I've never been a big advocate in dilution, but perhaps the $200 million IMGN is proposing could be just what the Dr. ordered. I certainly hope the majority of it will occur at prices well above the current price, but regardless if IMGN did use most of the 150 million shares they're authorized, and after using them they had nearly $300 million in the bank, take a look at how closely they'd resemble SGEN.
If I'm not mistaken, SGEN has nearly 150 million shares outstanding, they have a few hundred million in the bank, but the difference would be they have one drug they do routinely see sales revenue from, but they still are not profitable. The point is, they have a market cap that's nearly $10 billion, while IMGN's is just $300 million.
I believe it's clear that Bayer will have their drug approved in 2018, and that IMGN853 ought to be approved by 2020, other trial drugs are moving into Pivotal Trials as well. In short, by 2020 I certainly believe that IMGN should represent at least what SGEN represents today.
The question in my mind is, after the $200 million funding is done, eliminating questions about the company's ability to continue to fund its work, and the revelation of several drug trials data, shouldn't the market cap be at least a quarter of that of SGEN. If the O/S of both companies is nearly the same, that give us a share price of roughly $17. I could certainly live with that by the end of this year.
Gary
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