Hi all,
I've been reading with interest some of these NVX posts, and I just wanted to add my 2 cents.
Re: cash... many biotechs have convertible debentures to conjure up more cash. I believe the people who do these debentures (with high converting prices, generally) end up shorting the stock in order to lower their average converting prices. They already have the price set so they are almost shorting against the box.
Moreover, from the May98 10Q, there is quite a bit of milestone payment left to be paid from the Abbott and Pasteur collaborations so I don't believe the company is about to run out of cash anytime soon:
MARKETING, RESEARCH & DEVELOPMENT AGREEMENTS. In December 1995, the Company signed a clinical development agreement and license
agreement with Pasteur Merieux-Connaught under which the parties agreed to jointly develop its new conjugate vaccine against Group B meningococcal infection
for both adults and pediatric indications. Through March 31, 1998, the Company recognized $13 million of revenue from Pasteur Merieux-Connaught under these agreements. Future fees and funding would be made upon achievement of development, clinical and regulatory milestones. Total remaining fees and payments to the Company upon achievement of all clinical and regulatory milestones amount to $39 million. The time it may take to achieve future milestones cannot be predicted accurately, and there are no assurances that any additional milestones will be met. In addition, Pasteur Merieux-Connaught may terminate these agreements in its sole discretion at any time.
Under the marketing and distribution agreement with Abbott, the Company will receive clinical development payments and milestone payments upon achievement of prescribed clinical and regulatory events. Total remaining payments by Abbott to the Company under the agreement amount to $26 million. In addition, the Company will receive revenues from Abbott as it purchases Certiva and the combination vaccine products for resale to the private pediatric market in the United States. There are no assurances that the milestones will be met, that the quantities of Abbott's purchases of Certiva will be significant or as to the timing of such purchases, or that Abbott will not exercise its right to terminate this arrangement at any time with advance notice.
***
I don't know where to find info on AMEX stocks and their short positions histories but I would not be surprised if this huge short position began shortly following the convertible offering. What the individual shorter should worry about is when these institutions with their huge short positions decide all at once to cover their shorts.
Just my 2 cents,
Good Luck to all. |
