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Insmed Incorporated Message Board

  • fudfighter4 fudfighter4 Jul 17, 2013 11:00 AM Flag

    Never forget what Hayden and Lewis have done

    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, with a further $2.2 million due this month.

    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 $51.6 - 61.6 million.

    With this latest offering, cash and equivalent at year end could now be as high as $110 - $120 - including working capital of $89 - $99. Combined dilution is about 44% - and counting.

    By year end 2104 working capital could be as low as $34 million at the current burn rate.

    There may be an honest reason to issue shares before the price was able to reposition to reflect the Phase III success. But sadly my gut feeling is that Hayden and Lewis are guilty of wilful negligence in discharging their responsibilities to act in the best interests of the current shareholders.

    Their indecent haste to issue shares at a 50% discount to the average valuation of the analysts has set us up for a third dilution before Arikace is finally generating revenue.

    A different leadership team would almost certainly have raised the required cash with just a single 19.9% dilution, issuing shares at $30 or greater - instead of the minimum of three dilutions I now fully expect.

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    • Fud,, that is an interesting post. My immediate reaction is that my long term expectations for Insmed are such that I don't expect an extra 2 or 3 million shares to make much of a difference. That said,, there are always the possibility of unforeseen circumstances eroding share values despite what any or all analysts are projecting. For one, the overall market is at an all time high and there is always the possibility of the bull turning into a bear. Although safety now seems assured, the death of an NTM trial patient, or one of the patients in the extension study even rumored to be linked to arikace could really push down share value.

      The phase III results came out, and Lewis and Co. went through the process of getting international experts involved on the conference call. We heard about patients standing in line for arikace, and how likely less than 50% of TOBI patients are compliant in the real world.

      I was hoping for a much higher price to start releasing the shelf shares,, but the market didn't cooperate.....I'm not sure if it is the CEO's job to wait and hope that the market eventually "gets it." JMHO

      • 1 Reply to bohemianclubman
      • Bo - the "market" clearly knew of this offering before July 1.

        In case you were taken in by the excuse fed to us that the "market" was expecting better efficacy, only a retail investor would fail to recognise that the shares were massively undervalued once Arikace succeeded at Phase III. Professional investors know about valuation.

        No undervalued stock becomes even more undervalued with Phase III success without massive manipulation.

    • So what--I had insmd --and sold at $5.50 -- I move on ---isis --halo --incy ---move on --

      Sentiment: Buy

    • fud......... Ha I remember so well. But I think Hayden had already cut a deal or was in discussions with them before Lewis took the reins. I was pi--ed off. Hayden's actions should have been investigated by the SEC. I even wrote the SEC about having that deal shoved down our throats. Nothing happened. Hayden ruined his own name over that one with investors unless of course you were BioV. they loved the rape job and investors paid for it. Any company Hayden ever becomes involved with stay clear. He and the Shark will certaintly sc-ew you.

      • 1 Reply to surestockholmes
      • If you write to them again perhaps they'll view the two offerings in conjunction as being worthy of investigation.

        Clearly the sale of several million shares on July 1 after the Phase III success was announced was aimed at nipping momentum in the bud, and repositioning the price at the lowest level they could achieve for this offering.

        Loads of people must have been involved in this illegal maneuver. If the SEC does investigate I've no doubt one or two will cut a deal for immunity from prosecution - and testify against the ringleaders.

    • I feel the same way about it,but obviously the street knows the potential here or the stock would be down.Shares are strongly desired still,easy double here in the near term future.

      Sentiment: Strong Buy

    • "Their indecent haste to issue shares at a 50% discount to the average valuation of the analysts has set us up for a third dilution before Arikace is finally generating revenue."

      We Common Shareholders are always sheep being led to slaughter, one way or another.
      Furthermore, the *analyst* are/were only here because of the usual masquerade of hoping to get a piece of the Banking/Shelf business, which still has more left, if need be, down the road.
      Having said that, PHIII results were decent and NTM *should* be even better.
      I guess, the participating Insti's have all ready shorted and covered because today's action up is a very, pleasant surprise, all things considered.

      • 1 Reply to dy2ski
      • I think today's price action mainly serves to highlight the ridiculous valuation of this latest offering.

        Hasn't one analyst published a current valuation of $24 a share? How can Lewis and his buddies possibly excuse their decision to value the Company at little more than $10 a share?

        The analyst valuations around the $18 mark were based upon around 8,000 patients using Arikace. This EU Phase III success means that a Cystic Fibrosis patient population of at least 35,000 in the EU will be eligible for Arikace.

        The implications of this success for US approval of Arikace for CF, and for US and EU approval as the sole approved therapy for upwards of 100,000 in the US/EU requiring a therapy for NTM each year are obvious.

        $18 a share is a ridiculously low valuation now that Arikace is all but guaranteed to be approved.

        But apparently still far too high to suit the agenda of Hayden and Lewis.

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