That was a shock

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biopearl123
Posts: 1665
Joined: Fri Jul 20, 2018 5:13 pm

That was a shock

Post by biopearl123 » Fri Mar 12, 2021 8:22 pm

So from the last earnings call we learned the timelines have been pushed out for both studies, the cash burn will be higher than previously guided and the company will expand in the R and D area. Oh, and Dr. Scarlett will be asking for something in the neighborhood of 250 million new shares. The opacity regarding new hires and the direction of the company re some new indication is emblematic of the usual disregard shareholders have been shown regarding transparency. Dr. Scarlett was asked directly about AML and he side stepped it. Dr. Ma's excellent preclinical work has pointed toward blast phase CML but who knows? One observation is that the EHA abstract titles are released on May 12th, one day AFTER the shareholders meeting so whatever submissions are submitted to ASH do not constitute the usual carrot that Dr. S extends to his dehydrated shareholders before each yearly meeting making it easier for us to support dilution, options, salaries etc. So there must be something else and we should know before May 11th otherwise the request for hundreds of millions of more shares will have no context and questionable support. Speculation regarding a merger, given the share request seems reasonable. The data remains strong and COVID as been a challenge. I will ask Drs. Scarlett and Rizo to differentiate Imetelstat and CPI-0610 as well as other competitors at the shareholders meeting. I do think the veil of secrecy re a new indication will be lifted before the shareholders meeting, otherwise why not have it on the 13th, the day after the EHA abstracts are made public. I continue to hope we will see data that translates into a positive alteration in the transformation rates to AML and or progression from low risk MDS to high risk. That's what disease modification should looks like and if we do have it, we should have it. Regards, stay healthy, bp

Edward
Posts: 9
Joined: Sun Nov 22, 2020 5:46 am

Re: That was a shock

Post by Edward » Sat Mar 13, 2021 8:33 am

I can now see why so many people have lost faith in Geron as a company. Whether you want to call it bad luck, a JNJ conspiracy, or mismanagement, the end result is the same. And the stock will be diluted to the point where the upside is all but erased.

There’s no shortage of positive sentiment out there but it’s entirely based on wishful thinking about a deus ex machina (partner, BO, or some undefined surprise FDA approval).

I’d still bet on imet getting out into the world someday, but it’s hard to believe it will be Geron doing it and anyone outside the company will be making money in the process.

Ryan
Posts: 348
Joined: Sat Jul 08, 2017 1:41 pm

Re: That was a shock

Post by Ryan » Sat Mar 13, 2021 7:37 pm

(Didn't let me post, so I'm breaking up my post into multiple...)

Hi Edward, I think you're on that right track with most assumptions, however your calculations are off for the "...where the upside is all but erased."

Let me do some calculations for you, based on facts and some assumptions of my own.

We know the share float is on it's way to 675,000,000 (imo this was happening whether there was a delay or not - they are moving to commercialization, as an independent company - very rare as we've discussed here many times).

After 1 approval, and with successful commercialization, which is another feat... market cap should be around 15-20 Billion. Simple calculation puts GERN at $22-29. That's better than $1.72, any way you cut it.

I challenge your conclusion that "anyone outside the company will be making money in the process", noting that while the salaries are good (great, pick your superlative), most all employees including the C-suite have the lion's share of their money-making opportunities tied to the value of the stock price. (Doesn't matter that most got their shares for free - $1.72 is essentially free as well if you sell at $25.)

And to Mr. BioPearl, thanks for the continued conjecture - regarding the independent investigators, yes there certainly could be independent pre-clinical and dare I say perhaps clinical (we haven't heard from Dr. Lane in quite some time). It's just basic fact that researchers, like investors/employees/sports stars, want to hook their lines to winning research that moves the needle for mankind, and thus yes the incredible data published both from the early and mid-stage clinical trials as well as prior investigative pre-clinicals are a calling card for new inquiring minds that have research institutions backing them...

Ryan
Posts: 348
Joined: Sat Jul 08, 2017 1:41 pm

Re: That was a shock

Post by Ryan » Sat Mar 13, 2021 7:37 pm

As far as any upside surprise, I can buy into a published pre-clinical (would have to have initiated a couple years ago, no one is going to announce a new one lol) way before the 'mainstream' babble-bunk on Yahoo! such as EMA, early approval wo an NDA, new trial announcement, new partnership announcement, or the big ring buyout announcement. All wishful thinking not really tethered to the realities of company statements or actions.

And I forgot one, the increase to 675,000,000 share cap is not a poison pill --- they would have needed additional funds (by way of additional shares) for commercialization, so if they are moving towards that path, which they stated directly in their co preso in January, then they need to have those shares ready.

bucbeard
Posts: 80
Joined: Wed Jul 25, 2018 12:30 am

Re: That was a shock

Post by bucbeard » Tue Mar 16, 2021 2:11 am

Most of the wishful talk about GERNs future has been centered on either a BP partnership and buyout, but a merger with another late stage biopharma, with other promising treatments in oncology, with a low stock float, would be quite interesting.

BioPearl - is this what you are alluding to in your original post?

Didn't we quietly hire a financial consultant a few years ago to help us consider our options post JNJ discontinuation? Cantor Fitzgerald maybe?

250 million additional shares is obviously a cinderblock to our own float with a price that can't get over $2/sh, but what if this new merged organization now presents 4 or 5 late staged treatments combined, and the value of the new organization calls for a fairly priced stock in the $15-30 range for such combined assets....a lot of money could be raised in the future with a smaller portion of the additional shares in the new price range, and the remaining larger portion utilized as the fuel for the merger transaction. You could build an independent company with a real shot at success, and stick it to the seemingly uninterested/uncooperative BP in the process.

Thinking "outside of the box" seems to always be suggested in the business world, so...

Zhears
Posts: 74
Joined: Mon Oct 08, 2018 12:19 pm

Re: That was a shock

Post by Zhears » Tue Mar 16, 2021 2:39 pm

I'm quite surprised at the overwhelmingly negative reaction from the CC.
Apart from the stabbing in the back from announcing a dilution immediately after the call. Do they not have a PR person that considers that this is a massively slap in the face that could have been easily avoided?

More dilution was always going to be on the cards, how this one is being done I don't understand yet.

However listening to the call JC seemed to be a lot more animated than I have ever heard before, with a lot more emphasis on the positive, including disease modification. He stressed this point emphatically, no hedging anymore.
Any one else notice a change in the tone of the presentation?

Edward
Posts: 9
Joined: Sun Nov 22, 2020 5:46 am

Re: That was a shock

Post by Edward » Wed Mar 17, 2021 6:37 pm

Hey Ryan, thanks for the different perspective. Would you mind sharing where you’re getting those market cap projections from? And what sort of timeframe you’re expecting for it to scale up to that? I hope to re-invest some day (closer to commercialization), so I’d love to be wrong about what the future looks like.

I’m afraid their new round of cash will just cover the bills through ‘23-24. Sales will hopefully start generating self-sustaining revenue then, but additional trials will take more cash - either through more dilution, or waiting for sales to ramp up, or a partnership that limits the peak profits. New trials won’t be producing data for additional years, so we’re mainly just talking MDS in terms of fulfilling the market potential anytime before ‘26. There’s a lot to invest in that doesn’t require a 5-year wait...

Ryan
Posts: 348
Joined: Sat Jul 08, 2017 1:41 pm

Re: That was a shock

Post by Ryan » Sun Mar 21, 2021 4:26 am

INCY is a $17.5 Billion company - they have approval in one of the two indications Geron is currently pursuing.

I'd say do what you need to do in terms of your investment rationale.

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