Glenn, nice job with your trades, especially waiting for the info to come out before taking a position. The rest of us are just gamblers! Personally, I sold 21 calls against my position, so I'm hoping this doesn't get too far away here. With RLYP, you never can tell what's going to happen!
Any read on whether the FDA has problems with the drug itself? I would guess 'no' and the odds of a clean label for AZN just went up a bit. Guess we'll have to live with uncertainty for a bit longer. Should be plenty more opportunities to trade this up and down.
I would love to learn when the reconstituted board plans on meeting next. I doubt anything significant happens until then.
I am a bit new to Keryx, so I am still trying to understand the significance of these board changes. Can anyone here explain it further? Where are the connections to Baupost? If I read things correctly, three seats are up for election. Has Baupost put forward their own candidates yet?
From the proxy material, they seem to be getting ready to raise more capital. Baupost's vote on this matter will be telling.
The free starter kits are my main concern and are running way behind my expectations. They can't even give the stuff away! Expect the growth in paid scripts to really come down soon.
I've been keeping a simple linear model of prescription growth, which predicted 700 paid scripts last month and 1056 this month. That growth rate brings us to about $16 million for the year. We are obviously running way behind that at this point. At the rate we are going, we'll be lucky to cover the interest on the new debt!
It has been painful watching the script numbers come in over the past few months, especially the slowdown in starter scripts. Management needs to sell the company before people figure out that their market is going to take an extraordinarily long time to develop.
Congrats on Anacor today. In hindsight, one of the interesting "tells" had been the call options management purchased along with the convertible. It is also interesting that RLYP skipped a convertible outright. I think that too points to a quick sale for RLYP.
Another difference between Anacor and Relypsa: Anacor's management was much more practical and just plain smart. They are a bunch of academics with little interest in building a commercial organization. In contrast, Relypsa's team is made up of a bunch of arrogant, gambling empire-builders. I think a sale will happen eventually, but they may have overplayed their best hand already.
If I had $100 million, I would totally buy this company, keep the cash, and sell the pipeline. Seems like a no-brainer, but there would need to be a significant premium over where we are now. I don't think Guy is motivated to sell. He sold off a big chunk of his equity already, so he doesn't have much skin in the game. No, he'd rather keep his cushy job going and grant himself more options along the way.
Any word of a white knight coming in would immediately move this stock to at least cash value, negating any benefit to the would-be acquirer. Anyone interested in the the company would likely be making partnership deals here on future revenue from their pipeline. Tetraphase is in a very weak negotiating position here.
I am trying to see the silver lining here. So rather than just running one P3, we now have to run two? I guess the last two years have been pretty much a complete waste of time and money. We are now a P2 company, minus some of the risk, but also minus investor goodwill and minus a superlative funding environment. The next funding round (late 2016 or early 2017?) is going to eradicate even more shareholder value.
Prediction: they will basically have to give away the rights to either eravacycline or TP-6076 just to keep the lights on. I'm guessing it will be the former.
Be careful here. This company is losing $3 per share per year. That's $90 mil in market cap out the window. So $7 here is really like $10 a year ago. And they will have to think about rolling debt very shortly, likely at a much higher interest rate. I am very surprised at the insider purchases earlier this year, but maybe they know something we don't?
Wish I could have followed my own instinct on this! Where to now? I think even a good outcome with the FDA (unlikely, in my opinion) will only get us back to where we were two weeks ago. Maybe we will hear something once the Sarepta circus is over.
Just one point on this: "strategic alternatives" sounds very close to "strategic optionality" to me. I think the CFO knows this will be sold and has given multiple signals to that end. They are gambling on the ZS9 outcome, though. If you hold the shares, you choose to gamble with them. Personally, I am surprised the BOD puts up with this, but we know at least one director is inclined to gamble too.
OK, I'll take the bait on this.
Let's pretend for a moment that Sarepta was selling snake oil. Wouldn't it make you angry that patients and health care providers were being led down a trail of false hopes while some executives and investors were becoming wealthy off of inevitable price-gouging and overpayment?
The purpose of markets is to allocate capital to the best ideas as efficiently as possible. If capital is flowing to the wrong companies and the wrong ideas, then the markets are not serving us well.
I am not suggesting that Sarepta's drug is snake oil, but they haven't been practicing the best science out there. Why should Sarepta be given the advantage of a high stock price and the opportunity to raise more investor dollars when there are plenty of promising companies with sound methods and ideas who could use a bit of investor help too? Are those companies with their patients any less deserving?
Someone said earlier that the longer this takes, the better our chances on a positive outcome. I am less sure about that now. If we go into the earnings call with no more information, "any day now" is not going sit well with investors. Is the plan to just keep stringing us along until the next P3 is well under way?
Tried to buy some at 6.55, but of course, no takers.
Tried to sell some at 7.17, but again, no takers.
These swings have all been market-maker or HFT noise, mostly 100 shares on either the bid or ask. There is virtually no liquidity here.
Personally, I am not looking forward to earnings. Australia is not looking good. Hope the insiders know something we don't know.
If Relypsa walked away from negotiations, it's because the offer is too low and they believe they have time on their side. The Bezinga story actually makes a lot of sense; that is, I believe that Relypsa management is inclined to gamble on the ZS outcome and thinks their company is worth more than the market has been telling them. I also tend to believe that Relyspa was behind the Reuters story, especially if they weren't serious about the offer to begin with. It keeps the pressure on any potential suitor and makes raising additional (ATM) financing easier.
Even so, it's good to know that there are still suitors out there. So much rests on ZS in May, but the end game is probably not that far away.
This whole past week just doesn't smell right. The Reuters journalist at least checked and cross-checked his information. Bezinga would likely shoot first and ask questions later, all in the name of a scoop. I bet it's easy for a journalist to get played in situations like this.
Aren't buyout premiums calculated from the price before the rumors start to fly? So we should all use $14 as the base price for any offer. 1.2-1.6 billion would represent a 100% to 166% premium. That would put the share price at between $27 and $37. I think that would be hard for the executives to stomach, given where they were a short while ago. Things have been moving extremely quickly the past few weeks, especially with the Allergan breakup. I think this is an intentional leak by management designed to either put pressure on suitors or show Wall Street that there is still interest. Put yourself in the shoes of the board of directors, and maybe you can guess the outcome.