Totally understand your position and frustrations. If the trial was awful I think they would have asked for more than 3-5 months worth of capital. It looks like the offering was given to ligand and insiders, if I read the filing correctly that was just put out. That's hardly bad news.
My guess is that they burned more cash than expected finishing out these trials and moving the rest of the pipeline. Their burn rate has been phenomenally low given the amount of stuff they are juggling, I was expecting reality to catch up.
If burn rate has been higher, it would put them too close for comfort to get to end of the year both trial results, without a partner. Trial results would have arrived when we all would have known they were cash strapped, and everyone would have expected an offering and price would've reflected as much. They wouldn't get a good partner deal if they were desperate for cash.
This gives them time to finish both trials, and to rationally evaluate partner options without fighting a time clock.
There is no way they would have gotten a great partner deal this early. They aren't allowed to discuss ongoing trial results with a prospective partner, so it would have been a blind guess negotiation on a larger pharma's part. Just a lottery ticket.
With good results, they will have multiple bids and will be in a favorable negotiating position. I would have been pissed if they partnered before data, and it would have led me to believe that their data was marginal and that much larger or longer phase 3 would be amiss.
I also was pleased to see that the other competitor SARM had a favorable side effect profile thus far. Problems there would mean problems here.
These prices are like Christmas morning to me. I freed up as much as I could on short notice this afternoon to add on to my position, common shares look great in this range. If prices stay here I will continue buying significantly. It's free money to me. The markets are fickle. We are 2.5-4 months away from data, that's an eternity in the biotech game. This should move significantly when results get closer, probably late august. I will most likely be easily able to see my sub-$1 shares of common at 1.25+ at that time, probably more. Maybe I'm wrong, but this has been a steady trend I've played with other biotechs. I made a lot of money on a biotech about 2 years ago that dipped during the summer lull that had FDA pivot point approaching, and didn't need to hold it through news.
Truly I feel nothing has changed. I continue to believe that management will only be selling themselves out of profits if they play this wrong, and that this was a very prudent move. When they stop selling shares to their proxies, and start selling them to us common grunts, I will start to reevaluate my overall sentiments.
