My reading of the situation is that they will look at it every quarter, but there is no chance in hell they will restart it until the debt is under control and oil prices as well as NG prices recover and stabilize to support the distribution as the hedges roll off. In fact, they may devote the next 3 or 4 years to using the cash to buy back debt at a discount over time, make other decisions/investments that will improve ongoing cash flow and fill the gap caused by hedges rolling off the books.
I bought some today and plan to now wait for a quarter or two and see where things stand. I think they are making all the right moves, but they don't control the price of oil. So, it's really a play on guessing whether the price of oil will be where it needs to be in 2017 when they are unhedged. I think it will be higher because of all the capital spending cuts, higher demand, and the need of so many countries for higher prices (e.g. Russia, Iran, Libya, etc.) who will create mischief, if that's what it takes to get prices back up where they can survive.
Every stock that drops this much in one day attracts the same cadre of ambulance chasing attorneys hoping to shake the company down for a "go away fee." It will likely start tomorrow morning, but it's a bunch of silliness really. My hope for my LINE stake, however, is that they can pursue all the available avenues to get their debt burden addressed and a level of sustainable cash flow to restart a meaningful distribution. In all honesty though, I don't think it will happen until oil prices return because they are fighting such an uphill battle with hedges falling off each year.
People own stocks for different reasons and LINE was definitely an attraction for income seekers. Without the monthly check, the appeal is lost on many. Also, I doubt most retail investors understand the business or how to form an opinion on whether there can possibly be a good outcome without a major upswing in oil and NG prices soon. Certainly, the press release always reads ugly, even when the results to day were quite favorable, except the need to suspend the distribution.
I too was favorably surprised with the actual results re: cash and bond buybacks at 35% discount as well as cost reductions. I wish they didn't need to cut the distribution, but they do and it's the right thing to do, so I bought some more at $5.20 this morning. May not work out, but I think the stock should be going up after the dust settles re: the distribution and people come to realize the underlying business is more valuable now.
Impressive $71M cash surplus and nice production growth and, as much as I will miss the monthly distribution for a while, they are doing the right thing cutting it. They are pulling out all the stops to address their debt to avoid being a slow moving train wreck just praying oil prices return strong before their hedges run out and their debt comes due. Will be interesting to see what they say on the call about where this will all leave them when the dust settles. I am still of the mind that there are many others who have hedges expiring before LINE who may become great opportunities for adding production at bargain basement prices as well.
Recent stock performance aside, they are laying the foundation for the future working with the best researchers at marquis institutions and publishing in the premier journals. It's only a matter of when, not if, that we enjoy a nice ride much, much higher.
Surprised the covering hasn't helped the stock recover a bit, but perhaps it slowed the decline. With all the positive data and an upcoming conference call where we know the financial guidance (year-end cash balance and NOL) will be materially upgraded, I wouldn't want to be short. And, there will be continued milestone announcements during the year. Still, what the stock does for the next year or two until they get a meaningful product on the market is anybody's guess, but it will soar when they do. I am banking on it moving higher in the meantime.
Doubt management interested in $85 today when I suspect they feel they can get $200 or $300, if not more, by getting some of these products to market over the next two to four years. But, if they were to get bought out today, it would be a smaller player, like GILD, rather than one of the majors knowing that it won't add to their near-term financial performance, but at least the milestone payments seem to cover the cash flow. A big pharma would rather pay more later and get an immediate financial impact.
FYI, in the past couple of weeks, a board member purchased 500,000 shares at $35.33 and R. Kinder picked up another 100,000 as well.
Likely too early. They buy for financial and/or strategic reasons. There would be no financial reason to buy now because there are no drugs on the market driving sales/profit. That said, I could see a strategic interest given the wide range of potential applications for the core technology (assuming the IP is valuable). Still, I think we are a couple of year away before a major would be an interested buyer of ISIS and the stock in the meantime is at the whims of the market, though one would think with a bias to move higher as news comes out over time.
Yes, this is certainly a huge opportunity, even larger in Europe (600M+ people). What I want to learn more about is "just how well linked is elevated Lp(a) to the development of cardiovascular disease and, most importantly, has it been definitively shown that reducing Lp(a) levels reduces the development of future cardiovascular disease." I am assuming the answers to both of these questions are "yes", or will be demonstrated by product launch, and, if so, it's going to be a blockbuster recommended by the American Heart Association in short order (which would also be the ideal forum for presenting the data near year-end as it is usually in mid-November, if the data is ready).
Thanks. Very helpful update. Do you know what the milestone criteria is for this $2.15M? I presume they have a completed a certain number of the 120 patients, but don't know. Also, an early FDA decision would require unblinding the data. I wonder if this is in their plans or not? If I recall, you can unblind data, but you may have to penalize yourself on the p-value then required to show statistical significance.
Besides having bad data, you are missing the point. Perhaps there are only 10K patients in the U.S., Europe and Japan for these applications of the technology and the $100M or so in revenue isn't substantial, but the point is that these applications further validate the technology that has application in huge applications elsewhere. Your Harvoni is in the SMA application, the Bayer deal for clotting, diabetes, Hep C and obesity applications, just to name a few.
When all the news is good (SMA data, Bayer deal, orphan drug status, etc.) and the stock declines, it's frustrating, but just means you are getting an even better deal. The data seems to have eliminated the technology risk at this point and the partnerships would seem to have nearly done the same for the market risks. This stock will be $300 to $600 in the next 3 to 5 years IMO, unless it is bought out in the interim.
Seems to me that many or most of the others who depend on hedges are losing their protection much sooner than LINE and could become good pickings for some attractively priced asset additions for LINE as 2015 comes to a close and into 2016. They need to avoid people just watching the hedge clock tick and hoping for higher oil prices.
I thought he was only talking about the 2015 guidance for NOL and year-end cash balance. He said they would be updated with the q2 release and that they would be much better than the original guidance of $50M NOL and $630M cash. I didn't understand him to say anything about numbers on the Bayer deal itself. But, having lots of experience in a wide range of major surgical procedures where bleeding and anticoagulation is an issue, the opportunity is enormous which is why Bayer is investing such a huge sum. And, I thought Dr. Crooke sounded very certain when he said "we know it works."
The SMA opportunity is exciting, but the magnitude of the Bayer opportunity is particularly impressive. The bleeding caused by anticoagulation during major surgeries (orthopedic, cardiovascular, etc.) forces surgeons to demand lower pressures to enhance visibility in the surgical field. If you can maintain pressure without added bleeding, you should not only avoid the direct issues associated with current anticoagulants, but you should get better overall outcomes related to inadequate blood flow and oxygenation to the vital organs which should show up is lesser adverse events and shorter length of ICU and hospital stay.
You apparently have an axe to grind (former employee?). The truth is that insiders should sell stock when their holdings advance to diversify their investments. Also, if they are options or restricted stock, they have a limit when they have no choice other than to convert and sell. Regardless of how long it has taken this company to get to where it is, they are still early to mid-stage in development and having been in this industry all of my life, I am confident they have a home run. It may take another year or two before they get to a true inflection point where they have products producing profits, but I am willing to be patient and trade around my core position. IMO, this will be a several hundred dollar stock in the future and how it performs in the near-term is anybody's guess, but it's undervalued on the metrics.