Management sure leaked that news was coming.... its clear there was one buyer "in the know" aggressively buying a lot of shares yesterday around 2.85-2.95. You'd think that new management would want to hold themselves to a higher standard.
Jeff, this is straight from CBMX's PR and 10 Q just released.
"We billed 1,106 microarray tests during Q2 2013 compared to 1,031 microarray test billed during the first quarter of 2013."
So yes you are correct that revenues are flat because of collections, but billable tests are what matters and are not subject to revenue collections "problems". Billable tests are based on actual tests performed. These numbers are not growing rapidly enough quarter over quarter to project profitability any time soon.
The SQNM partnership will probably eventually be helpful to CBMX, but even management said it will take time to realize any results from the partnership. The core problem is that this is a New Technology" in an industry that nobody wants to be the first adopter of ... that takes an incredible amount of time and resources to educate doctors to change habits and try the new more expensive test. Longer term, I llke the company, short to intermediate term, they will lose lots of money and need to raise capital yet again. If they wait too long as their capital depletes, then the leverage in the negotiations swings back toward the investors who will get a a sweet-heart deal in acquiring new shares. Meanwhile investors will be diluted in a big way, yet again.
Good point, and Maybe the money will come from present shareholders, as you suggest. But issuing more shares is always dilutive to all existing shareholders. If they issue new shares to existing shareholders, you can pretty much rest assured that the shareholders that provide the new financing will get a "sweet-heart" deal, with warrant coverage at very nice prices - that is the way it is always done with tiny companies in the risky diagnostic space. The new Shareholders gain (by getting a a good deal on new shares) will be existing shareholders loss, so to speak (meaning dilution of value of existing shareholders shares). The Last capital raise just completed diluted shareholders by 40%, that is no small sum. Just pointing it out.
They wont wait till the last possible moment to attain more financing. The real problem is that the pre-natal test isnt ramping fast enough, with just $836,000 in revenues for that test last quarter. And, that number was FLAT quarter over quarter... that is not a great sign, imvho.
THis is a quote directly from CBMX's press release: "Prenatal microarray testing revenues in the second quarter and first half of 2013 were $836,000 and $1.7 million"
The Prenatal test is the ONLY test they have that matters - and there was NO GROWTH Q/O/Q - this is why the stock is dropping... Anyone doing real analysis of the company (not technical analysis of the stock price - can see that the Prenatal test is a NOT GROWING FAST ENOUGH). The rest of their tests are being de-emphasized because CBMX has no competitive advantage in the market place for those other low tech tests that many labs offer.
THey will be forced to raise more capital in 6 months, when their cash position is back down to about $2m, imvho.
I am not short PTX and agree that it is finally may be getting interesting at these levels? but what is a company worth that hasn't made money in quite some time and every product they have acquired or partnered with has performed well below expectations. I think Managements strategy of growth at any cost has been misguided. Slower, but Profitable growth would have been far better for shareholders. Lots of analysts had touted this stock at much higher levels, I think their credibility is blown. Could be worth 1x rev's until they return to profitability, jmvho. But admittedly, thats just a guess.
Still Bleeding way too much cash. Revenues from Pre-natal test were flat this quarter vs last quarter. Stock is in penalty box until revenues ramp hard, or they do yet another financing. Last financing diluted shareholders by about 40%.
If the growth engine is the prenatal test, why was prenatal revenues flat from previous quarter? Bad sign and this is why the stock is dropping, imo. We should be seeing 20% growth Q/o/Q since this is the only test they are focusing all efforts on.
"Prenatal microarray testing revenues in the second quarter and first half of 2013 were $836,000 and $1.7 million, respectively"
Tim, you might be one of the biggest dumbshits ever... Quit commenting about things you dont understand, there is a 90 day lock up for all who participated in the cap raise...
And today we see the shorts have figured it out that they are in a very crowded trade that has positive catalysts and extremely low float... So the covering begins...
FWIW, I do recommend reading the analyst reports which all have targets between $6 - $9... Some have some pretty good analysis of the company and the market potential of the drug...
$10? I think $6 - $8 with positive ph 3 studies - based on some small cap/micro cap comparison valuations... However, given big short interest, and low float, we are very likely to see massive spike when positive data is reported.
Company has said publicly numerous times that data from their two phase 3 studies will be published in Q1 2013 (with an ARX-04 right behind these two). Given that their drug trial (ARX 01) already had very favorable phase 3 data which was data on Sufentanil "head to head" study vs. morphine, it seems likely that their three additional product candidates in clinical development (which is measuring Sufentanil ONLY against a placebo!!!!) - it should look very good by comparison:
All 3 phase 3 studies are based on sufentanil:
ARX-02 for the treatment of cancer breakthrough pain;
ARX-03 for providing mild sedation, anxiety reduction and pain relief for patients undergoing painful procedures in a physician’s office; and
ARX-04, a non-invasive, fast-onset sublingual product for the treatment of moderate-to-severe acute pain.
Plus the recent buyers of the capital raise are locked up for 90 days, and cant sell their shares on good news. The pre-cap raise shareholder base is made up of 70% insiders, who are not selling. So given big short interest, its likely we could see a very nice squeeze, if data is good...
Sentiment: Strong Buy
Shorts have loaded the boat... If phase 3 goes well, will be ugly for them...
Dec 31: Short interest : 1,639,042
Tim, I have been investing successfully in microcaps for a long long time and have lots of contacts in the industry. With all due respect, just because I have done a my due diligence, dont call it a "pump" - as you have no clue about what you are saying.
Now that the deal has closed, both Jeffries and funds that participated can both discuss how much demand for the shares there was - that isnt "insider info". Many funds did NOT get their full allocation. Additionally, given the recent buying activity since the deal closed, it is clear to me that they are in the open mkt making up for the shares they were unable to get on the over- subsubscribed offering.
Funds that couldn't buy the offering are now buying it up in the open market. Low to mid $4's by end of the year, heading to over $5++ when they announce ph 3 trial news, imho
I am a little perturbed at the offering price ? I thought the CEO was smarter than that!
But it appears the company wants to lock in the cash/capital when they can. Who knows if a recession is coming which may have made the capital raising environment more difficult.
One thing is for sure now with all this cash, this company will be around for a long time to come (unless a larger pharma snaps them up!) Ultimately, I think they get sold for $300m-ish. Some more positive data over next few months & a partnership should help us get on our way!
In an instance where they put a PR out to the market, the share price of the offering has already been determined and they already have the buyers commitment. Usually the offering is priced at the last 30 - 60 day average share price, - which should put it in the $3.50 - $4.00 range. If the company has any big pharma investors (which would portend a likely distribution partner), then I think stock moves higher immediately upon the announcement of a completed offering.