Barney, true, but it's all about balancing dilution with value creation. Moore nearly drove the company into bankruptcy because he couldn't create any value and kept diluted at lower prices. When DO came on board he inflicted some significant dilution at similar low prices (largely because of the skewed RSU grab) but fortunately he has redeemed himself by created value since then. I think the point mp is making is that to execute multiple P3 trials will results in significantly more dilution moving forward. There is a balance that needs to be met with dilution and non-dilutive payment. When ADXS strikes a licensing deal similar to Aduro for say HER2 or prostate for +$500 million it will reset our valuation much higher. At a certain point DO needs to monetize a construct. I believe he is working on laying the groundwork now with additional data that will make the terms that much better in a deal. Ultimatley DO plans to sell ADXS for multi-billion dollars. "Going it alone" implies ADXS will always remain independent, which is a completely different business model required significantly more capital expenditure by way of built out manufacturing and distribution staff. I think we will all be happy if DO is able to sell ADXS is a few years for several billion.
Agreed, I think ADXS simply wants to get additional data to command greater $$ in a licensing deal. That is different that going it alone. Also, the fact ADXS already licensing out HPV in India and Asia for less compelling licensing deals shows they aren't going at it alone. The hold-out now is to maximize the monetary terms of deals for the big constructs like prostate and HER2. DNDN tried to go at it alone, look how that ended. Granted, their cost structure was much different, but point being that big pharma has expertise that will benefit ADXS is both running PIII and the subsequent marketing and distribution of the product.
Donjay, agreed. When we were down 75% I was projecting that I may have to work until 75 considering I had invested way too much of my savings in ADXS. It was a horrible feeling, but I didn't sell. I'm finally in positive territory and plan to hold long-term from here. If we're fortunate, we'll be in a good position when others look back at ADXS' chart and think only if I had invested back then… To date I've only been in a position to look in the review mirror at stocks that had huge returns that I didn't participate in. IMO ADXS could be one of those stocks moving forward, and I'm glad we are in early.
Chinaman, nice post. It's hard to comprehend ADXS at $100+ in a couple years, but it could happen. Fortunes are made (and lost) in biotech. What we have going for us currently is 1) a very promising platform with multiple trials that will produce data over the coming year, and 2) an incredibly cheap valuation. I sometime think back to a poster back in 2009/2010 touting Jazz. Back then it was around $1, now look at it. IMO the biggest challenge long-term ADXS will face over the next couple years is maintaining their position rather than taking profits too early.
Thanks for the reminder tx.farmer. Everyone should vote. Very impressive that ADXS is up for more awards than any other company. A lot of upcoming catalysts: VIE award results, Aduro IPO valuation, ASCO data disclosed, start of ADXS/Merck PD1 combo trial, start of ADXS HER2 trial, start of ADXS/Astra PD1 trial, potential vet canine approval, potential India approval with Biocon deal, potential start of lung cancer trial with Asia partner, not to mention any prelim PD1 combo trial data later in the year that results in a big licensing deal with Merck or Astra. ADXS is moving forward at lighting speed to advance the business.
Just thought it was an interesting article. Kraft is one of many holders of Adage, but even more impressive is that Adage was an early investor in Puma (the biotech the article referenced that Adage made $1 billion). I was just look at Puma's chart. About three years ago, Puma was at $13, now it's over $200. Last summer the stock went from around $55 to $275 in three months. Time will what ADXS trades up to. Currently, ADXS is hovering around $11-$14 range as short-term investors make day trades locking in small profits while long-term investors build a position. The trend is positive - since Adage, ADXS shareholder base has grown from 10% institutional to well over 50% now. The stage has been set for a leapfrog in valuation at some point moving forward. Short-term it's hard to see beyond the current trading range, but I think Adage's "all-in" position and looking at some of its past biotech winners gives a potentially very promising long-term picture of ADXS' potential over the next couple years.
Exactly! Of course Mr. Buffett is known to invest only in sectors he fully understands so has shied away from biotech, however, at some point he must have experienced food poisoning and understand how powerful listeria bacteria can be if redirected to fight cancer.
Another article, adding more validation that our largest investor, Adage, is skilled at picking winners.
A Boston-based hedge fund called Adage Capital is a big winner in the Heinz-Kraft mega merger, making $50 million overnight.
On Wednesday morning, Warren Buffett's Berkshire Hathaway and the Brazilian private-equity firm 3G Capital said H.J. Heinz would merge with the publicly traded Kraft Foods to form the third-largest food and beverage company in North America.
Shares of Kraft ripped on Wednesday. The food company's stock was most recently trading up about up $19.68, or 32.1%, to about $81.01 per share.
Adage Capital Management, founded by former Harvard Endowment equity analysts Phill Gross and Robert Atchinson in 2001, is the largest hedge fund shareholder of Kraft. (We wrote about Adage Capital last summer when the fund made close to $1 billion on one biotech stock.)
Adage Capital held 2,565,335 shares of Kraft at the end of the fourth quarter, according to the latest available data compiled by Bloomberg.
The fund had sold 535,700 shares of its Kraft stake in the fourth quarter, ending December 31, the data shows. The position also makes up only 0.4% of the fund's portfolio. (Adage could have traded in or out of the position since that time. Funds need only disclose their long equity holdings 45 days after the end of each quarter.)
Regardless, the stock has been a winner for Adage.
Wednesday morning alone, Adage's stake increased by about $50.4 million. The fund's overall stake now has a market value of $208.04 million, according to our calculations.
Adage has been an investor in Kraft for many years, according to securities filings.
In September 2012, Mondelez International, formerly Kraft Foods, spun off Kraft Foods Group, and the company began trading under the ticker symbol KRFT. Adage has continued to be a shareholder. Since that time, shares of Kraft shares are up more than 78%.
Good move. Hard to tell what the future holds, a $100 pps seems like a ways away, but that would equate to a $3 billion valuation for ADXS and I believe Dan O'Connor truly meant it when he said ADXS could turn out to be bigger than Imclome, which was sold for $6.5 billion. Who knows, but one thing's for sure, those who sell now won't be around to find out.
That could be a conservative estimate. If ADURO is valued at $1.25 billion, the market will narrow the valuation gap between ADXS and Aduro, and a $1 billion market cap on ADXS is approximately a $33 pps.
Thanks Prd, we've been through a lot, eh? Back in the early days, I remember my price target was $0.50 on the OTC, which faded fast when we traded down to $0.02. A $0.50 pre-split price is equivalent to $60 post split. I'm more confident in that price target (and potentially even higher) now than I have been since I first bought ADXS.
Read the posts and the article by The Street today on Aduro's upcoming IPO. Aduro uses a very similar listeria platform as ADXS, yet ADXS' is supposedly more versatile and elicits a stronger immune response, and Aduro has been trying to infringe on ADXS' patents. Aduro is expected to be valued at $1.25 billion. We are seeing growing interest in ADXS because if Aduro's IPO values the company at $1.25 billion, the market will narrow the gap between how undervalued ADXS is versus Aduro. So $1 billion valuation could be in the cards for ADXS over the coming months.
Blue, this could finally turn out to be the "transformational" year we long-term shareholders have been waiting on for three to five years.
Agreed, multiply the pps by 3 based on the current reported valuation to get to around $1b. The only difference I believe is it doesn't include the warrants.
Thanks, very encouraging valuation. Even is we trade up to only 80% of Aduro's valuation/$1 billion valuation for ADXS is approximately $33 on a fully diluted (counting warrants) basis - about 150% higher than were we are now.. Don't get me wrong, longer-term when we strike a deal similar to Aduro's deals with J&J I think ADXS' valuation will be higher than Aduro's because O'Connor has not yet given anything away as Aduro did early on. But for now, if our valuation narrows the gap with Aduro to around the $1 billion mark, I'll be happy.
Agreed, the article was incredibly bullish for ADXS. At the end of it, he comes right out and says the market should narrow the valuation gap (i.e., Aduro is expected to be valued at over $1 billion, and given the similarity of the two companies' platforms ADXS' valuation should move up toward Aduro's as the Aduro IPO provides greater investors awareness to listeria cancer constructs). The author also says the reason Aduro's IPO is expected to be 4x ADXS' current valuation is because Aduro already struck a $1 billion licensing deal with J&J and received around $50 million upfront. He also says while the J&J deals gives Aduro a higher valuation now, ADXS because O'Connor has held off on selling the constructs now should be able to command greater financial terms laters as more data comes out. Aduro on the other hand arguably took less now on two preclinical constructs (lung and prostate) whereas O'Connor is looking for potentially bigger deals by waiting. Awesome article.