Hi Flo,
Sorry for the long delay. I've been giving a series of talks, and so have been on the road. I enjoyed the run up to Friday a lot. The collapse since was expected. I've not sold, nor do I expect to in the next few months.
In a brief answer to your question, I'm not hugely changed on my basic outlook on GTCB since the FDA's approval. As with many of us, my opinion is that the FDA's action on Friday has put its stamp of approval on an entire means of production -- and one that GTCB uniquely controls (until 2021) and that allows complex therapeutic proteins (read FOB's) to be made cheaply and in large quantity. Since I've been involved with this stock, that has been the promise I've seen in it -- so this is good news.
Bad news is not limited though. I certainly wasn't expecting some glorious FOB/ other partnership to be announced on Tuesday, but I share DD et al's shock at the rote performance by Cox. That he threw out the sidebar comment, something to the effect that he would expect GTCB to be income neutral within 3-4 years, was as honest as I have seen him be -- but almost as if he did so by accident. As if it were possible, I'm even more markedly skeptical of Cox and company's ability to monotize their great science than before. They've not done it to now -- I don't give them much credit in being able to do it now -- if it is up to them.
Other points of concern are obviously the impending LFB takeover, the buyout of Ovation by a pharmaceutic company who is explicit in their focus on CNS medications (leaving Atryn where?? -- still supported legally, but not an ideal circumstance), the ongoing lack of interest in the DIC Phase II trial, etc. All of these potentially small problems -- but that they were all side-stepped by Cox -- which makes me concerned that he's either too stupid to have recognized or too dishonest to have mentioned their existence in his Tuesday presentation -- I'm afraid it is the former. As obvious as these problems are, they need some quick, public mention, which he wasn't able to muster to sufficient degree.
As negative as all of the above truly is (yes, Cox is a moron), I'm left holding a lot of GTCB shares that I intend to hold for the present. While Cox et al leave me speechless at thier poor management, with FDA approval, the attendant publicity, and anticipated FOB legislation not more than 18 months out, I retain some speculative belief that a buyout before June is a real possibility.
Again, I continue to see GTCB as more of a speculatory adventure, than a reasonable investment, but I think the advantages of GTCB's technology and pipeline will be seen by some BP with deep pockets as too damned easy a way to make lots of money in 4-5 years, not to simply snap it up before the French have closed their trap.
For some BP to gamble $200 million to buy GTCB, then to devote $100-125 million to get it through the next 4-5 years, then reap multiple billions of dollars in F. VII, VIII, IX; CD-20, etc sales seems a fairly high probability event. These are low risk biologics, with huge markets that would then have 5-7 years before loss of IP patent protection. If I had the money (and I was just talking with a deep-pocketed VC firm), it makes a compelling story -- even more so given the years of failure to get here.
Other than a buyout (with firing Cox at the top of my list of things to do as new owner), I think it damned unlikely a BP will simply throw money towards a partnership deal with GTCB. Given GTCB ridiculously low market cap and the uneven performance of Cox to date, I know I'd be damn hesitant to waste money on providing them limited support, when for a little more, I could just own the whole technology.
If our goats end up swimming from Framingham to France, it would be an embarrassing waste of US ingenuity and talent. Perhaps some legislator will recognize this and help bridge the gap, but I think this very low probably -- more my skepticism over govt, than a comment on the value of GTCB's technology.
At 47 cents, I see the upside as moderately large in the event of a buy out. Given the FDA approval, and more importantly the light it shines on GTCB's pipeline, I don't see GTCB heading anywhere near the low double digits of the end of the year.
Time will tell.
I'd be interested in Rusty's thoughts as well.
I wish all longs well.
Best,
MTB
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