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Apollo Education Group, Inc. Message Board

jimmypiersal 195 posts  |  Last Activity: Jan 22, 2015 8:32 PM Member since: Mar 21, 2011
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  • This was a nice format, fireside-type discussion with Chip and Piper analyst:

    -Four sources of value creation for 2014:

    1. Profound activity of the drug at the end of 2013
    2. Off of clinical hold - based on strong data presented to FDA
    3. Janssen partnership
    4. Transfer of IND from Mayo Clinic to Geron

    It was apparent in the discussion that Janssen pursued Geron. Janssen sees the drug as transformational and while other companies and PI's showed strong interest, it was clear that Janssen sees the potential. Janssen has an oncology group that is 10x the size of Geron - so 450 cancer scientists and doctors waiting to get underneath the covers here. Overall the sheer power of Janssen with 35k people, a substantial presence in key malignancies and a strong hematology and oncology presence make them the perfect partner.

    THESE TWO THINGS ARE IMPORTANT:

    - Both sides were surprised they could move forward on the basis of 22 people in the study, based on such a small data set. "Janssen is VERY, VERY positive about the data." My read: Everyone is so shocked by the results - complete remission, partial remission and clinical improvements - they believe they have found a cure for cancer.

    - The first part of the deal is for $35m, and Chip added, "and a continuation, part of the up front payment, will take it into triple digits." I had not heard that before, thinking that after the $35m they wouldn't see the next big payment until mid-2015 when the next trial is targeted to begin. Sounds like this other $65m comes sooner.

    FINALLY:

    Chip was encouraging about the 2 presentations and 3 papers being presented at ASH. Earlier in the talk he mentioned that Dr. Tefferi would be making an MDS presentation at an as-yet-to-be-determined medical conference in 2015. He seemed to allude to something more in that.
    _____

    From an investment standpoint I think this is a two to three year hold with a substantial upside.

    Sentiment: Strong Buy

  • THE NEED TO DISCOVER, IMPROVE, AND ADVANCE
    The results of a Mayo Clinic study demonstrate that
    a drug named imetelstat induces remissions in some
    patients with myelofibrosis. This is a form of chronic
    leukemia that affects the patient’s bone marrow
    that is replaced by fibrosis (scar tissue) instead
    of blood-producing cells.
    Scientists do not yet know the exact mechanism of
    action for imetelstat, but believe it interferes with the
    survival and proliferation of cancer cells by inhibiting
    a critical enzyme called telomerase. One of the functions
    of telomerase is to repair the ends of chromosomes
    called telomeres, and because cancer cells have shorter
    than normal telomere size, they are particularly susceptible
    to the drug.

    The study results are promising. Some patients
    participating in the clinical trial taking imetelstat obtained
    dramatic responses, and we have seen some complete
    responses (tantamount to a cure), which is almost
    unheard of in this disease.

    Although patients may experience relief in response
    to other treatments, their bone marrow does not
    usually return to normal. But in the case of this new
    therapy, some of the patients participating in the trial
    developed normal bone marrow.
    Researchers studied imetelstat in 33 patients at
    Mayo Clinic and have now followed the first 22 patients
    for more than six months. Among these 22 patients,
    two achieved complete remissions and three partial
    remission, including reversal of bone marrow fibrosis
    in four of the five patients.

    Sentiment: Strong Buy

  • jimmypiersal jimmypiersal Dec 9, 2014 12:08 AM Flag

    Sdraw, excellent post. Thanks

    Sentiment: Strong Buy

  • -11/6 - ASH abstracts to be published on line
    -11/19 - Stiffel Health Care Conference - Geron presenting an update on imetelstat
    12/6-9 - ASH annual conference

  • Reply to

    I hate to say it - But

    by dhudson100 Dec 30, 2014 4:22 PM
    jimmypiersal jimmypiersal Dec 30, 2014 10:45 PM Flag

    But giving them cash is not the answer. They'll take the money and run. Give them stock at .36 - let them work to bring the company back. If they're that good they'll help the company stabilize, get the stock back to $10 and they'll all be multimillionaires. Anything else is unacceptable.

  • Ha! What a deal for Geron. Hold lifted, J&J will invest $1b, Geron will get 20% of all future sales and tens of thousands of lives will be saved.

    Sentiment: Strong Buy

  • Being a newbie to this field and a long time casual follower of GERN a few thoughts and questions have bubbled up, I'll put them down and invite yours in return:

    1. From last Nov to March the price of the stock hovered around $4.50 and then with the hold it tanked. Now with the hold off and the FDA obviously impressed by the results of Imetelstat the price should be HIGHER than March for the simple reason the government has seen what Imetelstat is capable of. Let's say it should be at $6 with the hold off

    2. Given that the price should be around $6 based on the hold coming off, now with Janssen, the pharmaceutical company of J&J, buying in quite strongly it would seem that ALONE should have propelled GERN up to $9. $35m upfront, $900m if Imetelstat perform over the trials, and up to low 20's% royalties on future sales is a strong commitment to GERN if everything works. The J&J partnership says they have knowledge about what Imetelstat is capable of and the fact they are taking over in such a strong way is an obvious commitment to get to the marketplace.

    3. As additional results of Imetelstat's capabilities come out, such as through more detailed presentations like ASH, GERN stock would seem likely to advance further, say to around $12.

    4. Given those thoughts above, why hasn't it responded financially?

    a. Is it a slow build and will just keep improving, but not have the explosiveness associated with other bio breakthroughs?
    b. Is it shorts working with marketmakers to make an orderly retreat?
    c. Does the marketplace not believe what is occurring or not consider it significant enough - yet?
    d. Would you recommend continued adding to a position here or wait till next year and more study data?

    Thanks.

  • Looking at the report released tonight for the month of November they had only $2m in revenue, vs $10m for cost of revenue and $18m in operating expenses. Of the $18m in operating expenses, $11m were for restructuring charges. The balance sheet is a mess, but they do have $95m in cash on hand which should hold them for a couple of months.

    The problem for shareholders is how bad do they want things to seem. For example, if they have the ability to bring orders in from sales of solar equipment, which they were forecasting would occur in the 4th quarter, will they? Is it now becoming in "their" best interest to make things seems as dire as possible to get equity wiped out, get new financing in place with DIP and allow the DIP to become the overriding owner of the business, subordinating all other debt and equity to DIP.

    Management has been telling us lately they are focused on DIP. We are no longer hearing they are seeking to keep shareholders whole. This makes sense, from the standpoint if you get DIP, the lenders now have control over the company and its debt and equity. Reading up on DIP as a strategy, many firms are now engaged in distressed financing as a risk strategy. GTAT fits this concept perfectly - you take a company that has huge potential, lots of Intellectual Capital and a recovering business just ahead and you wipe out current equity and issue new equity that gives you an enormous return very quickly. And the courts support this. It is a form of robbery, but unless management comes up with a new strategy or new investors that will leave GTAT shareholders whole, it may be over.

  • Every part of the numbers look bad. Y to Y comparisons:
    - Cash dropped by $80m, receivables are up by $30m.
    - Revenue and cost of revenue - if they kept the same gross margin their revenue would have been $116m - so they gave away $25m to gain market share.
    - If you look at the geographies generating revenue - of the $90m - $64m are Korea and the US. China - for all we're hearing about China - it went from $6m to $12m! So essentially Apple and Samsung. Just great - Samsung's profits shrunk by 60% - think they'll be looking for lower prices? And Apple - the US revenue went from $8m to $29m. We saw what kind of customer Apple is with the GTAT debacle.
    - $13m profit last Sept, $7m loss this Sept.
    - Cash provided by Operations - $16m last Sept, minus $2.7m this year.
    - Cash last Sept - $118m; this Sept $38m.
    - There are 7m stock options expected to vest, vs about 1.5m last year.
    - Assets went up by $66m, and liabilities went up by $51m - however goodwill went up by $90m. So sans goodwill assets dropped by $24m while liabilities continued rising to $51m.

    These might be "exciting times" for Abdi, but they are not exciting times for INVN stockholders. Just awful financial results. Maybe sometime in the future this turns around, but not anytime soon. AND this was the quarter Abdi pointed to.

  • jimmypiersal by jimmypiersal Nov 4, 2014 12:43 AM Flag

    Would not be surprised if what's going on now looks like this:
    November::
    -Judge is not at all pleased with seeing Apple bait a business on the edge as solar stalled. Apple wants to order 2000 furnaces from GTAT. There's dancing in the streets in Salem, NH. Apple switches and says - you make the furnaces, we'll loan you the money and here's our contracts you must abide by. GTAT strapped to stay alive buys in.
    -Judge reads about all the specification switches by Apple, by them not agreeing to have back up power and now he wants to see when Apple contracted with Corning for GG for iphone 6's and when they told GTAT.
    -Judge sees the agreement that Apple signed off on so quickly with GTAT, essentially letting them off the hook for $450m owed.
    -Judge talks with Apple attorneys and tells them their actions and behavior did this to GTAT and that he thinks Apple owes GTAT more. Make them whole he tells the attorneys.
    -Apple comes back and agrees to pay all creditors involved in sapphire and agrees to pay off the second bond.
    December:
    -Everyone agrees
    -GTAT exits bankruptcy
    -GTAT resumes trading on NASDAQ without the scarlet Q
    -First orders for Merlon are announced. Financial confirmation is received on previously announced order in the middle east.
    -GTAT exits 2014 with a backlog of $800m for 2015
    -Guiterrez and Squiller retire. Chairman Matt Massengill assumes CEO role until Dave Keck can move back from China to take over

  • -Good presentation coming up tomorrow at Stiffel
    -Even for a layman it states there are major breakthroughs occurring that are curing patients using Imetelstat
    -Even better is that at the ASH meeting the are presenting data on triple the number reported in the Stiffel presentation.

    Sentiment: Strong Buy

  • -Dr. Tefferi will continue making breakthroughs with his commitment to a cure for cancer
    -Janssen is going to drive the science through to product approval
    -Lives are going to be saved
    -FDA will approve Imetelstat
    -Shorts are going to have to buy back
    -GERN is going to rise

    Sentiment: Strong Buy

  • Read excerpts of the full Squiller memo. Incredibly bad deal for GTAT the way it played out - not in concept, since there is stated and implied mutuality, but in reality.

    -Apple was in fact acting as a joint employer by giving direction and supervision to GTAT employees, despite being told not to.
    -Apple, it can be seen clearly, was using GTAT as an R&D experiment for the development of sapphire
    -Apple changed specifications and when GTAT was carrying them out, changed back again
    -Apple implied they would buy the sapphire and at the same time in the contract said they had no obligation to - where is the mutuality?
    -Apple wanted an R&D facitlity - it bought the place, intended to buy the furnaces and make its own sapphire, developed a cache of IP for sapphire and yet was conflicted on what this whole endeavor was all about.
    -Apple at some point went to Corning and ordered Gorilla Glass enhanced with IONs - did they do this while still working with GTAT in the production of sapphire, and causing GTAT to continue to incur millions of dollars in cost?

    You could go on for hours I imagine over this. While GTAT may be willing to settle with Apple and then deal with the rest of us, they should be suing Apple for all they are worth. It is clear that Apple had something else going on here. This was not a partnership - no partnership works like that.

  • Go to their web site, under Financial info, SEC filings, under the filing today and you can see the entire power point. It would not let me paste. Very powerful presentation - newly updated data on remission rates and numbers.

    One powerful point: "unmet medical need" in AML

    Sentiment: Strong Buy

  • Information coming out in the Squiller Memorandum suggests that Apple "controlled" every aspect of the GTAT enterprise in Mesa, essentially making them joint employers and "partners" in the venture.

    -In labor law when one company exercises control over another companies employees in regard to wages, hours and working conditions they are usually found to be joint employers. Much of what we are reading suggests that Apple exercised "extreme" control over everything, people included, and essentially squeezed Mesa and GTAT so hard that all 700 mfgr employees lost their postions. Squiller's memo also says they dominated engineers time, and an earlier Statement of Work, introduced to the court, for the whole project is not a statement of work for what GTAT is expected to do to perform the contract, so that it, GTAT exercises its management prerogatives over its employees; the statement of work is another controlling document directing GTAT's attention to a myriad of sub statement and other contracts.

    -As creditors, bondholders, and stockholders seek to recover moneys due and company ownership, Apple should be held as a joint owner of GTAT since they knew every aspect of the dire straights GTAT was in when GTAT signed on to produce sapphire, they exercised near total control of GTAT even beyond Mesa during the year plus effort and they gave and made GTAT use Apple's equipment beyond the furnaces.

    As shareholders, you do not want this Apple/GTAT agreement agreed to by the court until all your issues are ALSO resolved. If a judge accepts what Apple and GTAT have drawn up you may be left with no recourse.

    Apple should be on the hook for the role it played in signing up GTAT and then micro managing almost every aspect of what GTAT did, ultimately deciding, no, they did not want to buy the product they jointly made. In the meantime it was that relationship between the two companies that was heralded publicly that encouraged tens of thousands of individuals to invest.

  • -Look at the attached chart - GTAT at about $3.20 in Feb 2013, goes to about $9.13 on Oct 21, 2013. Deal with Apple announced in the next week. In early Nov 2013 the stock goes up to $10+ and by Mar 2014 it's at $19.
    http://finance.yahoo.com/echarts s=GTAT+Basic+Tech.+Analysis#%7B%22range%22%3A%222y%22%2C%22scale%22%3A%22linear%22%7D

    -Wouldn't you like to see a list of buyers of GTAT stock from Jan 2013 to Nov 2013? So doesn't the SEC which is looking at trades in GTAT from January 1, 2013 forward.

    -And on the short side, what would give shorts so much confidence that they would short up to 40%+ knowing that GTAT had such a large contract with Apple?

    -And on the day the new iphone was announced, and it was not yet public that GTAT did not have its sapphire in the iphone, why was the CEO of Corning on CNBC looking and answering glibly about what the covers of the new iphone were made of?

    -And what led Squiller and Guitterez to establish GTAT automatic sales of stock beginning in March of 2014? Were they aware that early that in 6 months GTAT sapphire would not be in the iphone?

    This is starting to feel like Watergate. Each page that is turned over provides more information and more questions.

  • Look at the GTAT investor relations presentation on their web site dated Aug 26 - it shows $333m in sapphire backlog. Thirteen days later on Sep 9th Apple announced iphone6 with no sapphire. I do not believe GTAT was not notified earlier that GTAT did not have sapphire in iphone6. If it is true, then Apple must be liable for millions of GTAT expense since they obviously contracted with Corning more than 2 weeks before the announcement date. Corning was sitting in CNBC studios on Sep 9th gloating about the iphone6. Something is really wrong with this picture.

  • Reply to

    PCYC signed the same kind of deal with J&J in 2011

    by avlktsvra Nov 14, 2014 12:50 PM
    jimmypiersal jimmypiersal Nov 14, 2014 2:44 PM Flag

    "GERN gave away everything for nominal fee"

    Sure, $1b and 20% of all future sales. Some giveaway and a cure for cancer.

    Sentiment: Strong Buy

  • -From 11/5/13 to 3/10/14 the average price of GERN was $4.50 as information about the Mayo studies began coming out, after 3/10/14 when the FDA hold was put on, the stock plunged mostly hanging in the $2.50 area.

    -Short Interest prior to 3/10/14 was not above 13.6m; since 3/10/14 short interest has doubled reaching 27.7m on 11/14/14

    -On Nov 3 the FDA lifted its hold based on strong data presented by Geron - the stock traded 30m shares and rose from $2.23 to $2.80

    -On Nov 14 Geron and Janssen announced a partnership worth up to $900m + 20% of future sales - the stock traded 31m shares and went from $2.36 to $2.98. (Interestingly by the 14th the stock had lost most of its pop from the FDA announcement but none of its shorts.)

    -So - now GERN sits at $3.50, about $1 over its average after the hold and about $1 under its average before the hold. Yet the news is much better - the FDA sees the worth of Imetelstat (with concern) and there is a lucrative partnership with Janssen. So why hasn't it risen above the previous $4.50 average? Here's what I think:

    1. The shorts, 28m of them, knowing the ups and downs of this industry, figure they have time.
    ...a. Time to see if this is all pie in the sky, like so many other "cures."
    ...b. Time before any more significant news comes out.
    ...c. Time before the next studies begin
    ...d. Time before the product is on the market, overcoming hurdles 80% of new drugs fail.

    2. I doubt the shorts have the time they think and a squeeze will begin as the price of GERN rises based on what occurred in November.

    3. I think investors will continue buying as the company and Janssen get the message out about these points:
    ...a. Mayo Clinic's statements that Imetelstat's results from the initial study is "tantamount to a cure" for this cancer.
    ...b. The Janssen partnership commitment
    ...c. Geron's singular focus on Imetelstat.
    ...d. Lives that are being saved by Imetelstat.
    ...e. Announcements of additional studies/findings.

    Sentiment: Strong Buy

  • In looking at the court documents, a group of shareholders has done a very good job of putting together a detailed petition of why an equity committee is needed to represent GTAT shareholders. You can see it in the court documents. The prospects for GTAT are actually quite good for 2015 by their own estimates. So if you have a sizable investment in GTAT you may want to make a trip to Springfield that day.

    You can view the petition by going to "kccllc.net", search "GT Advanced", go to "court documents", then at the top of that page click "search documents" and type in "equity". There are several entries for 12/18-19/2014. I think the first one on 12/18 has the detailed petition. The others on the 19th are confirming the hearing for Jan 26th.

    See you on the 26th.

APOL
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