Did Arikace FAIL Phase III by any chance?
"On July 16, 2013, Insmed, Inc. (the "Company") entered into an Underwriting Agreement (the "Underwriting Agreement") with Leerink Swann LLC as representative of the underwriters named in Schedule I thereto (the "Underwriters"), relating to the issuance and sale of 6,000,000 shares (the "Shares") of the Company's common stock, par value $0.01 per share (the "Offering"). The price to the public is $10.40 per share and the Underwriters have agreed to purchase the Shares pursuant to the Underwriting Agreement at a price of $9.776 per share. In addition, the Company has granted the Underwriters an option exercisable for 30 days from the date of the Underwriting Agreement to purchase up to an additional 900,000 shares of the Company's common stock."
"Net proceeds to Insmed from this offering are expected to be approximately $58 million"
"The number of shares of our common stock to be outstanding after this offering is based on 32,033,960 actual shares of our common stock outstanding as of July 12, 2013 ..."
To put this in perspective, here are the valuations of five analysts BEFORE the news was released that Arikace had been successful at Phase III -
$17.00 - Canaccord Genuity
$17.50 - UBS
$18.00 - Wedbush
$21.00 - Lazard
$22.00 - Leerink Swann
I can only remember one valuation AFTER confirmation of Phase III success -
$9.776 - Insmed.
If, as seems likely, this offer is fully suscribed Hayden and Lewis will have diluted us by 21.54% at $9.776 - to add to the 20%-plus toxic dilution nine months ago at $4.07.
Where is the outrage guys? Why is their valuation so far below the valuations of those five analysts?
Insmed raised $25.6 million last October just after Hayden brought Lewis in, via an offering priced at $4.07.
One of the beneficiaries of that maximum toxic dilution they could push through without seeking our approval was Quaker Bioventures, a pre-merger Transave stockholder.
Those institutions got an incredible bargain. We got a massive 20% dilution - in exchange for an amount of cash so small as to be practically meaningless. By the end of THIS year it still wouldn't have been tapped, according to the Company guidance.
The Company reported cash and equivalent as of March 31 of $81.6 million - including working capital of $60.6 million.
That was augmented in May by a further $11.5 million. A $2.2 million certificate of deposit was due to convert to cash in July.
Guidance for full-year cash requirement was $45 - $55 million (including $11.3 already used in Q1) - with available cash anticipated as sufficient to fund operations into 2014.
Cash and equivalent at year-end was expected to be in the range of $49.4 - 59.4 million.
Now - "If the underwriters exercise their over-allotment option in full, we estimate that the net proceeds from this offering will be approximately $66,954,400 million."
Cash and equivalent expected at year end translates to $116.4 - $126.4 million.
Cash and equivalent expected at year end 2014 at the current burn rate would be $61.4 - $81.4 million.
Working capital at year end 2014 presumably translates to $42.6 - $62.6 million.
But the burn rate may increase as the Company beefs up for commercialisation.
Can anybody here see how the decision to value the Company for this latest offering at 51% of the average analyst valuation BEFORE the Phase III results has not condemned us to a third dilution some time next year?
Why have this offering before the share price had a chance to reposition to reflect analyst valuations with Phase III success?
And why should we expect a valuation any higher than $15 a share for next year's offering?
Your last post says it all. Your business acumen is primitive. You are paid to post all day etc. Do us all a favor and find real meaningful work. Your efforts on this mb are no better than Terry and his crew.
Btw - I suggested a ceiling of $15 a share for next year's offer because when the share price hits $15, the entities who bought shares in the current offering will be able to exit with a 50% profit on the transaction.
If they do, you get no prizes for guessing what will happen to the share price. Perhaps a prediction of $15 a share is unrealistic optimism?