Looks like we're headed back to the 6's (or even 5's possibly) in short order. Sucks, but there's nothing anyone can do in the short term. The newly issued shares will be a drag on the SP for at least the next month or so. It's tempting to cost average down, but until new Management (to replace Rabin) comes on Board, it's way too risky. Unfortunately, this company has a long history of over promising and under performing.
In the past, the biggest risk of investing in an early-stage biotech company like ACTC was the clinical risk: could the drug be proven safe and effective? However, as a result of a number embarrassing recalls of drugs already approved the FDA has further increased its scrutiny of new drugs up for approval.
Major consequences of this increased scrutiny are: first, acquiring enough safety and efficacy data to satisfy the FDA has increased the cost of development. Second, there is an increased level of uncertainty as to whether the clinical data that is generated will be enough to satisfy the FDA. This increase in both development costs and regulatory risk has placed an even higher hurdle to new drug approval.
Third for common shareholders the long investment wait of 7 to 10 years for a drug to be move through the clinical trial process can drain the patience of even the most seasoned investor. IMO the great excitement generated by a new biotech initially at the IPO creates a largely inflated PPS. As soon as investors realize the time frame needed for company profit... selling begins and the stock plummets to more reasonable levels.
ACTC using stem cells necessitates even more scrutiny of the trials and as compared to traditional pharmaceutical drugs. The burden of proof has been set to a much higher bar (remember the gene therapy deaths back in 1999) . Investors realizing that they might be paying for research and bloated management salaries and bonuses with dwindling hope of ever realizing a timely return on their investment usually flee as consistent with ACTC’s original PPS of $7 that has dwindled to 7 + cents .
Short term news can lead to bursts of activity but usually the PPS settles down to reality. Of course it doesn’t help if there are lawsuits and dilution mixed into the investment recipe.
" Investors realizing that they might be paying for research and bloated management salaries and bonuses with dwindling hope of ever realizing a timely return on their investment usually flee as consistent with ACTC’s original PPS of $7 that has dwindled to 7 + cents . "
Well stated and all true. I don't see any near term catalyst that keep this from going back to the 5's. Hope I'm wrong, but with current management in place, I wouldn't bet against it! Might add again when it hits new lows. Until then, I think all longs, and that includes myself, are sitting on dead money. Bummed!