I disagree. First to beartrap, the latest financing included NO warrants. The total diluted shares are something like 160M (120M issued + 40M warrantsI think, but not sure. Still a successful PhIII would put valuation for a takeout at over $500MM so a 3x from here in 18 months is very realistic, assuming PhIII is successful, which I think it will be. With regards to the financing, these biotech "angel" funds always require a big margin of safety before investing, nothing new. CYNAF would have loved better terms but they were obviously not available. The investing funds are at least reputable ones who tend to hold investment for longer term. They did not go to the vulture funds that fund biotechs with much longer odds of success at more onerous terms. I believe they did the right thing. They are fully funded now and can focus their attention 100% on PhIII. You may be right, it will possibly backtrack and you can re-enter at lower level, but unless there is some bad news along the way, we may have crossed the $1 level for good. GLTA.
That's my thinking but more likely 18 months for the 3x. Need positive Ph III data for the big move in 2016. After that a sale or commercialization agreement would create more upside. CEO thinks co is worth $1B. That may be too much but a $750M sale would be reasonable, so additional 50% upside to $4-$5.
AS you can see, the market reaction to the placement has been positive even though it was at a significant discount (~20%) to Monday's pps of USD 95c. I think the key is the quality of investors giving CYNAF their vote of confidence, like Napodano said. Look-up those investors, some well known early biotech funds. Now it all comes down to execution with the funding overhang gone. I believe pps will slowly trend up as Ph3 moves forward and of course will have step changes with each positive announcement as story gets further de-risked. Of course if Ph3 fails it's over, but clinical risk appears low and risk/reward profile attractive..
This co is a gift. There is no better investment than a development stage microcap biotech with cash in the bank, low clinical risk, and a focused management team. If you know of another stock that can deliver a 5x in 18 months, please share. I follow all of Napodano#$%$ and this is by far my largest position because of the 3 things mentioned above. Among them "low clinical risk" being the most important one. It is not easy to find that combo. I invested heavily in Questcor back in '12, a "one trick pony" shorted by many but with one approved drug with large potential markets, lots of cash, and a smart CEO, and made out like a bandit. GLTA.
Meant to type "go up", not "group". I personally do not believe they will try to go it alone. Building a sales force and commercializing a product is a very expensive and time consuming and difficult task. I strongly believe they will partner or sell out. Either way I will be happy. By the way, nice pop today and relatively high volume.
Look, if you investment thesis is a buyback, then good luck, that is never a sure thing. But CYNAF seems to have a proven product with a really convenient delivery method. I believe clinical risk is low and when it gets approved they will have the option to sell out or partner to commercialize and in either case the pps will group, which is what I care about. Just focus on them successfully following their clinical path to approval. With regards to Acorda, I think they where interested in CYNAF but CYNAF was not interested in selling out so early. CYNAF believes they should command a $1B buyout price. Acorda was not willing to pay that kind of $. And I do agree that phase II should have been bigger but now "we are onto Phase III". GLTA.