Replies to post #3017 on Stem Inc (STEM)

[Edward]

Do you really think so? The only hope is the last paragraph. But outlook is bleak.

StemCells Inc. STEM, said Tuesday it would wind down the company after it ran out of money for its spinal cord injury mid-stage trial. The stock was halted in pre-market trade, at a value of $3.03. The company said it had about $5.5 million in cash and cash equivalents as of Tuesday but that "it is possible that there will be no liquidating distribution to stockholders." Cash distribution to shareholders will depend on the amount of liquid assets, known and unknown liabilities and the cost of the wind down, the company said. Financial constraints also caused the company to end its phase II spinal cord injury trial because, though the results showed patients treated with its stem cells showed "overall improvement," the improvement wasn't significant enough and the study would likely have missed its primary endpoint, the company said.

A press release signaling the termination of its Phase 2 Pathway study hurt StemCells Inc. (NASDAQ: STEM). The company said that the magnitude and the perceived trend of the effect over time did not justify continuing the study or exploring the variability in the initial patient observations. Here is what really hurts, what all but spells the death of the company’s investors: StemCells will commence an orderly wind down of operations. This might not mean outright implosion ahead for a 100 cents on the dollar loss, but wind downs rarely yield very much for investors. History has shown that it should be expected that the common stock holders may pay the ultimate price here.

As part of this process, the Company will evaluate opportunities to monetize its intellectual property, including data collected in its studies and trade secrets, as well as the transfer of its proprietary HuCNS-SC cells and other assets through a potential sale. The Company will not proceed with its earlier plans to conduct a rights offering, for which it had filed a registration statement with the SEC.As part of the wind down of operations, the Company will conduct a reduction in force impacting all of its remaining full-time employees, consisting of approximately 50 employees, beginning August 1, 2016.