State of ADXS is that they are valued by the market at cash on hand, plus, at most, $10 million.
That valuation includes the findings from GOG-0265, an ongoing pivotal phase 3 with an SPA, and another phase 3 trial ready to go. Valued at practically nothing because a deal didn't materialize immediately after the company guided that it would seek a partner.
That valuation includes two different approaches to a currently hot topic in oncology, specifically relating to the targeting of neoantigens, which has a solid proof of concept in the preclinical space, not to mention the importance of neoantigens to efficacy of immune checkpoint inhibitors.
That valuation sets at zero the over $400 million partnership left with Amgen, whether we know the details of milestone payments or not. The market has decided this is valued at basically zero.
Basically, the market is screaming at me that this company has nothing in the tank at all. A share offering at these prices do not present a significant position of strength. However, I do not agree with the market that the technology ADXS has is worth, at most, $10 million today.
My reassessment is that this is not true, and the further down it goes, the clearer it becomes that the market is not correct, long-term.
So what's the situation with my shares? I hold 12k at this time. What's the worst-case scenario, assuming we don't hear much about the science?
1) They wind down Axal studies because they can't find a partner. The market already values this at next to nothing, so it deserves no change in market cap.
2) They need to execute another cash raise in 1H 2019. If we hold at $0.90 for whatever reason and see the same drop as we saw here, then they'll sell at around $0.65, which would take around 31 million shares and basically make my 12k shares today into 6k shares (relatively speaking) tomorrow. There would need to be an accompanying increase of the authorized shares, no doubt.
If they end up securing a serious partnership after that, or if they find evidence of efficacy for one of their neoantigen programs, then what would they be worth? What would my shares be worth?
If the market decides that ADXS should really be a $300 million MC, then the PPS would be somewhere are $3-$4. This would be a healthy return on the risk that I took on, as of my current price per share.
Conclusion? While it's frustrating to watch and frustrating to think about what we could have done selling at $1.5 and buying back in or whatever, nobody has a crystal ball here. All the people twisting the knife saying they "called" this decline mean nothing to me. They made a guess. They were right. I made a guess. I was wrong.
But even at these levels, a reasonable success at any point between now and after a theoretical cash raise I described earlier would place the corporate value well above a point that makes this worth it to me. So I continue to hold for now. If something happens to cause a spike (or especially if it suddenly goes up for no reason), then I will probably take some money off the table.
