Stock is up because the drug the drug was approved and news on the pipeline. My opinion we could be higher, but the market is already expecting the company to raise capital by debt, stock, or convertible bonds. Since they have a product they should issue convertible bonds, as it will be a secured loan with an option to exercise into stock at a higher price. We got more news pending that usually send a stock higher, the EU approval, and the EU partner. Now there is an outside chance that the EU partner will make an upfront milestone payment. As for the capital raise I see 50-100 mil (if they move the phase II to phase III it will cost more). If the convertible bonds to be issued with the current stock price, the conversion option would be $25+, thus 100mil would only be 4mil shares @ 25. With EU news and partner, good chance we can hit 30 and the lender will convert at 25, sell the stock and lock in a nice gain. If a convertible bond is not issued I will be disappointed.
I was thinking about the next capital raise and how the rise in the stock price is really going to help them. The stock was around $13 on March 5, 2014 when they decided to refinance and increase their credit facility and now the stock price is 70% higher, so a lot less dilution will be needed to repay this loan. Then on March 15, 2014 they raised $40m selling shares at $11.50 per share, now the same stock offering would raise close to double the amount or $80m and dilution % of the float would be even smaller. Finally I was looking at the mutual fund ownership and per the broker's data, only 25% of the mutual fund shares are owned by actively managed funds, the rest by index funds, and to me that seems low and should increase as OMER market cap increases and they have actual revenues and PEs for the active managers to research..
Ant idea on when the EU approval will be. They mentioned it during the call but just EU approval should be good for a buck or two upside,
Have a great holiday everyone! I have to plan on how to enjoy all the extra funds in my account. I started in the $7 area and it has just tripled my investment. I see $25 by year end if we get positive earnings from Q4 it will nudge up more but the kicker will be earnings from Q1 next year. Holding for another year minimum.
Anything can happen during holiday week trading. I am not a fan of light volume weeks, but the volume for omer is strong. Real test of the stock price will be on Monday, we hold great, if it was to pull back I will just hold for pending news and strength of sales.
my guess is it will sit around the pps 22-23, until we hear of EU approval, and the launch in jan2015. after that, i can easily see this over 30 by qtr1 2015. thats not even considering if we get good trial results on their other pipeline candidates. glta
Sentiment: Strong Buy
yea, I might also splurge and send him a christmas card. maybe include a little something in it, just on todays jump in pps.
Thanks again for the quick 15% tiny. Just paid for my entire XMAS shopping + enough for a vacation for myself. I almost feel like I should give you a cut!
Usually good news in the morning, so tomorrow morning. If not just accumulation, strange to have this kind of volume on this holiday weekend.