I am terrible at predicting short term movements in stock. I would have agreed with you yesterday that today we would see a floor of $41 and yet in pre market it is trading down almost a buck at $40.65. I really thought we would be up on the news and would have expected over $42 today. For me, short term pricing doesn't matter as I believe long term this is going much higher and have been in it for about 5 years so far.
One thing about the offering that ticks me off a little is that with the extra demand in the offering, why not just price it higher and issue fewer shares? With more demand, couldn't they have just sold it at a higher price?
Our cash position now is fantastic and this dilution won't matter much at all in the future and new all time highs will be coming, just a matter of time.
Any estimates on how much additional revenue will be possible with the BLA label expansion? Logic would tell me that approval should mean a pop but it could also be one of those sell on the news type events, although the eternal optimist in me is expecting it to go higher with approval and exceed its all time high. Personally I wouldn't be surprised to see 60's shortly after approval as long as the overall market doesn't tank. I am also hopeful that we get news before the 8/15 deadline since it seems as if that has been happening more lately.
SGEN is one of those rare biotech stocks IMO that even though the unforeseen can happen, it still seems to me to be cheap with its pipeline and success with Adcentris. The BB's kept buying and now hold a very large chunk of shares and if it is good enough for them, it is good enough for me. I fully expect a buy out in the next 3-5 years at substantially higher prices. If RCPT can be purchased for more than SGEN's current market cap, what is our true potential in 3-5 years? RCPT goes from under $35 to over $30 in a year with its buyout price set at $7.2 billion with no approved drugs? We have an approved drug, how many partnerships, how many ongoing phase 1, 2, and 3 trials and are valued at less?
I have been a believer in SGEN for many years and it represents my single largest investment and I figure some day in the next couple of years if it stays independent that long, it alone could finance my kids education as well as a comfortable retirement, especially since I have most of my shares in Roth IRA accounts. GLTA and let's hope the FDA does the correct thing, and does it early, and expands the use of Adcentris. The other big hope is that the street treats it as good news and not a reason to sell on the news.
A few years from now I feel like the shares I bought today at $31.50 to add to my overweight SGEN portfolio, I will be feeling the same way. My first purchases we not as low as yours, somewhere around $15 but I think this is a screaming buy at these levels. When we get the news this year from the many irons in the fire today's prices will seem like a steal IMO. GLTA and I hope I am right.
I sold some CRIS yesterday at $2.96 and bought SGEN today at 31.50. Looks like I should have waited a few days to sell and buy but I don't measure things in days, I measure them in years, I would imagine like the Bakers do too. There are way too many potential catalysts for SGEN to not feel good about buying at these levels IMO.
Just read the transcript over at Seeking Alpha and it definitely keeps my excited about the short and long term prospects of my SGEN investment. I don't post much since I don't have much to add but I have no doubt the CFO misspoke when he guided to cash of $180 million, he meant $280 million at end of year 2015. They are projecting revenue to increase by $20-30 million from Adcentris sales, royalties to increase another $10 million and they did not project any milestone or new collaboration agreements. In all his projection was revenue forecast of between $260-280 million for 2015 plus new agreements and milestones.
As far as their expense projections, R&D $250-275; SG&A $105-115 then back out non cash of $55-60 million to arrive at net cash expenses of between $300-330, almost forgot to include another $20-25 million for cost of sales. Subtract revenue forecast (excluding new agreements) of between $260-280 million and you have cash burn of between $40 million at the most optimistic and $95 million at worst case but that doesn't include any new agreements and milestone payments. Our burn in 2015 will be minimal and less than it was in 2014 and we will end the year with at least $280 million and probably more IMO.
GLTA and IMO another very solid quarter. These prices won't last long and for those who have shares in a traditional IRA, I strongly recommend converting them to a Roth to take advantage of potential growth in price over the next year and you won't have to pay taxes until April, 2016 on the converted shares and you can always undo it if the price doesn't explode by then. Talk to your tax advisor but it is one of the only ways Roth IRA conversions make any sense IMO.