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YM BioSciences, Inc. Ordinary S Message Board

  • rfj1862 rfj1862 Feb 10, 2006 6:36 PM Flag

    Today's press release

    $5.5 million burn, $20.3M in the bank.

    According to company, expenditure increases were due primarily to the rapid progression of the tesmilifene phase III trial and the inclusion of costs associated with the development of AeroLef technology.

    Suggests to me burn will go down as the tesmilifene trial wraps up. Costs for the P2 of AeroLef are relatively trivial.

    My conclusion: as Allan has repeatedly stated, YMI has enough cash to get through the end of calendar year 2006. Not sayin� that they are not going to use that shelf, just saying they have sufficient funds for �06.

    Also, could someone please tell me if this is boilerplate?

    [The shelf] ��permits the use of freely traded shares in the case of another acquisition by YM, again significantly reducing the prospective cost of capital."

    Hmm....

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    • 1) Src and IGF-1R are hot targets
      2) Experience in tyrosine kinse inhibitors (nimotuzumab)
      3) I like small-molecule drugs (like Src inhibitors) because they are (generally, not always) cheaper and easier to manufacture
      4) Most importantly, synergies with the current portfolio. Src is hot for GI cancers
      5) Well understood MOAs. Part of the problem with tesmilifene is nobody really knows how it works. Tyrosine kinase inhibitors are relatively simple to understand.

      But mostly because having a Src inhibitor in the portfolio would increase visibility in the community.

    • This is not boilerplate:

      [The shelf] ��permits the use of freely traded shares in the case of another acquisition by YM, again significantly reducing the prospective cost of capital."

      Admittedly, I've only been through 8 or 9 statements, but nothing to this effect appears in any of them.

      J

      • 1 Reply to rfj1862
      • RFJ--put the phrase into the google box and you'll see many hits. Small companies file shelf offerings when market conditions are reasonably favorable and raise money "for general corporate purposes, facilities expansion, acquisitions," etc etc.

        If they raised money when they really needed it (low cash), they'll get hammered on the price or terms.

        If YMI goes out and buys someone right now, it's really going to have to be a good story to not hurt the stock. The acquirer always gets knocked around a bit. Of course, if they pay too much, they get knocked around a whole lot, like Boston Scientific right now, BSX. And if they lose an acquisition in a fight, like JNJ (same Guidant deal that BSX ended up with), then the market thinks they wanted the target for growth and gets worried that they won't do as well without it.

        Any shares sold through the shelf are dilutive. Period. The question is: Has the market already priced the need for extra capital into the share price? If so, we might not get punished. OR Is the acquisition brilliant and a good price? If so, we might not get punished.

        The facts are that YMI is small, will need cash or partners to complete clinical trials and will need cash or partners to manufacture product and launch the product.

        Would I like to see YMI swallow another company right now? No.

        But I invested in this company after quite a bit of research. I trust the management team. They seem to be doing quite well. So if the stock backs up a bit, for any reason, that's just a buying opportunity.

    • We shouldn't read anything into the shelf registration.

      Shelf registrations have a two year time limit so "over the next 25 months" was just stating that fact.

      Shelf registrations such as this are only available to smaller corporations and the phrase "permits the use of freely traded shares in the case of an acquisition" is standard language in SEC and financing rules.

      The shelf registration was necessary. It permits the company to be flexible. They can avoid a 60 or 90 day registration period to:
      1) Take advantage of market conditions
      2) Make an acquisition on more favorable terms (saves time and pleases sellers)

      In my opinion, they just wanted flexibility.

    • John,

      The statement is definitely not boilerplate.
      In fact takeovers using stock typically use unregistered restricted shares that will become
      tradeable only on later time.

    • ....Really nice to see this board with such outstanding new longs and of course the old ones (from time of ownership not age!), holding down the fort and keeping things straight. Been a great week for sure but summer could be the big casino! Going to have a Jack and soda on YMI! Have a great weekend gang..

    • John, I stated long ago that they have plenty of cash.
      I also questioned whether they were eyeballing another acquisition. Because of their current "full plate," one would have to believe that any target would have to be quite compelling...meaning that we should probably take any new target to be a net positive. Aerolef was a brilliant move, I wondered if they have something else in mind?
      Regardless, this management team continues to impress me.