I'm not terribly comfortable with management, and I will admit that it is a big deal. Short of a felony or two, though, the science and the platform owned by CYTR is the real deal. Like any assessment, weigh out the pros (e.g., science) against the cons (e.g., management) to come to a risk profile and invest accordingly.
Thanks, bjv. I obviously missed this during the Feb 19th interview. My point still stands with regard to changing his tune about partnering VGX-3100.
Sorry if this has been discussed elsewhere, but I wanted to note that yesterday was the first time I heard Kim mention the possibility of partnering off VGX-3100 after phase II results. Previously, his tune was that we would hold on to our "starters" and partner off our "bench." The fact that Kim has changed his tune with regard to VGX-3100 implicates that something has caused him to change his tune. One explanation is that INO now sees VGX-3100 as a "bench" player instead of a "starter," in light of the other oncology products coming down the pipeline including the other HPV indications and hTert. A more likely explanation, in my opinion, is that since Kim's previous statements, big pharma has shown increased interest in INO's tech and has sweetened the offers for partnership with VGX-3100. Nothing changes a business strategy like a fistful of greenbacks.
Tangentially, I also want to note that with all the oncology products coming down the pipeline, I think it is very likely that we will see many more partnerships in the next year, assuming good phase 2 results. Kim said during the presentation that they would be complete manufacturing of their oncology products by the end of this year. What he didn't say was that they they are planning clinical trials shortly thereafter. A biotech with Inovio's balance sheet cannot fund all the clinical trials for all the vaccines they're churning out. The fact that they're plowing ahead with manufacturing the vaccines seems to indicate some degree of confidence that the funding to advance development of those vaccines will be in place. My thoughts are that INO has seen increased interest from big pharmas and are confident they will be able to find partners.
Happy to hear any other thoughts on these matters.
I'm not sure I understand your question. Are you that there are only so many drug manufacturers and that they'll all be busy manufacturing generic dox? If so, I don't think there's any concern about that. I would assume a relatively fixed demand for generic dox, not some spike in dox production.
If you're wondering if generic dox will steal market share away from Aldo, then I also wouldn't worry about that since Aldo has a clear advantage over dox? While it is true that generic dox will be cheaper than Aldo, it seems completely unreasonable for a patient or doctor to prescribe generic dox over a superior treatment for cost purposes (thank you insurance).
I can't think of any other ways to interpret your question.
I also want to mention that the reason many biotechs don't do what INO is doing (i.e., conducting many different clinical trials in parallel) is because it is extremely expensive and not something a start bio can typically do. Grants and partnerships has given INO an edge and has allowed them the ability to accelerate company maturation by preparing to push their products through clinical trials.
(I might also mention that INO can manufacture so many products in parallel because the cost of creating 10 different DNA vaccines is substantially lower than the cost of producing 10 different chemical compounds. Again, an advantage to INO's methodology).
The fact they're spending money on manufacturing is a huge vote of confidence in the their methodology. They're not wasting money, they're moving forward with the confidence that everything works great.
Also, you can't speed up the clinical trials process. It is long and arduous. If they waited to finish phase III before beginning on the rest of their pipeline, they will be delaying their entire pipeline by about three years. If you're going to make 100 turkeys for 100 families, it doesn't make sense to cook the turkeys one at a time. INO is getting 100 ovens and cooking all the turkeys at once. As a shareholder, I absolutely love this. INO is proceeding in a manner that realizes its potential with as quickly as possible.
Let me further complicate this quandary. Last year, Kim mentioned that INO could be a 32 billion dollar company. With the current outstanding shares (around 230 million), that would put the PPS around $140. This year, however, Kim stated that he believed Inovio could be the next Gilead or Amgen. Gilead and Amgen's current market cap are 125B and 93B, respectively, which would put INO's PPS around $543 or $404.
I don't know if Kim is right, but even if he's half wrong...
INO has a patent for needle-less electroporation.
I like your optimism, but I think it's too accelerated. Phase III isn't scheduled to complete until December 2016. We may not have approval until Mid 2018. A lot of things would need to go right for it to reach a "at least 10B" market cap in 2-3 years, including FDA fast track and/or breakthrough designation, a bunch more clinical trials and successes in other indications for aldo, and one or more knockout clinical trials from other drugs in the pipeline.
The chief idiots being the CEO and the co-founder who own 10% and 5%, respectively. I'm sure you'll make plenty of money if you can time it right, but there's no denying there's a compelling long story behind INO. Best of luck to you. As for me and my house, we'll hold my shares averaged under $0.70.
It shouldn't be overlooked that INO's last offering was on March 7th which included 41 million shares (including warrants) for $0.55. This was prior to release of the peer reviewed HIV results (which I would note that they already knew was good) in addition to publication of INO's hTert vaccine (again, which they already knew was in the works) which lead to the run up to $3 in July. One could have argued then, as they can now, that management should wait until after the positive catalysts to raise money.
I cannot comment on whether or not management's strategy is a good or bad. I have neither the expertise or experience to judge them. What I can conclude from INO's prior offering is that the offering was NOT correlated with a degree of success of the positive catalysts as INO already knew the upcoming catalysts would be positive and still performed the dilution. The only reasonable conclusion is that management saw some overriding reason to dilute prior to the catalysts.
It isn't unreasonable, then, come to the conclusion that today's secondary offering is also not correlated with a degree of success of Phase 2. Today's offering is consistent with previous offerings which shows management may be adhering to a known strategy.
With that said, I also think that it's generally silly to assume anything about a double blinded study is known before results are unblinded, much less reading into the results based on a secondary offering. I don't know much, but I know that running a biotech is a lot more complex than many are making it out to be.
I don't find that reason compelling. Assuming phase 2 success, phase 3 money could just as easily be raised with the shelf post phase 2 results at a higher price to minimize dilution. With a cash runway until 2016, there's no reason INO couldn't wait 3+ months to raise money for phase 3. Further, there's enough planning required post phase 3 that they would have plenty of time to do it as well. I don't see phase 3 starting until close to mid-year next year.
Further, leaving open the possibility of phase 2 failure, it doesn't make sense that they would use money from the current offering to prepare for a phase 3 trial that may not happen next.
I will concede that my post is as much a speculation as those who are speculating the money is going to phase 3, but I believe one speculation is more likely than the other. With that said, watch Kim announce tomorrow that they're using the money for phase 3.
Here's my prediction: In Kim's last presentation, he mentioned that by the end of the year, INO's full line of oncology products will be in production. In Kim's latest interview on Seeking Alpha, he mentioned that "the full potential of Inovio's technology 'toolbox' is way beyond the DNA vaccines visible today." My thoughts are the money has something to do with development of additional products.
CYTR is probably appropriately asking for too much in a buyout. It is difficult to command more than a 100% premium on a stock without upsetting big pharma shareholders. A 100% premium at today's prices are a gross undervaluation of CYTR's IP. Selling at those prices would not only upset CYTR shareholders, it is likely to form the basis for a lawsuit against CYTR management. CYTR's IP includes not only Aldo, but other chemotherapeutics based on CYTR's linker technology. We're talking billions of revenue per compound once realized.
CYTR simply isn't at the appropriate price for a buyout. Rather, we're at a point for partnership, which I think would be an appropriate move.
Whoops, sorry Twiz. I basically just posted the same thought. Would've just posted here if I had seen it earlier.
With a cash runway until 2016, there's no reason to raise money now unless there's a reason to raise money now. In other words, one or more unknown catalysts has required INO to raise cash. I'm looking forward to finding out what those catalysts are.
INO is a worthy investment with the goods they already have on the table. It'll be even better once they up the ante. Secondary offerings to increase pipeline are much better than secondary offerings to keep the lights on.
Hard to give credence to predictions based on message board chatter as compared to diligence and research.