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Zynga, Inc. Message Board

mylkvveed 60 posts  |  Last Activity: Apr 17, 2015 2:09 PM Member since: Jan 6, 2007
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  • Reply to

    Ship of Fools

    by jbpenco Apr 17, 2015 12:56 PM
    mylkvveed mylkvveed Apr 17, 2015 2:09 PM Flag

    I did an "Oh Sweat" when I saw the headlines last night, however in short I think it's exactly what the press release states, a move to get someone with more clinical trial experience in at CEO. Notice Green is still on the BOD and was O.K. enough with the change to include his name in the decision to make it.

    According to the latest version of their investor presentation, 90% of the recent secondary was bought by three funds. Putting two and two together someone wanted more clinical trial experience heading HART and got their way. On the last earnings cc Green initially put the issue causing the 2-6 month delay in their clinical trial timeline on some swelling that showed up on the first large animal and a need to start over with a new animal. Later in the call he also mentioned something about working on processes (?) for the FDA (not sure of the exact terminology) as requiring time. I wasn't sure this was supposed to be a cause for the delay but an analyst on the call seemed incredulous this wasn't already taken care of as they've been planning for clinical trials for a few years.

    It sounds like a sizable investor might not have been pleased with this as well and pushed for a change. On the good news side they were already into the 2-6 month time frame during the last cc and noted the only issue that could hold them up would be problems with the second animal. The fact that they noted they are on track for their pre-clinical and clinical trial time line and reiterated this a couple of times on the cc last night sounds like the second animal is doing well.

    14 cents down and something like 25K shares traded last I checked; Mr. Market doesn't seem too worried about this one either. Dr. M is still my biggest concern.

  • mylkvveed mylkvveed Apr 16, 2015 6:53 PM Flag

    “My fellow board members and I concluded that the time was right to bring in a new CEO who has experience in guiding a biotechnology company through clinical trials and product launches,” said David Green. “I look forward to helping the Company navigate through this transition and its ongoing product development efforts as a member of the Board.”

    Tom McNaughton, CFO and interim CEO, said, “We remain on track to meet our previously-announced timelines for completion of our pre-clinical work and the filing of clinical trial applications for our HART-Trachea product in the U.S. and Europe
    ***************************************************

    I was too late for the conference call but will listen to the replay later. I have to admit I did an "Oh Sweat" when I saw the headlines however considering this would be the opportune time to kitchen sink any bad news and they confirm the path to clinical trials is still on track maybe not bad news.

    In the last cc, Green caught flack for throwing in a need to do some additional work on procedures (? I don't remember the exact terminology) for the FDA as part of the response to the announced 2-6 month delay. I wasn't sure if this was a reason for the delay or just work that needed to be done but the analyst seemed incredulous that this was not already taken care of. Reading between the lines it probably annoyed one or more new institutional investor and caused Green his job.

    The main cause of the delay was given as swelling in the first large animal that caused them to have to start fresh and need 2-6 months extra. They stated they felt they knew the cause of the swelling and had a solution but would not be able to know for sure until the new animal study was completed. Given they didn't change the status of the approval time line it looks like Animal #2 is likely doing well. If this is just about getting a CEO with clinical trial experience I'm O.K. with it.

  • Reply to

    Inverted Head and Shoulders forming

    by jrdelane Apr 2, 2015 12:01 PM
    mylkvveed mylkvveed Apr 3, 2015 4:08 PM Flag

    te_st if you just left it that HART is too risky a play for your money, I wouldn't have a single issue with your input. It's your smug arrogant attitude they you know everything and only uninformed dopes would waste their money on such blatantly obvious biojunk as HART.

    It isn't just SIO, it's the CEO and CFO stepping down from easy jobs at the company the CEO founded to run this obvious bio junk and then adding to their already sizable HART stakes. On top of this if Yahoo is accurate their stakes in HART are most of their compensation. Then you have the recent over subscribed secondary and doubling of the share price telling you fairly sophisticated investors have interest in this obscure name. Before you do your straw man I am NOT suggesting this is the main reason to invest in HART or that it guarantees success it just shows that you're opinion of HART is not universally accepted by sophisticated investors.

    In regard to the compassionate care cases 22 months and counting average survival rate of 5 adults when the prognosis is a few months is substantially better than chance and indicative that the product probably does work. This is assuming it isn't all just a figment of Dr. M's imagination. If it is, I'm screwed. The other alternative is small sample statistical anomaly. I doubt it but that's what the clinical trials are for.

  • Reply to

    Inverted Head and Shoulders forming

    by jrdelane Apr 2, 2015 12:01 PM
    mylkvveed mylkvveed Apr 3, 2015 2:34 PM Flag

    te_st,

    Although I suspected you were HM when the post appeared a few months ago, I didn't bother to even bring it up until you decided to belittle SIO capital who apparently has a pretty decent track record. Even if you were HM it wouldn't matter to me other than mild amusement.

    I do still find it odd he created an alias for that one post and suspect he didn't just discover the Yahoo site that day. In any case, contrary to your opinion, it doesn't matter enough to me to go beyond simply asking you. If no is the answer it's good enough for me.

    Where do I fit in the game? I'm a guy who thinks the results of the compassionate care cases do provide optimism that this particular product provides a substantially better outcome for it's target market than current treatment. Combined with the near certain death prognosis of their target patients without this treatment, I believe they have a good chance of approval and I therefore own a stake that won't kill me if I'm wrong and this goes to zero.

    To tie this together, although you obviously believe yourself to be worlds greatest authority on biotech and if you say this is a zero it's a zero, SIO is yet more proof that it isn't just uninformed dopes like me who don't agree.

  • Reply to

    Inverted Head and Shoulders forming

    by jrdelane Apr 2, 2015 12:01 PM
    mylkvveed mylkvveed Apr 3, 2015 11:15 AM Flag

    While we're vetting analyst there was a mysterious parachuter on to this this message board a couple of months ago under the alias hwmccusker touting "RegMed" having a scoop about HART trying to raise cash, the implication was unsuccessfully so. A quick google search showed RegMed as some sort of biotech analyst site founded by a Henry McCusker. They had a negative opinion of HART and I had suspected at the time Mr. McCusker might be our own te_st_5674 who minted a new alias just for that one scoop. What say you te_st, is RegMed your day job?

  • Reply to

    Inverted Head and Shoulders forming

    by jrdelane Apr 2, 2015 12:01 PM
    mylkvveed mylkvveed Apr 3, 2015 8:56 AM Flag

    "While chances are you haven't heard of Sio Capital, Castor's fund has worked well by staying under the radar. According to our analysis of Sio, the New York-based hedge fund is nothing short of an alpha-generating machine. Since its inception in 2006, it returned 10.4% a year vs. a 3.8% annual gain for the S&P 500 Total Return Index. With a portfolio beta of 0.15 during this same period, that's 6.6 percentage points of outperformance per year at near-market neutrality.

    But there is more to Castor and Sio Capital than simply sparkling return statistics. There's also the fact that nearly every investment thesis we've seen from the hedge fund manager in recent history has been exceptionally dead on. On April 1st, Castor discussed the upside of three of his favorite health-care stocks with us at Insider Monkey: Cardinal Health CAH, +0.84% NPS Pharmaceuticals US:NPSP and Anacor Pharmaceuticals ANAC, -0.49% Since his analysis, the pieces of this trio are up 28.0%, 185.3% and 70.4% respectively.

    Since confessing his love of two other medical companies — Rockwell RMTI, -1.04% and Mazor Robotics MZOR, -1.54% — in June, both are up an average of 84.1% in just over three months."
    **************************************************************

    I've never heard of the fund or manager before but he doesn't sound like a dope or stock promoter to me.

  • Reply to

    Serious question

    by mass.biotech Mar 26, 2015 3:38 AM
    mylkvveed mylkvveed Mar 26, 2015 2:22 PM Flag

    M.B.,

    I'm not sure how familiar you are with this story, however whether the compassionate care cases that management cites a proof of concept mean anything is probably the key difference between the bulls and bears on this one. IE: the patients were supposed to have a life expectancy of a couple of months, the average survival rate of the 6 compassionate care cases using HART's proprietary scaffold is at 22 months. There are two current survivors however none of the deaths have been linked to the regenerated trachea.

    One death was an auto accident, another alcohol related? a child died in an unrelated surgery. I don't remember them all but you get the point. There is a fly in this ointment though. the lead surgeon in all of the compassionate care cases Dr. Paolo Macchiarini (sp?) has been accused of professional misconduct. if you google search him and read the accusations they are serious and put into question the quality of the survival. He was accused in the recent past and found not guilty but the results of the latest investigation have not be released to my knowledge (and as of the last cc).

    I've pushed to get confirmation that management can corroborate the results of the compassionate care cases they are citing as proof of concept, without relying on Dr. M's word, in case he's not exonerated this time. They addressed this on the last cc and while I wasn't totally satisfied with the answer, the fact other doctors have been involved and can corroborate the results has me less worried about this one.

    Finally the fact the CEO and CFO stepped down from safe positions at the former parent company HBIO, that the CEO founded in order to run HART, and also have significant financial skin in the game including adding during the recent secondary (and after the Dr. issues were raised) gives me some comfort that the compassionate care cases are real and do provide reason to be optimistic about their chance of getting FAD approval.

  • Reply to

    Serious question

    by mass.biotech Mar 26, 2015 3:38 AM
    mylkvveed mylkvveed Mar 26, 2015 1:50 PM Flag

    They are somewhere between device and drug. they've already been granted orphan drug status in the U.S. and expect the equivalent in Europe soon. The distinction between drug and device will affect which path they go through clinical trials.

    They provide a time line in the investor presentation on their website and it was recently pushed back 2-6 months due to an issue that popped up while preparing for their large animal trial. They discussed this on the recent cc. There was some inflammation that showed up on a large animal case that they believe they understand and have a solution for, however they won't know for certain until the trial with the solution is completed.

    Including the additional 2-6 months their current time frame to approval and beginning sales is some time in 2018. I'm not from the medical field and don't remember the exact terminology but this timeline includes expectations of expediated reviews due to the near certain death prognosis of the target patient population and the level of improvement over traditional treatment demonstrated in their compassionate care cases to date.

    I ball parked they triple shares outstanding from 8M to 24M to get to an operating company. Given the recent cash raise is likely to be their most expensive I think this is conservative enough. If you see my recent ballpark valuation (assuming approval) there is a ton of room for error baked into the current share price even considering some pretty conservative assumptions. Of course if they don't get FDA approval the fair value is zero.

  • Reply to

    Serious question

    by mass.biotech Mar 26, 2015 3:38 AM
    mylkvveed mylkvveed Mar 26, 2015 10:30 AM Flag

    In my previous post on this m.b. I put together a valuation for this one "ASSUMING" they get FDA approval for their trachea product. This is a zero if they don't. The information I used comes primarily from an investor presentation HART has available on their website.

    In short they originally projected a fee of between $100K and $200K/ procedure although I think on recent calls they are leaning toward $100K as more likely. This compares favorably to the cost of traditional treatment and management has stated that they've discussed this fee with insurance companies and they are agreeable to it. In fact management has suggested insurance companies may wind up picking up some or all of the tab for clinical trials due to the favorable price and small population of eligible patients for their product.

    That brings up the potential market size of ~7,000 patients per year in the U.S. and E.U. according to their investor presentation. Given their orphan drug status grants exclusivity for 7-10 years (U.S.-E.U.) and their target market has a life expectancy of a couple of months under current treatment, they should get a decent slice of this market (if they get approved).

    If you go on their web site you can see their two primary physical products in the scaffold and bioreactor. Looking at these compared to their projected $100K reimbursement rate it looks like it should be a high gross margin product and management confirmed this on a recent cc. In addition to this management discussed marketing noting that because this product will only be used in a handful of hospitals across the country they will not need an extensive marketing plan and could handle it with a couple of people. IE: this should be a high net margin product as well (if they get approved).

  • Reply to

    Informative Conference Call

    by mylkvveed Mar 19, 2015 12:14 PM
    mylkvveed mylkvveed Mar 20, 2015 1:59 PM Flag

    If you look at the scaffold and bioreactor it looks like this should be a very high gross margin product at their projected reimbursement rate of $100K/ procedure. Management confirmed this on a recent cc. Because only a few facilities will be doing these procedures they won't need a huge marketing budget which was also confirmed on a recent cc. The total U.S. and EU market for their product is ~7,000 cases/ year.

    I ballpark they'd triple share outstanding to get to an operating company. The just completed fund raising will probably be their most expensive so I'm probably conservative enough on this one. When I first got interested in this one I found "JAZZ" as one product biotech comparable for ball parking margins. I had guesstimated 25% before looking at JAZZ and that's where they came in. Looking at the scaffold, bioreactor and knowing they don't need extensive marketing I'm probably plenty conservative on this one as well.

    If we assume they'll get to half of the projected total market or ~3,500 patients a year for ~$350M/ year revenue run rate and at 25% net around $87.5M net income you get ~$3.64/ share in earnings at 24M shares outstanding. There will probably be plenty of hype around the stock at that point, particularly if the esophagus is on it's way. I'll ballpark a 30X multiple which again is probably on the conservative side for a share price of ~$109. Assume the projected approval slips to 6 years from now and give and give this one an appropriately conservative discount rate of 15% and you have a present value of $47.00/ share. Even if you double the time frame to 12 years you get a present value of $20/ share.

    "IF" they get approval the time value of money is more than baked into the current share price.

  • Reply to

    Informative Conference Call

    by mylkvveed Mar 19, 2015 12:14 PM
    mylkvveed mylkvveed Mar 20, 2015 9:01 AM Flag

    Micro cap in developmental stage and not in clinical trials yet so this one is not on many radars. My guess is it will remain the handful of us posting now until they're into clinical trials and "hopefully" on their way to approval and a real business.

    The good news is there are some knowledgeable people posting here including our resident bears so we may not have volume but we get a higher quality than most yahoo mb's.

  • Good questions from Mark Landy and John Ajay, you hit my issues. I'm more comfortable they can substantiate the compassionate care cases without relying on Dr. M's word but not totally sold. I detected some hedging on their part. I didn't like the qualification that they could independently verify "many" of the results. I also wasn't comfortable with corroboration from the hospitals (relying on Dr. M????) but did like the fact that other doctors were involved and can corroborate.

    I would have liked a better explanation of why the control issues were not already dealt with. My sense is this is S.O.P. and already baked into their time frame but they brought it up to enhance the explanation of the 2-6 month delay in starting clinical trials. Not anticipating this and needing time to enhance controls isn't much better of an explanation. I don't think either case is a game changer but a reminder to "trust but verify" management talk.

  • Reply to

    Cash balance

    by investinbiotech Mar 9, 2015 10:21 AM
    mylkvveed mylkvveed Mar 9, 2015 10:46 AM Flag

    They had $7.7M cash end of Q3 with a cash burn rate of ~1.9M/ qtr which would leave about $4.6M left of that money. They just completed a secondary raising ~$8.5M to get them to ~$13M cash right now. That should get them into clinical trials before they have to raise cash again.

    Given issues with lead Doctor on compassionate care cases and common knowledge they needed to raise cash the fact they were able to do so was a huge relief and sign of confidence as reflected in the stock more than doubling since they announced the secondary even though it was highly dilutive.

    The big issue left is the verdict on the allegations of professional misconduct for Dr. M. It was supposed to be rendered at the end of February at the earliest. I haven't seen anything but judging from the run up in HART lately, either a favorable verdict is expected or it is expected management can validate the results of compassionate care without relying on Dr. M's word.

  • Reply to

    S and M

    by jbpenco Feb 27, 2015 4:59 PM
    mylkvveed mylkvveed Feb 28, 2015 9:42 AM Flag

    No doubt about it HART is a thinly traded micro cap and it doesn't take much to move the stock. That said, relatively speaking it was a ton of volume (for HART) in a short time. Obviously someone wanted in and in a hurry. Did they know something? We'll find out soon enough.

  • Reply to

    S and M

    by jbpenco Feb 27, 2015 4:59 PM
    mylkvveed mylkvveed Feb 27, 2015 7:49 PM Flag

    No volume and treading water until the last couple of hours,when volume went ape shy t. It looks like someone is expecting good news and couldn't wait to get in. The verdict on Dr. M was supposed to be end of February at the earliest. Maybe someone got wind of the results of the investigation? Pure speculation on my part but at least there is some logic to it.

  • mylkvveed mylkvveed Feb 26, 2015 12:38 PM Flag

    I believe stav is on a phishing expedition and is referring to his shops own video.

  • Reply to

    Welcome William Lawrence Hawkins!

    by mylkvveed Feb 20, 2015 8:38 AM
    mylkvveed mylkvveed Feb 20, 2015 2:23 PM Flag

    I graduated from a NJ University Cozy, however I doubt it's the one you are referring to. Princeton I presume. I think you mentioned you are a physicist, which would go to Princeton as your preferred frame of reference. Princeton, would however be the only other school in NJ offering my degree.

    In regard to pigs being a good choice for the large animal study's, it occurred to me after my post that another benefit would be some good BBQ if the study doesn't turn out well.

  • Reply to

    I avoid

    by te_st_5674 Feb 20, 2015 12:00 PM
    mylkvveed mylkvveed Feb 20, 2015 1:53 PM Flag

    I'm sure you are aware I took my stake long before the Texas advisor showed up. I will agree his obvious optimism is no more reason to buy than your pessimism is a reason to sell. I mainly brought him up to give you another even more lost soul than myself to save.

  • Reply to

    Welcome William Lawrence Hawkins!

    by mylkvveed Feb 20, 2015 8:38 AM
    mylkvveed mylkvveed Feb 20, 2015 1:22 PM Flag

    We can add my home state of New Jersey to the list of 13G filers and new 5%+ owners

  • Reply to

    Welcome William Lawrence Hawkins!

    by mylkvveed Feb 20, 2015 8:38 AM
    mylkvveed mylkvveed Feb 20, 2015 12:53 PM Flag

    Oops just noticed the math on the last post doesn't add up. I must have added an extra digit to share bought on my calculator. His price tag is more like $2M and a lot further from the $6M dollar man than I supposed in my last post.

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