GTC Biotherapeutics (fka GTCB)

[waynebio]

Very much appreciate the detailed and thoughtful analysis of GTCB on this board.

As for the value of GTCB when taken out through acquisition, with the poison pill in place (is it not still in place from since the prior CEO's tenure?), cash levels, and current trials, it may be unlikely that GTCB managment would allow a sale prior to trial results from either or both the US At3 phase III trial or the AD phase II. If trial results are negative, funding prospects weak and cash levels low a company sale be in the cards.

Assuming success in the trials, GTCB would be worth significantly more than Pharming or GlycoFi which do not have current success in trials for profitable indications.

Also, Dr. Cox has control of 1 million shares, so I doubt he would agree to be taken out at $4 a share because with only $4mm worth of shares, a predictable retirement income stream from a $4mm retirement portfolio would contribute only $200k a year of income to his retirement (spending the typical 5% of assets a year level for life) and would be much lower than the salary he is used to.

Of course the details of a deal could be more lucrative and include additional stock/cash grants or even an employment contract. But assuming Dr. Cox would lose his job and gets no additonal stock/cash grant from a company sale, Dr. Cox should be looking for more like $500k a year income stream from his stake since his current salary is up there which would translate to targeting about $10 a share in value prior to agreeing to go home.

In the case of GlycoFi, the people who agreed to sell had much larger percentage stakes in the firm and were motivated to sell prior to development of the company past the technology stage.

For anyone who has made it this far, it seems the important questions are:
1)
Why is the company stock not worth more? This might have to do with the poison pill making a takeover impossible now so there is no controlling interest value in the stock. As an example of how much controlling interest increases stock value look at how much takeover bids bump up the price such as the Dow Jones stock up 50+% in one day this week. Also, at less than $5 a share and no profits this is very much an individual investor stock play.

I look forward to opinions and corrections on this.