Renmanaz, I'm not really sure how relevant their average cost is to other investors, but the Bakers have been in the stock big-time since it was in single digits, so - even given the latest secondary and their recent purchases - their average price has to be well below the mid-30s. I would bet that it would come in somewhere in the 20s.
FWIW, that was Clay's answer when asked a few years ago about the possibility of being taken over. Basically: "We have a duty to listen to any offers, but our preference is ti remain independent and become a major pharmaceutical company." Of course, they all say that. :)
Applying Occam's razor ("Among competing hypotheses, the one with the fewest assumptions should be selected" or, put another way, the simplest proposed explanation usually turns out to be correct), I certainly agree that - with the benefit of their overall expertise and insider knowledge of SGEN - the Bakers probably are just opportunistically loading up for the inevitable high-price sale of SGEN to a Big Pharma.
And I agree that, given how they handled the recent secondary, the Bakers seem relatively honorable and considerate of other shareholders, marking on a steep curve in view of what passes for conventional Wall Street ethics.
But, again for what it's worth, another theory occurred to me last night:
We know that the Bakers can't be buying shares if a BP offer is currently on the table, but they could, conceivably, make an offer tomorrow to take the company private at, say, a discount price of $35 or even $40 a share -- not really hoping or expecting to do so but, rather, in the expectation that such an offer would trigger an immediate bidding war by various Big Pharmas, a bidding war the would dramatically raise the share price and serve all of our interests.
Again, that's just a theory to kick around and consider.
OK, so we're figuring that the Bakers - given their recent series of huge buys and their near-stranglehold on the company - plan to sell SGEN to a Big Pharma, probably within a year or so. Also, that they have no other way to monetize their huge holding because they can't efficiently sell their 37.4 million SGEN shares without dramatically flooding the market.
But...are there other possibilities? Do they have something else up their sleeves? If so, what could it be? For instance, can they be thinking about taking the company private - and, if so, what would the likely result be for the rest of us? Other theories?
Serious replies only, please. (Nothing from the multi-aliased troll - fsout/quadhole/rickarooski/mauihope/smelky/etc - will be read, since his aliases are all on ignore.)
They now own 29 percent of the company. They've bought around 3 million shares in just the last 30 days. This is extraordinary insider buying. I've never seen anything like it.
fjmardjetko, yeah, I still have a small amount. Still ahead, but obviously not as ahead as a few months ago. At this point, I'll just ride it out and see what happens.
Agreed on all counts. SGEN is fine the way it is; CLDX is a major mystery, with many unanswered questions (still ahead on a small CLDX investment, but pretty disillusioned).
And...they bought another 500,000+ shares during the last three trading days. This is really quite extraordinary.
They've been in for many, many years. My bet is that their average, even considering their participation in the latest secondary, is way below 35. Fwiw, my expectation is that the buyout - and there will be a buyout - comes in north of 70 and likely around or even north of $100.
And the Bakers bought another 1 million-plus shares during the last few days. The Bakers now own 28.4 percent of SGEN. Incredible.
kk2ck, as insiders, the Bakers could not be buying if a takeover bid or other major development were under non-public consideration. So, reports of their recent purchases give shorts and other bad players brief windows of reassurance that they won't get trapped by big, upside surprises. Wdsjapan has it right, though, imo. The Bakers are inside and they know what they're doing. The day will come.
...last week and this week, as soon as the earnings report liberated them from the restriction on trades by insiders. The latest tally: 1,269,147 shares bought during the last three trading days. They now own at least 27.8 percent of the company.
From a piece published today by the Puget Sound Business Journal: Another large biotech, Bothell-based Seattle Genetics (Nasdaq: SGEN), will increase its employee headcount by close to 15 percent this year, it said. About 100 employees will be added in 2016, Tricia Larson, a company spokeswoman, said. Those hires will happen in various parts of the company, from research and clinical development to corporate development.
Last year, Seattle Genetics hired more than 100 people, putting its current headcount at more than 750 employees. Roughly 640 of them are located in the Puget Sound region.
Two other thoughts after listening to the conference call: 1. Somewhat offsetting the stock's dreary recent performance, it's hard not to be impressed by the company's amazingly robust and promising pipeline. 2. You have to give management credit for taking a call from suspiciously negative Goldman Sachs and responding to it, despite the obviously antagonistic nature of the analyst's questions. (These were the only questions in the wake of which Siegall dispensed with the usual 'thank you for the question.' The hostility appears mutual.)
Also, fwiw, now that the financial results have even released, the Bakers no longer are prohibited from trading the stock. Given SGEN's bargain price, I wouldn't be surprised to see them adding to their position over the next few days.
Paladin, I'm listening to the conference call replay right now. You could be right about a profit during 1Q 2016, followed by a return to quarterly losses, but the cash river is starting to deepen.
In addition to the $20 million milestone already earned this year, a lot more cash is on the way to SGEN from Takeda, every year. From the 12:25 mark in the conference call: "Takeda's increasing sales also has a significant impact on the royalty rate [different then the one-time milestone payment) paid to us. The royalty rate on the first $100 million is in the mid-teens; increases to the high teens between $100 million and $200 million; and increases again to the low 20s above $200 million. There is also a fourth royalty tier in the mid 20s, which we would expect to reach when we expand into the frontline settings. [Side note: Interesting bit of front-line confidence right there,] These royalty rates reset annually."
Since Takeda already is over $200 million a year, we're looking at more than $40 million a year, every year, just from this one royalty arrangement. In its press release, the company talks about royalties of as much as $65 million, including the one-time $20 million milestone payment. And SGEN's financial guidance early in the year always proves conservative.
Just came off a day on the road. Interested in analysis by anyone other than the multi-aliased troll regarding today's report and conference call. At first glance, I'm liking what I'm seeing regarding revenue guidance for 2016 and catalysts during the years.