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Definition:
A stabilizing bid is a purchase of stock by underwriters to stabilize or support the secondary market price of a security immediately following an initial public offering (IPO). After an IPO, the price of the newly issued shares may falter or be shaky in trading.
1) Poor financials. Huge losses of $51.4 MILLION in 2019 and $38 MILLION in only the first 6 months of 2020. INBX claims it is due to "increased R&D costs", but it turns out that they moved into a very expensive building two years ago, overlooking Torrey Pines Golf Course with ocean views. No way, as an investor, am I going to pay for those views until they have a successful drug portfolio established. INBX is spending $ as though they are Celgene or Eli Lilly already. That kind of reckless spending rarely ends well.
2) Bad track record. This company is not new. It was founded in 10 years ago. They sold a CD47 antibody to Celgene. That program was terminated relatively quickly. INBX then sold a GITR antibody to Five Prime. That program was terminated almost immediately. Neither of those companies provided an explanation as to why they terminated the deals, that I can find. I'm speculating the antibodies showed some non-specific cross-reactivity and both Celgene and Five Prime discovered this early on? Purely speculative. Maybe the TOX studies came back poor? Either way, those companies got burned by INBX, IMO. That's what happens when you don't do your due diligence.
3) A biotech founded 10 years ago with virtually no success stories (except grants and a small licensing deal to Bluebird (another poorly run company)) values itself at $119 MILLION???!!!
The only ones getting rich off this deal are the VC firms and company management. No way am I going near this one yet.
@PDRennert