXS can announce some good news and then raise capital at a much higher pps than current levels - via a moderate sized offering (20% dilution max) - that may be the best way to increase shareholder value for the long-term."
Completely agree and that's what I hope/ expect in the next 3-4 months. If that does not happen or something better I'm likely to take my losses and step away from ADXS.
fbg, you say, "I know you are looking at things prospectively and the timing of your investment is certainly much better than mine, but one needs to look at the track record of the company's execution, inefficient use of funds and lack of shareholder value generated on capital already raised, which leads me to my belief that shareholders would likely be better off if the company is outright sold today instead of risking more dilution at a low stock price and more potential execution mis-steps toward commercialization."
I understand you invested earlier and will not achieve the same % returns later investors like myself (early 2015) will receive if the company is successful. But, to be perfectly blunt, your understanding of timing and expectations of returns from this kind of investment are naive. No one should make an investment in a Ph2 biotech and imagine they are not going to take significant dilution on the way to monetization.
I invested later than you and will tell you that I was at least 2 years too early myself (I thought the PhII cervical results were going to elicit a sooner significant partnership) but the biotech capital market fell apart in 2015-2016. I kick myself for not seeing that bubble build in late 2014, early 2015. That event negatively affected hundreds of pre-revenue biotechs, including ADXS. I stayed invested in ADXS after ~August 2015 for two reasons: (1) I believe in the science, and (2) I believed in DOC based on his moves to that point. I was not disappointed. IMHO (and I know we differ here) DOC was masterful navigating that capital market implosion in 2015-2016; cf. Amgen deal.
I still believe that with good science luck, benign capital markets, and attentive management, ADXS will be a big winner and even you -- despite your long, painful investing journey -- will do well. I understand how investing fatigue can overcome people -- it's happened to me.
You blame management for the failure of ADXS share price to appreciate, but IMHO that view is your need to find someone to blame. There's no one to blame. The biotech capital market imploded. ADXS got sucked down with it. Its science has been managed very, very well. Its capital, if not its spending, has been managed well. Sht happens.
I've invested in hundreds of companies, run several as CEO, worked in Silicon Valley and from my experience with CEOs your imputations about DOC are almost certainly off-base, both to his "honesty" as well as to his effectiveness as a CEO. I'm not about to say he was perfect -- he obviously got over his skis on spending and the BOD took him out. He started to take more risk than they were comfortable with. That's not malfeasance nor incompetence...it is a difference in strategy and risk tolerance. He may well have run the company into the ground had he continued...on the other hand he may have pulled a rabbit out of the hat. We'll never know.
However, you MUST understand that in investing it's ONLY the future that counts. Bemoaning what went wrong when that analysis provides no insight into the future is a waste of analytical and emotional energy. In all friendship and good intention, I urge you to let go of Dan. Stay focused on the indicators for future ADXS success.
Personally, I believe this investment is at an EXTREMELY risky juncture because we have no clue how good Lombardo is or what he's going to make happen. He's got little track record I can discern in which to have confidence. I'm as close to letting ADXS go as I ever have been because I don't like the fact that the BOD is not looking for a killer-good CEO and Lombardo does NOT impress me, so far.
James, you say, "What about Amgen milestone payment for start of NEO,this will bring in some revenue?"
Yes, Amgen will be making payments, but I do not know if the amounts and conditions are public info (I should have examined this closely, but haven't) and what they suggest might happen in that regard. Even if we know amounts and conditions, we can't be sure when the conditions will be satisfied, as the timing of science developments are hard to predict.
But, yes, in theory, Amgen milestones could make a significant difference in ADXS cash needs and timing of those needs.
Do you know conditions and amounts?
Bourbon, what analysis indicates to you that dilution is likely to be 100%-200%? What are your assumptions about cash burn and the timing of events that could move the pps, etc.?
My view that 33% dilution is possible assumes no new partnership of significance or significant payments on current partnerships in the next 12 months. Here's my analysis:
Cash on hand July 31 = $90M. Cash burn looks to be ~$9M/mo, but I'd expect Lombardo to get that down to ~$8M/mo or less. Let's say ADXS spent $16M in August and September, so they now have $74M cash. That means they have ~10 months of cash, but they also show $10M revenue for 9 months. Let's assume that's cash income, so assume $1M/ month (probably payments from partners, so this income forecast may be off). Let's give them, then, 10 months of runway from October 1, 2017. To me, you should never raise funds with less than 6 months of cash, so that gives ADXS ~4 months to get more funding.
There are 3 or 4 events that should happen in the next 3-4 months that could drive pps to $10+: EU MAA filing and three trial prelim data readouts if these are positive.
As for financing, there can be many different scenarios, but let me suggest one hypothetical that I think is not unreasonable. Let's assume a market value of $10/sh based on "good news" in the next few months. Let's assume funding would be at $8.00/sh for 20M shs (33% dilution). That would result in $160M raised which should carry them into mid-2019 when interim readout from AIM2CERV should occur (as well as other Ph 1-2 trial results along the way). If that data is positive, ADXS is on its way to a multi-billion market cap.
And, of course, lots of good and bad things can happen between now and funding and between now and AIM2CERV results.
If we don't get the EU MAA filed and if we don't get encouraging trial results in a timely way, then I agree a 100% dilution (40M new shares) could result. That would be painful but might not totally eviscerate current investors IF trial results, especially AIM2CERV are positive in due course. 200% dilution? Well, that's a disaster scenario, I agree, but I do not think it likely or I wouldn't be invested.
So, anything is possible and we should know a lot in the next 3-4 months. I'm betting we catch our second wind and look forward to new funding, however it is raised. Unlike some, I don't believe partnering is necessarily the best way to raise funds to maximize future value for current shareholders. It can be, but not is not the default "go to." Equity capital can be a better deal....it all depends.
fbg, you say, "Attil, I think it would be in all our interests if Lombardo sold the company soon..."
It may be in your interests, but it would not be in mine. I bought ADXS to take on much more potential reward with much more risk than a cash out in the $20's would realize (say, $1B at current shares outstanding).
I do hope ADXS gets into the $20's so you can happily sell, but I will be holding beyond that if this company does what I believe it can do. I'm still a believer in DOC's sense that $6B is a minimum sale point, and maybe quite a bit higher depending on how the trial results develop. And I'd be happy to take as much as 33% dilution of my current position to get there. It might take 3-4 years to get there, but I can wait.
So, you see, not every investor has your investing criteria -- and not everyone has mine, I am sure. Getting to my outcome guarantees yours along the way. But, if ADXS gets sold in the $20's, well, I think that would be a "steal" from current owners. I know I would feel robbed!
On the other hand, if it goes to $1B and then flops back to zero, I'll hope you were able to cash out. And I will not be unhappy with my outcome of $0. Why? It's the bargain I made because I believe this company will either be worth a LOT or damn little....not much in between. That's what pre-revenue biotech investing is all about...and I do have a portfolio of biotechs, because you'll only win maybe 1 in 5.
Ig, I hope your theory is right about shorts not having Dan's strategy to work to the short-term (i.e., 2-3 year) downside. Let's hope this is the last hard leg down before shorts move away from this $$ opportunity.
If we look at SGMO as a parallel situation -- very rough parallel, of course -- their pps went from $7.50 when it was announced Sandy Macrae would replace Ed Lanphier (6/6/16) to $2.65 share 6 months later (12/8/16). It then slowly began to climb when investors had a sense Sandy was moving the company in a more focused, commercial direction. Then, the pps exploded on May 10, 2017 when their big deal was announced, almost 1 year after Macrae took over as CEO, and good clinical news has kept the SGMO pps pot boiling.
Not saying this is what will happen with ADXS, but that's what I can only presume the BOD is trying to make happen.
Ignatius, I take your point that there has been a change in strategic course from being willing to sell equity in preference to IP in exchange for investment $$ to now being more willing to sell IP versus equity. However, DOC was not on a pure "sell equity" strategy: note Amgen and other partnering/ licensing deals. He was opportunistic to do one or the other when he felt it benefitted shareholders. However, I agree he probably was rejecting deals the BOD wanted taken, which led to his dismissal.
However, you should acknowledge that "sell or license rights" IS DILUTIVE just as selling shares is in that selling IP suppresses returns to current shareholders -- it's just hard to know how dilutive "sell or license rights" is because you can't know exactly how much revenue/ profit is being given away.
I'm still invested in ADXS, but I'm far less comfortable with Lombardo than I was with DOC...although I do agree DOC's investor day and Kathy Ireland moves were perplexing and not well-received by me. If we don't see a meaningful deal for $$ (or other pps-moving news) in the next 3-4 months, I will likely pare back or exit my ADXS position.
Ig, I'm sure he's working to raise money through partnering deals, but that's not "news" of any meaningful kind IMHO -- that's what biotech CEO's are ALWAYS doing -- it's their core job.
I was looking for not only a program review (which could have been done in 10-15 mins), but also a financial review (for which 0 mins was allocated).
As for others on this board who think DOC is the reason for ADXS current share price, count me on the other side of that debate. ADXS share price had been bouncing around $8.50 for 6 months until the market learned he was leaving (30 days prior to his actual departure). Now it's at $4.40...almost 50% drop.
I'm with the market in its reaction to this presentation -- ADXS has dropped about 3% suggesting those following ADXS did not see anything positive in this presentation. I did not expect "blockbuster" news of any kind from Lombardo. I was hoping for a more focused and upbeat presentation around how this company will fund itself into 2020+.
Ig, you're right about Lombardo and the firm he came from: dealers. And, you're right about speaking skills not being meaningful per se.
I should sharpen my comment to my disappointment that Lombardo did not directly address the company's financial situation and how he expects that to be addressed. What's the expected burn? What are options for raising funds?
It's not unreasonable to expect a new CEO in a pre-revenue company that is a long way from product sales to talk openly about such matters. He has public investors that deserve to know how he plans to manage the company's financial situation over time. he said ZERO about that.
Thanks for asking me to clarify.
"Active partnership discussions"...geez, guys, is this really new news for you??? Come on, DOC was always in active partnership discussions...and delivered on them with deals. We can only hope Lombardo will do the same. But as far as such a statement being meaningful....meh.
Lombardo is as about as uninspiring speaker as one can imagine. To the extent that finding investors depends on telling a compelling story, this guy is a LOSER, in capitals.
Substantively, nothing new in his presentation as far as I can tell. The presentation again makes a plain as day how much this company needs significant additional investment dollars to pursue its therapies. Revenues -- except what might come through the current agreements (and I'm not sure how much/ how soon those current partnership revenues could be) -- are surely no sooner than 2020, even with timely EU approval, which looks like, at best, late 2018/ early 2019. I have always been figuring mid-2019 and then 6-12 months ramp to actual sales.
While timing and need for significant funding has been obvious all along, none of this concerned me when DOC was CEO because I had confidence in his ability to raise funds at good prices in a timely way. He had done so all along. His firing has severely confused my thinking as to whether I should continue to hold ADXS or move on because so far I do not have confidence in Lombardo -- he has done nothing to suggest he will be effective raising money and keeping the programs on track.
Sigh.
The stock is worth what people will pay for it, no more, no less. Do I think the pps could get to $25 before EU renders a decision on the anticipated application? It could. A partnership with more substantial upfront cash than Amgen provided could move the pps. How much? Hard to say. Aratana approval could move the pps. How much? I haven't done the calculation because I honestly don't care. Anything else? Not that's obvious, although we could get some Ph1/Ph2 results from the DUAL or PSA or anal, NEO, etc. trials which, if good would move the pps significantly. Will we? Hard to know. Many unknowns and may well not happen timely or strongly to our favor.
So, sure, there are lots of possibilities. My "end point" is not a pps number, per se, but rather the judgment of the ADXS BOD and Adage when they believe it's time to monetize the investment. I'm not expecting that before 2020. I'm a "venture" investor and accept investments like these take 5-7 years from when I inv st to pay off. I first invested in ADXS in 2015, so it's early in the game for me. Of course, I'd exit if trial data are not good.
Hi, James. EU approval will be important TO PPS. Agreed, but I'm doubtful we get that before mid-2019. I know people say the timing I indicates mid-2018, but they're not considering the likelihood of delays, which one should expect, IMHO.
I would never suggest those looking for a 50% or 100% gain on ADXS are wrong-headed, unless they are arguing that's all this company will ever be worth and one should sell when the pps gives them that gain for that reason.
As for this company getting sold for, say, $1B because it's only worth $250M now. No, I am confident the CEO and BOD would reject any such offer as unserious. Of course, it's highly unlikely a BP would bid 4x the current pps for a company like ADXS. They'd have a hard time explaining why they paid such a crazy premium.
The reality is that ADXS still has a lot to prove as to whether their science works well enough to convince others an FDA-approved therapy is all but guaranteed. I do not believe BP will buy ADXS before that milestone is met, because that's the industry benchmark for acquiring clinical companies like ADXS. And, the "all but guarantee" of an FDA-approved therapy will not happen, in my opinion, before interim review of AIM2CERV at the earliest. It's not clear if/ when that will happen, although I am hoping sometime in 2019. The study is planned to complete in 2020, but it's not clear when results will be announced, could be into 2021...and that's if there are no prior delay. Aratana approval will help, but such a milestone is not definitive. Other Ph1/2 trial results that may be announced in 2018 or 2019 will help, but will not be definitive.
If others disagree with that thesis, I'd be happy to hear opinions as to what point in product development ADXS would be attractive to BP and then, given that attractiveness of that point in product development, what the value of ADXS would be.
I think $7B is a minimum for AXAL plus the breadth of what a Lm NEO or HOT might well be able to deliver...although knowing the approvability of therapies from those platforms is even further off than 2019 or 2020. If AXAL works and Ph1/2 of NEO or HOT look good, we're off to the races.
To clarify my comments...
I apologize if I do not maintain an ongoing dialogue with those who reply to my comments. I run a business and only get sporadic opportunities to read/ comment here. I do appreciate the come-backs, it's what makes for vibrant examination of our various investment theses.
The reason I sound skeptical, suggest time-lines that are more extended than many believe likely, and believe further equity raises are likely at some point is only because I am very conservative in how I assess my riskiest investments. Despite what anyone might say or think, by any reasonable objective measure, ADXS is a long-shot (despite the GOG results, which clearly are good -- if not spectacular...I'm a statistician, so I can evaluate these things with some competence). Almost all pre-revenue oncology companies are risky, even with great Ph2 results. There's so much that can go wrong, even with good science and good management.
Much of what people suggest here is "best case" -- especially in terms of the timing of milestone events, both those highly likely to occur (except for timing), for example: Aratana approval, EU submission; and those more speculative (like new, lucrative partnerships) both in whether they will happen and in their timing. "Best case" is nice to dream about, but that's not good investing strategy.
Most VC's I know (and I know quite a few) always and constantly identify "what could go wrong" and make that the foundation of their assessment of each investment they make. They believe every investment will be a winner (or they wouldn't make it), but they also know that most will be losers - it's just that there's no way to know which winners will stumble.
So it is with ADXS. I expect it to be a huge winner -- and $50 isn't even close to what I think "the win" will be. But....it will take longer and may well be "costlier" (i.e., dilution) than most here imagine. So, talk about "getting to $10 or $15 or $25" I find irrelevant. I'm not looking for what will get the pps to those levels. I'm interested in whether what ADXS is doing will get us to $100 or $200+....
Ignatius, you're right about Iicensing being specific to therapy, indication, and/ or market, but whether a linensing deal is better/ worse than equity depends on the specific numbers in both cases. My point is you cannot assume equity funding is less preferable to partnering or vice versa. I'm just trying to bring some economic sense to folks who think prima facie that equity funding is less desirable than partnering. The answer is: it all depends.
My point about EU decision on marketing is exactly what you say: mid-2018 is the earliest decision time-frame, but a prudent investor should expect delays and not expect that decision until mid-2019. I could be wrong, but that's how I invest: being prepared for the worst.
Gajj, I got a bridge to sell you in Brooklyn if you believe that EU decision comes in 9 months from submission. Read the fine print. There's all sorts of ways for EU to delay further by asking for more info or claiming submission is not complete, and more....
Ignatius, partnering IS DILUTIVE. It gives away future revenues for a payment today. It dilutes the return I will receive in the future. That's why it's incidious because you can't know how much you've been diluted at the time of the funding. I'm not saying partnering is any better or worse than raising equity funds. But, anyone who thinks partnering money is not reducing their return does not understand corporate finance.
Mpreorder....I'm not sure submission to EU gets us much. Approval will move our pps, for sure, but I think that's unlikely before mid-2019. Other events could happen that will move ADXS pps above $10, even $15. And, if we partner/ license to generate funding to carry us thru 2020 we would see pps appreciation on that.
My core point, though, is that the returns someone should be anticipating by investing in a highly risky company like ADXS cannot be 50% or 100% or even 200%. The risk involved requires you believe 5X-10X is possible. This segment amounts to nothing less than public venture capital investing. Invest in 10, and 6 will go to $0, 2-3 might make you a little money, but 1-2 will be 5x-10x or more. That's the distribution of risk in companies like ADXS.
bill_y, I'm well-invested in ADXS because I've studied the science and believe it is sound. I've read the (limited) results so far and while clearly not definitive, they are good enough to convince me there's enough "there" there. This is a complementary investment for me against ZIOP (and I have a basket of non-Oncological biotechs for diversification in this wildly speculative space). I've owned ZIOP for 4 years and ADXS for 2 1/2 years and my horizon for both was 5-7 years from purchase unless/ until seriously negative clinicals would show up. In that case, I'd expect to take an 80% loss and move on.
IMHO, that's how you invest in biotechs, unless you're a super-sophisticated options trader who can go long and short quickly and make money on the swings waiting for the payday.
GLTALs!
FBG asked which option we would choose:
1) Cash buyout of the company in the coming weeks or months in the range of $20 to $25 from an entity like Amgen who will be able to take the platform to market faster and exchange your shares with cash at a nice premium so that you will never have to worry about short manipulation, poor management of the company, another clinical hold, etc.
2) Another massive dilution that pushes the stock price down even lower than the level we are at (and the current stock level ALREADY represents 40% shareholder value destroyed over the last four years under O'Connor) at a time when the broad market is at an all time high and the bull market is getting long in the tooth?
I'd go for #2, without any hesitation. Why? Because if they raise, say, $100M at, say, $6.00/ sh (is that "massive dilution"? I don't know, but it's reasonable given previous raise pricing), that's 16.7M more shares on a base of 40.5M shares, that's 57.2M shares total. I believe with $100M more in the bank, ADXS will be able to easily not only complete Ph3, but get through FDA approval. That would turn this company into one worth at least $5B in 2 years.
So, $5B/ 57.2M shares = $87/ share. So, while you are happy with $20-$25/ share undiluted, I'm not. I'd rather be diluted "massively" and earn 3X what you're willing to settle for.
I really do not understand your thinking, FBG.
Dilution is GOOD when it leads to greater value creation, which would certainly be the case with ADXS UNLESS you do not believe in the Lm platform.
Personally, I think with another $250M in dilutive capital, ADXS could be worth $20B because it would have one indication in market and 2-3 more coming on line soon (all that in 5 years). That's an easy deal for me to take.
Unfortunately, Mara Goldstein is not a particularly successful analyst...
https://www.tipranks.com/analysts/mara-goldstein
Would be better if we had a top-rated analyst in our camp.
Ignatius, you say, "...ADXS is not going to wait for EU approval to sign an EU distribution deal. That makes little sense."
I'm not sure I agree. The deal ADXS could get with EU marketing approval in hand would likely be far better than one prior to approval, with timing and possible conditions unknown by a partner. DOC drives good bargains, IMHO, and I think there's an argument to be made for not cutting a deal until EU approval is in hand and "clean." Do you disagree?
While a cost-shared trial does not help Advaxis's balance sheet, which it certainly could use, especially when Advaxis will bear (significant) 3rd party expenses in any trials, we have no idea what the revenue-sharing agreement is. Therefore, it is impossible to judge the long-term economic pros/ cons. If Advaxis can fund itself through other means than financial support from BP partners in these combo trials, it may have a MUCH LARGER terminal value than it would if it had to give away a large chunk of the revenue in return for short-term funding.
These deals are just too hard to judge in toto, although I agree that BP not having "skin in the game" is concerning. However, if results look promising, there would be no reason for BP to stint on effort even without an upfront investment to prod them. After all, they are smart enough to understand the pointlessness of chasing sunk costs; i.e., they won't throw good money after bad, but would go all-in if indicated, irrespective of upfront investment.
Let's see what the market thinks in a couple of hours....
First, he can't grant himself anything. The BOD has to approve. So, your argument is FUNDAMENTALLY FLAWED unless you believe the BOD does not care about shareholders...like Adage, Fidelity, Broadwin, Blackrock, et. LOL!
The BOD understands what Dan has done already and its value to them DESPITE current pps...literally hundreds of millions in value. Further, the BOD knows what Dan is doing that we do not yet know about. The share award is a "tell" that big things are coming soon. Whatever Dan, Sara, etc. get in comp will be worth it if our market cap goes to $1B, $2B, yes, $6B. If they don't perform, their stock and options will be worth diddly-squat...same as us, fbg. Their fate is our fate and vice versa.
Based on past performance, I have no doubt DOC will create significant further value for shareholders. Current pps is not relevant, period. I trust our heavy-hitter co-investors to support the BOD's comp plan, which they (mostly) did in the recent shareholder vote.
People's focus on ADXS management comp is weird to me, honestly. If people want share price to efficiently reflect value potential, then they should be invested in major market average ETFs, not biotech.
So, three cheers for Dan, buying shares regularly and not selling anything (except to cover tax obligations), and his management team. Awesome job they are doing in generating tangible business results (e.g., efficient funding, trial strategy, EU application). Couldn't be happier with them. Worth every penny. In time, we all will do well.
Blueyedcatch, what do you mean our Ph3 is "almost done"? Corp presentation says not done until 2020. That ain't soon.
Verrryyy helpful, Terry. This is useful background/ context.
zzaatt, apologies if I'm harping on risk and making those statements too generic. The core risk is that very few other companies or academic institutions have been/are pursuing/studying listeria-based approaches to immunotherapy. Thus, there's far less scientific information/ knowledge "out there" among market participants by which they can judge the possibility of success. Lack of knowledge = risk. For ADXS investors.
So, as you say, only trial results will dispel that risk. But, I don't see sufficient trial results being likely for another 1-2 years. Yes, we will have some interim results; yes, we could get into the EU market with AXAL for cervical. And those events, if positive, will move the pps ahead...to what level is hard to say, but I could see $20-$25/sh, even $40 after EU market approval (that's not likely for another 12 months, IMHO). But, to get to the much ballyhooed $6B market cap will require, at a minimum, the AIM2Cerv report out...late 2019. Even then, I think that market cap number is a stretch.
Why do I think that $6B for successful Ph3 is a stretch? I've done a back-of-the-envelope analysis based on ~15,000 new cervical cases in the US and ~30,000 in the EU each year. I'm not enough of an expert to be confident in my estimates of the price ADXS could charge for AXAL cervical treatment or the % of cases that would use it versus other therapies. Then, one has to judge how that total value estimate is reflected in market cap.
If there are any on this board who have some expertise in the values for these variables, please weigh in. That's just for AXAL cervical. Obviously, more value could be driven by anal, head&neck, etc., but those Ph3 results/ approvals may be even further out.
If anyone else would like to provide an analysis specific to ADXS that argues there will be sufficient evidence to convince a broad range of market participants that the Lm platform works, even in a single indication, before ~2 years, I'd love to hear it.
Further, if anyone has enough expertise to show us how an approved cervical therapy (or anal or head&neck therapies) might generate market cap based on analysis like I outline above, that would be great!
Actially, fbg, I think ADXS's terminal value could be north of $6B. My hunch is Dan sees a way to leverage what ADXS has developed across several indications and if there's strong enough science to the first one or two, the next two or three could be relatively quick to FDA approval. Any given cancer indication could be worth $1B-$5B with FDA approval. Do the math.
HOWEVER, this will require significant patience among current shareholders to accept further dilution as part of the fu ding requirement to get there. We're talking ~5yrs, which isn't to say ADXS value won't hit $1B, $2B, etc. along the way. Just made guy not be a straight, even climb.
Keep in mind there still is risk in ADXS despite excellent results in various trials.
While the Mt. Sinai news story is very positive and our Ph2 AXAL results were strong (as well as other trial data we've seen), here is a table showing average chances of failure/ success in trials => approval:
http://www.investorvillage.com/smbd.asp?mb=16353&pt=m
I'm not posting this to be pessimistic about ADXS, just realistic that there is still a lot of risk and at least 1-2 years before that risk can be sufficiently dispelled. Aratana approval would be very helpful. European approval will be a huge boost if we get it. But, if Ph3 does not succeed that approval could be withdrawn.
Keep all risks in mind no matter how optimistic you might be.
fbg0316, enough already of rehashing this history, which can have many different interpretations. Please, please stick to your helpful due-diligence and not this obsession with meaningless matters. Anyone who would make an investment on such an offhand comment by a CEO deserves what they get. Thankfully, his comment, while rash and inaccurate in terms of timing, will out in due course.
Investor162, I'm with you. There are are a few people on this board who have what IMHO is a weird and unhealthy fixation on Dan's compensation. Those folks obviously have no experience in venture business or exec comp.
It seems some people are wrapped around their axle about share price when that is simply not what any biotech investor focuses on except as opportunities to trade (if they're of such an inclination). Investors focus on the underlying fundamentals: e.g., Is the company sufficiently capitalized and does the CDO understand the need to raise money at every decent opportunity? Is the company making clinical progress, not only in terms of the science outcomes, but more importantly in the strategic thinking about which trials to initiate with whom and with what designs?
I won't reiterate the extensive accomplishments Dan has managed as CEO -- others have listed them...again and again. But, there are some who are obsessed with the current stock price and how much Dan is being paid. Weird, just weird in my opinion because neither of those issues are things on which you would judge whether a pre-revenue biotech company is going to payoff handsomely for the obvious risk involved.
But, I repeat myself. Sigh.
Question for TA experts on this board...
I am not a TA expert...in fact, I know only a few buzz words and a few indicators and such. Here's my question:
If you look at the daily ADXS chart from 2014, you can draw an upsloping line through the lows starting in late 2014 through low points at (approx) February 2016, Dec 2016/Jan 2017 and then last month. You can then draw a downsloping line from the all-time high in (approx) June 2015, through the high in Aug 2016 to Mar 2017.
If you do that, you get sloping lines that converge on about now... does this suggest a "pennant" or some such, or is this "pattern" I am seeing insignificant from a TA POV? If it is a "pennant," what might it mean?
Low valuation for biotechs with outstanding Ph2 results is not at all unusual, fbg. Pick any 10 biotechs in that situation and I'll guarantee all of them are way under what they would be worth with an FDA approval. While ADXS market cap may be at the lower end of the distribution of such discounts, that would be because of its out-of-the-mainstream technology, which because of the nature of listeria and mechanism of action, has always had significant doubters in the science community since the beginning, as you know from the history of Yvonne Peterson.
However, these conditions are what make ADXS an incredible "buy" if we are right. It's unfortunate that many investors are underwater, but that's the nature of biotech investing. It's all but impossible to buy at the secular bottom. And, being down 50%-75% before vindication is not unusual or to be fretted....if there's reason to continue to believe in the science and the CEO's ability to raise capital at every well-priced opportunity.
That's why I'm invested in ADXS: I think Dan is a genius fund raiser and strategist and the science continues to look good.
Good insight, Ignatius. I suspect the cost of trading to keep ADXS range bound is well worth the premium capture. Lacking dramatic news, there would not be much underlying marginal demand to fight against.
And, of course, big traders have a very well-worked out calendar as to when news will be likely. The only possible surprise news in the short run AFAIK would a Euro distribution partnership predicated on EU approval. But, any pop from that would likely b sold down over time. Just the nature of the beast until Ph3 approval or buyout.
Fraud fighter, I think it's unlikely that shorts know more about trial results than we do. Sometimes shorts get trial information a few days ahead of the public, but not typically.
Short positions in biotech have two components: (1) there is big money on Wall Street that plays a short strategy across a wide range of biotech names, not based on the individual situations of each of those biotechs, under the belief that more will fail than succeed. That's a darn good bet. These short strategies are very sophisticated with hedging long and short to squeeze profit out of the these stocks as they fluctuate. But, the net bet is: we win if we short a basket of biotechs. ADXS is in that basket. (2) individual biotechs are shorted more than others for all sorts of reasons, but mostly when there's a general belief the science is either not likely to succeed or when there's a lot of competition with similar approaches or for the same indications. ADXS is "left field" science. NO ONE else, but Aduro, is using listeria and its mechanism of action. I'm not enough of a bioscience guy to give you an elevator speech explanation for why/ how ADXS science is doubted by the mainstream, but it is.
So, don't think ADXS is unusual in the short action against it. Shorts don't know more about trial results, but they know WAY MORE about trading and risk arbitrage and they know that biotech, as an investing segment, will have more companies consume capital (i.e., not payoff) than companies that will be big winners.
Sandman44, you say, "...Looks like a good time for some good news on daily progress at ADXS..." News on daily progress? Are you serious?
ADXS is one of the best biotechs in terms of their shareholder PR.
Sandman, you ask a reasonable question, but then put it in a context of an implied question of "I don't think these guys are doing much with all the people they have," or at least that's how I take your comment of, "...if I had a crew work 4000 hours I DAM SURE better show something for it." ADXS has plenty to show for the work they do and, IMHO, have been incredibly productive under Dan getting a lot of important work accomplished. Check slide 39 of their corporate presentation on their website for a listing of 15 recent/soon-to-be accomplishments.
So, what do people do all day you ask? Here's partial list:
- Trial design -- takes a lot of time to not only consider all the details required, but to coordinate with academic study leaders, trial sites, writing up the details of the design, the training requirements/ procedures. ADXS no doubt explores 2-3 trial possibilities, maybe more, for every one they initiate.
- Trial coordination -- huge time requirement to oversee trial execution to be sure enrollments are happening, questions answered, problems dealt with...
- Data analysis -- they are constantly examining trial results to a much, much greater degree of depth than we ever see.
- Paper writing -- it takes a lot of effort to write/ put together an academic paper for publication of results.
- Science analysis -- ADXS has to keep up with the wide range of science being done in academic and by competitors to be sure they understand the evolving landscape and how to take advantage/ avoid problems in their own science. They're also look for research relationships and such.
- Pre-clinical research design/ coordination -- I'm sure ADXS has any number of pre-clinical science efforts going. I don't know if they outsource all of this to academia/ contract labs or if they have their own pre-clinical facility, but in either case this requires significant time and effort.
- Market/ competitive analysis -- beyond science, one must organize/ manage data generated mostly by 3rd parties. Still, someone has to assess and integrate this information for decision making.
- FDA paperwork...don't get me started on how much of this they have to deal with!
- Partnership investigations/ negotiations -- DOC cannot do this all by himself. He has others involved in reaching out to a wide range of businesses around the world looking for opportunities to collaborate. Discussions take a lot of time and effort.
- Legal -- while ADXS may have outside counsel doing a lot of the detailed contract and patent writing, I'd bet they have a small staff of in-house lawyers to coordinate/ supervise this work.
- Manufacturing design and management.
- Finance/ HR, etc.
I'm sure I've missed a chunk or two, but ADXS has 7 MAJOR indication efforts underway and no doubt several more in earlier stages of consideration/ development that we don't know about.
My guess is people are working 60-70 hour weeks at ADXS to make that business a success.
Hope the above is helpful.