Steve:
Early-stage biotechs are largely dependent on dilution for continued funding. The stronger the stock, the more bang they get per issued share. George Rathman knows, those of us who were early investors in AGPH respect this more than most.
Pharmas keep quiet because they don't want to draw attention to their progress, and they make money from selling stuff. The stock price is derived from PE projections, not solely from hope for and hype of the pipe. Successful biotechs have to turn this corner at some point.
So, AGPH now makes money. Johnson is concerned with bringing margins up for Viracept, among other issues. He is concerned with major, SUBSTANTIVE progress, not the transition of a compound from safety trials into efficacy trials. When he has some efficacy data, that will be a different issue.
He no longer needs to sell stock to keep the company going. The company is highly profitable. AGPH is morphing into a different creature. The nice thing is, it was never a hype machine in the first place.
There are major issues to focus on..... (1) Viracept market share and margins, the sort of stuff that Margie, Peter and others bring to the thread, (2) who is making offers to buy the company, and are any of the offers attractive enough to make Johnson interested, (3) what product is AGPH closest to for in-license, and (4) why is the Chiroscience MPI program so attractive?
Focus number 4 impinges on the perceived value of 3340 and on what Johnson will do with any offers (focus number 2). If focus number 3 is no longer an emphasis at the company, then we know that focus number 2 is alive and jumping (however, Donna et al. are clever enough to fake it).
At worst, there's a rich preclinical effort backed by focus number 1. In January, the company already had 850 employees, of which over 500 were involved with R&D. Snyder hasn't blinked. He has drawn a blueprint and followed it, capturing the market share necessary to give AGPH some options.
So, now, we sit back and watch to see if the next moves are as smart as the past ones. I understand the frustrations of holding shares that were purchased at prices where insiders are selling. I own ARQL, and...... trust me..... it's much more frustrating to watch insiders sell *before* they have gotten the job done.
:-(
Would it be responsible to pump the transition of 3340 from phase I to phase II/III, given BBIOY and Chiroscience? I don't think so. Let's see what happens with foci 2 and 3, and hope that Johnson et al. are working on the breadth of a deep pipe. They're masters of strategy.
Disclaimer: I no longer own AGPH. As many here know, I like to go for second- and third-tier companies where the risk is more pronounced.
Cheers! Rick |
