Great article. Here are some key highlights I noticed:
In 2005, ACT completed a reverse merger with a public company and instigated a death-spiral financing strategy that massively diluted the stock. At the time, 22 million outstanding shares were selling for $7 each. Today, it's 1.7 billion shares at 8¢. Having spent upwards of $100 million on research, the company received the okay from the FDA in late 2010 to commence the AMD clinical trials. A few days later the CEO died of a heart attack. Board member and hedge fund manager Gary Rabin took the CEO role and cleaned up the balance sheet, settling lawsuits and swearing off toxic debt. These days he says there's money in the bank, and he's hoping to do a reverse stock split with the aim of being listed on Nasdaq. Even then, success is hardly likely. Shares in almost any public stem cell company can be had for less than $1. One of the highest fliers, Stem Cells Inc. (STEM), reached $171 a share once upon a time. In mid-September it was trading at 95¢.
If the public markets don't come around, Lanza and Rabin have a plan B. "We could choose to go down a path where we take cash from a potential partner," Rabin says. "AMD's toll on the health care system is extremely burdensome because of the aging of the population. So this is one of the great opportunities for large-cap pharma to pursue."
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