Mast Therapeutics, Inc. (MSTX)

[UpstateChris]

I am assuming that it is an honest question, so here are some things to consider:

1) ANX has 3 drugs in trials and can absolutely one day be a rock star. Essentially the identical odds to completely fail. It is a huge risk, with a huge reward potential. That said, there will be no revenue stream for 3+ years. I explained this ad nauseam in a few previous posts.

The company is trading below its net cash position

2) While this statement is true, it is highly misleading. A company that is actually in business and generating revenue that is trading under cash value is one thing...it indicates that the company is clearly worth more and it is likely that will eventually be reflected in share price. That logic does not hold true with an R&D company with 0 revenue stream. ANX is in pure bleed mode. TO fairly determine price you have to calculate the time before they will generate revenue, the amount of revenue they will generate over time and if their current cash on hand will get them there. In the case of ANX, current cash in hand at the average burn rate of the last 3 years will not take them another three years. Therefore, assuming they stay in business, you need to deduct the amount they will go in to debt from the amount of revenue you think they will make.

Insiders have been buying shares lately

3) Uh huh. So a $50K purchase and a $17K purchase, made by millionaires, is somehow significant? I find these purchases almost insulting. If they want to show a firm belief in their future than put some real money on the line.

The company has analyst price target of $1.46 per share

4) Again, as an R&D company, this is almost completely meaningless. I have also seen figures as high as $12. Sure, one day, maybe - but you would have as much accuracy forecasting the weather on an exact date 6 months from now. Literally.


You may entirely disagree with me on all points - but these are the reasons many, especially larger investors, are staying away for now.