As put forth previously, hypothetical scenario considers “a plan”, some 4 years in making, directed at building leading renal operation, with underlying core objective being to address generics coming to market of Big Pharma company operating in the “shadows”, strategizing to bring together 3 small biotech companies under its roof, Keryx, AMAG, and Rockwell Medical.
As such, goes the hypothetical, sequence of events for each of 3 small biotechs, varied in description, subject matters, and binary events depending on company, during past some 4 years and as we speak, are interrelated. In other words, Keryx’s development/true advancement as a company during past years has not been truly independent, but rather in function to some degree of AMAG and Rockwell Medical and, at the core, timeframe involved while and until generics FDA approved and launched.
If hypothetical has validity, could potentially explain following...
1- Keryx failing to fully commercialize, monetize, its promising drug candidate, Auryxia/Fexeric. It has now been some 31/2 years since inital approval for Auryxia, 21/2 years since EU approval for Fexeric, and 4+ months since IDA approval. This calls into question Keryx’s mgt. and BOD potentially being compromised by “a plan” vis a vis true intentions to build shareholder value during the past years.
2- Keryx mgt. continually keeping investors in dark. Keryx mgt. has been running company in an opaque manner which has made it extremely difficult to recognize its true “strategy”, making it nearly impossible for investors to effectively manage investment decisions concernings holdings in Keryx. Keryx has repeatedly disappointed investors and analyst base through lack of performance, poor guidance and lack of effective and transparent communication.
3-Point #1 above, along with company poor compensation practices, has cost shareholders greatly in terms of cash burn and dilution. Executive mgt. has been beneficiary of hefty compensation packages with salaries and benefits, including excessive stock options despite horrific performance on many fronts, and taking advantage of continued low stock price which, potentially, they helped create. The lack of any merit-based structure and continued rewarding mgt. simply for occupying their positions, has become increasingly evident. In turn, this speaks volume and can be characterized as dismal corporate governance.
4-Since initial FDA approval some 31/2 years ago, the fluctuations and historical trend of Keryx’s share price vis a vis short interest, puts into question the existence of a short trading/options trading operation which has seriously disrupted and hurt the company’s market valuation and shareholder value for years. Said operation potentially responding to “a plan”, with a multi-year timeframe, compromising Keryx’s true advancement as a company and shareholders best interests, and allowing for amassing of huge profits in benefit of forces operating in “shadows”, at the expense of company market cap/shareholder value.
5-Majority/Controlling ownership. The forces operating in “shadows”, namely Big Pharma company via 3rd parties acting on its behalf, particularly as of late, have put in motion a power play to acquire majority/controlling interests with the end ojective of employing a “take under” at the cheap.
If one performs detailed due diligence and reviews history during past years for each of 3 companies in mention, Keryx, AMAG, and Rockwell Medical, points #2, #4, and #5 can be applied across the board. The following, potential key company-specific scenarios worth mentioning, directly related to “a plan”..
Keryx - only key potential scenario worth mentioning is a hostile situation between the forces operating in “shadows” and Baupost/Abrams, explained in previous posts. Such scenario, considers Baupost/Abrams as an obstacle for forces operating in “shadows”.
AMAG - connecting dots between Keryx/AMAG put on display ad nauseum. Again, worth mentioning, a potential merger of sorts with Keryx, combining 2 companies, an serving as a mechanism, a route, to supersede Baupost/Abrams for control of Keryx, thus, overcoming Baupost/Abrams as an obstacle.
Rockwell Medical - here we have a peculiar situation with Founder, CEO, and major shareholder being an obstacle for forces operating in “shadows” to gain control of company. In this sense, imo, machinations underway to address situation. Curious enough, in past few trading sessions, similar to Keryx, trading volume usually high, with share price taken down considerably. In the case of Rockwell, and utilizing its 2017 4th quarter and yearly results cc on Thursday as “catalyst”, pps taken down 20% in last 2 trading sessions with volume 4 times avg.
All the above in my opinion, hypothetically speaking, but nonetheless, potentially, a very unfortunate and very costly (financially and in terms of time/lost opportunity) situation common shareholders.
