Replies to post #220730 on Biotech Values

[DewDiligence]

ADXS addendum: The new CEO gets a sizable bonus for raising ≥$20M in capital.

[Bourbon_on_my_cornflakes]

Cash balance calc is too high

"ADXS’ new cash balance is ~$59.2M, based on $40.4M cash on hand at 7/31/18 and $18.8M* net proceeds from the offering.

unless everyone worked for free last month

[robtewms]

Good DD. Seems like a good deal to buy 100 shares and get 85 warrants that can be exercised immediately at $1.50.

[pastemp]

I saw BK coming on this one a while ago.

[DewDiligence]

ADXS—FY3Q18* cash burn down sharply compared to prior quarters:

https://finance.yahoo.com/news/advaxis-announces-pricing-public-offering-132500354.html

The net loss for the third quarter ended July 31, 2018 was $14.0 million or $0.27 per share. This compares with a net loss for the third quarter of fiscal year 2017 of $32.6 million or $0.80 per share. The $18.6 million reduction in the net loss compared to prior year was primarily a result of the significant reduction in spending in research, development and administrative areas.

Research and development expenses for the third quarter of fiscal year 2018 were $10.8 million, compared with $17.8 million for the third quarter of fiscal year 2017. The decrease is primarily attributable to a decrease in laboratory costs, drug manufacturing process validation and drug stability studies supporting the MAA, which we withdrew in July 2018.

General and administrative expenses for the third quarter of fiscal year 2018 were $4.5 million, compared with $18.0 million for the third quarter of fiscal year 2017. The decrease is primarily attributable to a decrease in stock-based compensation of approximately $11.4 million related to the resignation of the Company’s Chief Financial Officer and Chief Executive Officer in April 2018 and July 2017, respectively, two Board members who did not seek re-election in March 2018, a reduction in headcount and the elimination of stock-based compensation paid to consultants.

This belt-tightening should have started much sooner, of course.

As previously reported, the 7/31/18 actual cash balance was $40.4M; the 7/31/18 pro forma cash balance taking into account the public offering announced last week is $59.2M (#msg-143423885).

*Period ending 7/31/18.

[DewDiligence]

ADXS 10/31/18* pro forma cash=$38.6M. This figure consists of the current assets less current liabilities on the 10/31/18 balance sheet (https://www.sec.gov/Archives/edgar/data/1100397/000149315219000489/form10k.htm#f_002 ) after ignoring the “Deferred revenue” and “Common stock warrant liability” lines, which are accounting artifacts rather than true liabilities.

Assuming a $50M annualized cash burn as per the company's guidance in its 1/10/19 PR (https://finance.yahoo.com/news/advaxis-reports-fiscal-2018-financial-210500973.html ), the cash burn since 10/31/18 has been about $10M, and hence the pro forma cash as of today is approximately $29M.

*End of fiscal year 2018.

[DewDiligence]

ADXS 10/31/18 fully-diluted† share count=89.2M. This figure consists of: 69.6M common shares on the 10/31/18 balance sheet (https://www.sec.gov/Archives/edgar/data/1100397/000149315219000489/form10k.htm#f_002 ); and 19.6M warrants, options, and unvested restricted stock (ibid, page F-11).

†My calculation of the fully-diluted share count is not based on the treasury method. Rather, I simply convert all derivatives into common shares; this method is intentionally conservative but somewhat unrealistic insofar as the exercise prices of most options and warrants are far out-of-the-money.