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Heron Therapeutics, Inc. Message Board

  • dbeee2 dbeee2 Sep 10, 2013 4:45 PM Flag

    Investment return

    APPA hit a market cap high of about $270,535,000 assuming approximately 305M shares outstanding and a price of 0.887 on 01/30/2013.

    Now they want to raise another $100,000,000. At todays closing price of 0.36 that would amount to 277777777 new shares or a total of about 582777778 shares.

    Assuming the market is efficient and nothing changes between now and the next PDUFA date, we could expect another similar market cap but this time the peak share price would be about $0.464. In the high stakes game of risky biotech investment that is a paltry return for the time period and the risk involved.

    This is going much lower before they will sell $100,000,000 in new shares. Unless Tang puts more of his money in, I would be very wary. I like this stock at a much lower price. 15 to 20 cents?

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    • Dbeee2
      Where did you read that they plan on raising $100 Million. Don't forget there's also a reverse split occurring soon that will be between 1 for 10 and 1 for 20 shares, which means that at $4 to $8 per share $100 million in additional revenue would require 12 to 25 million new shares. It looks like most of thelarge institutional buyers are staying in the stock. Today's 2 million or so volume is disconcerting, however.

      • 2 Replies to lookingforsoulmate12
      • From their last 10-Q

        "The Company believes that its current cash resources are sufficient to fund its operations into 2014. "

        That isn't very far into the future. The vultures will be looking for a good bargain for their $100,000,000.

      • Read their SEC Form S-3 filed on 8/12/2013

        It may be in the form of common stock, preferred stock, warrants, debt securities etc as they see fit. There is no indication that they have begun. I expect it to happen after the reverse split when they are listed on the Nasdaq again and have more access to capital. Whatever form it comes in it is all dilutive. There is the question as to whether it is priced into the current share price. I don't think so.

        I believe they will eventually get approval with a slow launch to capture part of the market. I just think the current valuation is unjustified.