thread: HEB (AMEX, $8) is an interesting biotech that is flying high
after being touted by the same German 'analyst' firm that touts TRBD.
The analyst firm is 'Value Management & Research GMBH', which has a
web page at vmr.de
You can download an English-language .pdf file with their report
vmr.de.
The disclaimer at the end indicates that they might have a position
in the stock or perform 'services' for the co.
Within a month after this report, the stock soared just before it was
listed on the Berlin exchange, with the help of none other than Value
Management & Research GMBH.
Chart, news etc. can be found at quote.yahoo.com
Doing a little DD of my own, I found that:
* HEB was brought public in 1995 by Stratton Oakmont,
which doesn't have the best reputation, and
* since 1995 the stock has been diluted nearly in half.
* One of the dilution mechanisms I found is that the officers are
paid partly with warrants.
* They have done a discounted convertible deal since 1995,
although the shares have already flipped.
* The market cap of $175 M is now about 40 X the annual run rate for
R&D, which is way too high for a development-stage biotech.
Their latest private placement was 3.7 M
shares of common stock sold early Sept 1997, and these shares come
out of lockout after 12 mos., which is very soon. See prospectus
excerpt below. The float is $6.6 M, so there could potentially be a
big impact. I find this bit of timing info to be quite helpful,
similar to the info you get for the sales of common stock associated
with discounted convertibles.
The co. is a biotech, with a drug Phase III clinical trials for
the treatment of Chronic Fatigue Syndrome. Phase III just began
last week, so maybe there won't be any results to announce for
a while.
A MarketGuide report is pasted below. Note the negligible short
interest.
from the prospectus:
1. Pursuant to the Term Sheet dated September 2, 1997, the Company
sold 2,840,000 shares of Common Stock at $2.50 per share, through Hermitage
Capital, Inc., the Company's placement agent ("Hermitage"), thereby raising
$7,100,000. Hermitage received as compensation, 6% of the gross proceeds
and 200,000 warrants exercisable at $4.00 per share and expiring on
December 31, 2000. The shares of Common Stock and the shares underlying the
warrants are subject to 12 month lock-up agreements.
2. Pursuant to the Term Sheet dated September 22, 1997, the Company
sold 968,334 shares of Common Stock at $3.00 per share, and one warrant for
every ten shares purchased. The warrants are exercisable at $4.00 per share
and expire on December 31, 2000. The Company offered its securities through
finders and broker/dealers, and paid commissions of 6% on sales, and one
warrant for every ten shares sold. The Company raised $2,905,000 and issued
96,833 warrants to various investors and 88,234 warrants to various
finders.
===================================
Market Guide Quick Facts Report
Hemispherx Biopharma, Inc SYMBOL: HEB EXCHANGE: AMEX
PRICING DATA (AS OF) 07/31/98 RATIOS & STATISTICS
Price 8.25 Price/Revenue (TTM) 484.16
52 Week High 9.44 P/E (TTM) NM
52 Week Low 2.63 Price/Book (MRQ) 18.45
Beta NA Price/Cash Flow (TTM) -30.00
Avg Daily Vol (10 Day) 0.60 Mil ROA (TTM) -74.12%
Avg Daily Vol (3 Month) 0.25 Mil ROE (TTM) -86.33%
Current Ratio (MRQ) 10.79
DIVIDEND INFORMATION Total Debt/Equity (MRQ) 0.00
Indicated Annual ($) 0.00
Yield 0.00% NOTE: TTM = trailing twelve months
MRQ = most recent quarter
SHARE RELATED INFORMATION SHORT INTEREST INFORMATION
Market Cap. ($) 174.686 Mil Current Month 0.293 Mil
Shares Out. 21.174 Mil Previous Month 0.221 Mil
Float 6.600 Mil Short Interest Ratio 2.5 Day
INSTITUTIONAL & INSIDER OWNERSHIP
PURCHASES SALES NET PURCH %OWNED
Institutions (3 Months) 0.679 Mil 0.750 Mil -0.072 Mil 13.1%
Insiders (6 Months) 0.020 Mil 0.000 Mil 0.020 Mil 68.8%
BUSINESS SUMMARY HEB and its subsidiaries is a biopharmaceutical co.
using nucleic acid technologies to develop therapeutic
products for the treatment of viral diseases and certain
cancers. For the 3 months ended 3/98, revenues totalled
$86K, up from $30K. Net loss fell 36% to $1.5M. Revenues
reflect increased enrollment of patients in the Cost
Recovery Clinical Treatment Program. Lower loss reflects
the absence of a $1.2M Preferred Stock conversion expense.
REVENUES (Thousands of U.S. Dollars)
QUARTERS 1995 1996 1997 1998
MAR 761 18 30 86
JUN 272 0 32
SEP 1,923 10 93
DEC 10 4 104
TOTAL 2,966 32 259
EARNINGS PER SHARE
MAR -0.050 -0.040 -0.150 -0.070
JUN -0.060 -0.070 -0.070
SEP 0.060 -0.100 -0.090
DEC -0.070 -0.080 -0.060
TOTAL -0.120 -0.290 -0.370
10/97, Exchange changed from NASDAQ to AMEX. FY'97 Q's arebeing reclassified. |
