Part 1 of 2
After listening to the CC, I am concluding that CRIS is a seller of at least 1.5M shares over the last several weeks. My conclusion is based on the cash numbers reported at the CC.
Here is what we know:
-As of December 31, 2011, Curis' cash, cash equivalents and marketable securities totaled $37.7 million and there were 77.1 million shares of common stock outstanding.
-The Company expects to end 2012 with cash, cash equivalents and marketable securities of $23 to $27 million, excluding royalty revenues that we expect to receive from Genentech on its net sales of Erivedge. This expectation also excludes any future milestone payments from existing or new collaborators that Curis could receive in 2012.
-Curis expects that 2012 research and development expenses will be $16 to $20 million and that general and administrative expenses will be $10 to $12 million.
Committed Equity Financing Facility
So they have a responsiblity to sell shares to an institution for a specific price.
We would all like to have some reason for this downturn. Where would this stock be if no acceptance......50 cents would be my guess.
Looks like support at this level at least.
I have seen this over and over, usually with small, serial diluters, usually not woth companies that have a product on the market. The company contracts with a hedge fund that they can, or may sell up to a certain number of shares over a certain period of time. When the stock price rises, the hedge fund sharts shorting the stock and when they have shorted enough the company makes an announcement that they have "sold shares" under their pre-arranged agreement. The hedge fund takes no risk, they are short then they get freshly minted new shares at a lower price to cover and everyone except the diluted shareholders and the investment banks that employ the sell side analysts are happy. Companies think they are saving money, but they lose interest from the sell siders and investment banks, so in the end I am not sure there is a real savings. The other problem is that every time the stock goes up you come to expect shorting, so I hope there's a cap and end to this shareholder wealth distructive scheme. All IMO based on 20 years of biotech trading.
The gap in announced cash at end of 2012 as compared to my calculated cash numbers is $6M to $8M, which is fully in range of the shares that the company is allowed to sell under their last filing.
good luck -
Got it, they have a CEFF in place, that explains the recent trading and lack of follow through. The hedgie, I assume the Deerfield mob have probably been shorting since it reached $5.5. When you see the announcement if will be a sure sign the worst is over, buy with both hands. Would not be surprised to see a filing tohight, or tomorrow. I have been averaging down, bought my last 1000 at 4.61. I'm in hold mode now until we get a recovery back to at least $5.5+
May have been before your entry on this board, but CRIS has in place a filed form (as of about 6 months ago, I believe) which allows them to sell up to $20M of stock. As of the last set of numbers they had only sold a small portion of those shares.
That's what I keep referring to when I talk about the company selling shares.
good luck -
Ace, just curious, did you happen to include the 10 and 14 million in milestones the company earned last q? Correct me if I'm wrong, but I just listened to the CC again and the second analyst asked about the 10 and 14 million milestone payments Curis earned for the Erivedge submission and approval, whether they were included in the 2011 cash balance. Gray responded that they would hit the books in Q1 2012. I happen to believe that it would'nt make much sense to sell shares here as well, simply based on the fact that they just received 24mil in milestone payments. I also believe dd has a good point with FDA approval.