George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
yes, good to discuss...
special sit investors often play in highly illiquid credit situations. the fact that Novelion stock is OTC really won't phase them much.
but i take your points and there's no doubt that the price action has been disappointing and a surprise to me and others...
exactly...so novelion holders wait for the redistribution of the proceeds from the sale of the amyrt stake on the liquidation of novelion. see below. in fact, it may well be simpler than i've thought it was: perhaps the novelion stake is simply an overhang that needs to be cleared asap. but i still suspect that if novelion is or was trading OTC at a worthwhile discount to the proceeds of an amryt's stake's sale and its redistribution to novelion shareholders, then this is a trade that a special sits fund will try and exploit.
"The Liquidation Proposal follows the previously announced completion of the acquisition by Amryt Pharma plc (“Amryt”) of 100% of the outstanding equity interests of Novelion’s former operating subsidiary, Aegerion Pharmaceuticals, Inc. (“Aegerion”), as contemplated in Aegerion’s First Amended Joint Chapter 11 Plan (the “Aegerion Transaction”). In the Aegerion Transaction, which closed September 24, 2019, reorganized Aegerion became a wholly-owned subsidiary of Amryt and Novelion received American depository receipts representing approximately 14.0 million ordinary shares of Amryt (the “Amryt Equity”) in full satisfaction of Novelion’s claims as creditor under the secured intercompany loan between Aegerion and Novelion.
At this time, Novelion does not maintain any ongoing business operations, nor does Novelion have any sources of revenue, and the Amryt Equity represents its primary asset. In furtherance of the Company’s duty to maximize value to shareholders and stakeholders, and after considering the limited strategic options reasonably available to the Company, the Novelion Board of Directors (the “Board”) called the Annual Meeting to seek shareholder approval of (among the other matters described below): (i) the voluntary liquidation and dissolution of the Company pursuant to the Business Corporations Act (British Columbia) (the ‘‘BCBCA’’) at a time to be determined by the Board, (ii) the Company’s plan of liquidation and distribution substantially in the form attached to the Proxy Materials, and (iii) one or more distributions to shareholders of any remaining property of the Company, all as more particularly described in the Proxy Materials (collectively, the ‘‘Liquidation Matters”).
I posted this back in early sept. It’s very likely that there will be a hedge trade in place with US special situations investors long Novelion and short Amryt and that might account for some recent underperformance. until we get the full pro forma numbers at the next set of results for ‘new’ Amryt, the long only institutional investors will stay away - its just too complicated. However, I’m still confident that this is a really compelling medium term story.
“12 Sep '19
It’s all here in this excellent link posted by gameangler. This is an arbitrage / special situation investor’s wet-dream so lots of stuff won’t make short term sense. For instance, the Amryt stock will be shorted by those going long Novelion stock so they are hedged and their gain is near risk-free. As the seeking alpha article points out, there’s a near three-bag opportunity in Novelion stock in the US because it will own around 8% of Amryt post transaction.
https://seekingalpha.com/article/4290742-novelions-8_1-percent-stake-amryt-worth-1_50-share?dr=1
Article in The Times today...Wrightbus to produce hydrogen buses...Bamford a significant holder in ITM, as we know. Presumably this sets ITM up as preferred bidder for future hydrogen supply infrastructure to bus networks involving Wrightbus...The Bamfords will own stakes in the complete hydrogen transport supply chain. Next step - construction equipment, etc.
“Jo Bamford, son of Lord Bamford, the JCB diggers billionaire, has emerged as the likely buyer of Wrightbus, which fell into administration last month.”
again, a different indication than RP but the article is just a reminder that there are lots of efficacy issues for even the most hyped of technology in this space - gene therapy.
the industry is very used to dealing with failure and the data we have is many things but it's not that.
I think articles like this put our stunning first cohort and still impressive later cohort data in context. a US license deal is a lot more likely than this chart currently prices in.
https://endpts.com/stuck-with-a-phiii-gene-therapy-failure-at-96-weeks-gensight-prefers-the-upbeat-assessment/
just a few points to make.
yes, the data aren't presented in a particularly clear format in the RNS but i think management needed to indicate that results were good but were not as 'perfect' as the initial read-out. this may have been to temper expectations as the stock price ran up but we will never know. I will say, with some experience of science data, that the data from the first cohort was almost too good. mammals generate weird and wide-ranging reactions to treatments. There's a lot of optimisation and refinement that lies ahead of us so you can expect outcomes to improve. hence, my read is that the data is still very good and our chance of partnering is very high.
the conference presentation to the key science experts in this field in mid Oct is absolutely KEY. it will contain data arranged differently and perhaps new data that we have not yet seen. The company and the science leaders will be completely focused on that conference paper, not the RNS that has caused so much angst (and yes, this probably means the way the RNS was laid out was an Investor Relations misstep).
Arguably, the main priority for the share price to perform is to hack away at the Woodford overhang and clear it. For long term holders, a lower price for RENE that encourages more institutions to take stock from Woodford is a good thing. We should all be cheering at the volume of stock moving every day and not obsessing about the share price (but here I accept that the big moves have caused losses to some of us. we've all been there and it is gutting and i'm sorry to read about them).
It’s really exciting. A complete game-changer in terms of gaining access to a huge number of projects, globally.
Interesting to note that Air Liquide, the global competitor to Linde, took a similar sized stake in Hydrogenics, a Canadian peer to ITM earlier in the year. 4 months later Hydrogenics was taken out by a large US industrial group after a share price doubling ( in part because of the added credibility of the industrial partner).
our issue here is staying independent for long-enough to really see the share price gains long term holders deserve. A 2x from here really isn’t enough (but better than a poke in the eye).
The Woodford holding is still there...the only blessing from the share price being at these levels is that his holding will be diluted right down in any cap raise because there will be a massive new issuance of shares to raise sufficient funds to get them to break even ....
The concern is that the cap raise has not happened yet. I thought it would be announced on results day a few weeks back. Let’s get it done!
You raise a fair point, Nom, but I think you’re underestimating the operational leverage in the business. The current plant, already mostly if not all depreciated, is good to take orders/ production volume up to a sales equivalent of circa $15mn. There is very little incremental cost of goods from any new orders won.
In my experience, when you see business managers like the CEO/Chair/etc load-up the extent we have seen here it tells you one thing: they think they’ve got enough cash to get to breakeven and beyond and they do NOT expect to be diluted by a third party.
I’ve previously made the point that the share register changed so much over the summer that there was always ‘wood to chop’ till the register settled down. It’s disappointing to see us drift this low but maybe it shouldn’t be a worry/surprise.
I still believe this is one of the best medium term opportunities on AIM.
I think the WPCT sell-down was in July - that was when it was recorded in the financial press. That would imply that the Woodford overhang is still somewhere near 20%.....I guess we should assume that this is the case until we know otherwise. I'm not sure what the catalyst will be to clear it... Good news at Autolus is perhaps the most obvious. A deal in IPF by Pharmaxis in Australia?
In theory, we should all just relax. They've got a decent amount of cash to invest and they've invested in a decent range of interesting assets. They're doing all we asked of them.
At some point, the Woodford stake will provide someone with a neat way to take a decent sized position in Arix, which is pretty illiquid. I just wish for all our sakes it was sooner rather than later.
Ok, so the WPCT RNS today confirms that it has completed the disposal of its Arix stake. I guess that still leaves the residual holding in the Equity Income Fund....At least there’s now only one moving part to the Woodford overhang story. It’s going to be a relief to all of us when that clears.....
it was part of the clean-energy / renewables bubble....if you plot a chart of a solar or wind stock, you'd get roughly the same story. those concept stocks without any revenues and in need of funding simply got crushed. IP Group, Griffiths and others bought Ceres, effectively out of administration. It was a great trade.
Like all great bubbles, there was some underlying relevance to it. We're just about to reap the clean tech bubble benefits, just as the big tech guys reaped rewards from the wreckage of the dot com bubble burst.
I think the move is a reflexive one. Griffiths has been the seller here. If he's now done then the stock price was always going to move higher at that point - particularly as there's a psychological threshold for it to break at 200p.
More interestingly, if he has been selling to an institution, perhaps that institution is still looking for stock and we can continue to move higher ?
It's difficult to see how the results will disappoint early next month. Although typically I'd prefer to go into a results RNS with the stock price under-cooked rather than than overbought, this is such a strong secular growth story that I don't think it matters either way.
now we know. It's Richard Griffiths...he has been doing the same at Circassia, funded by sales of Ceres Power (CWR), by the looks of yesterday's RNS there and the large volume going through today. This is excellent news. The Woodford overhang is being worked-off and we have the comfort that Griffiths and his team have done their due diligence and see substantial value in 4D.
Griffiths bought £20mn of Circassia last week so that might be the reason...probably makes sense for him to profit take in some of his winners to pick-up dirt-cheap Woodford stock...
I view it as a positive. Griffiths has provided liquidity to allow other investors, more likely to be proper institutional investors, to start to build their positions.
the most likely buyer will be monitoring management. in situations like this, it's almost always the local managements that have the insight and confidence to bid. The monitoring biz is still just too small for most larger companies to bother with.
So, my money is on an MBO. That doesn't mean they're going to overpay or underpay. It does mean that both managements know each other well and can hopefully get the deal done and dusted with a minimum of fuss and limited risk of it falling out of bed.
See quote below from Endpoints News, the US biotech daily.
Life is still tough for those pursuing fibrosis as a targets into phase 2 & 3. It works two ways for us. On the positive side, the failure of a competitor program increases the potential value of our own. However, too much failure in a therapeutic area causes risk aversion amongst larger biotechs and an unwillingness to licence in.
On balance, I think it’s a positive for us. IPF, NASH, fibrosis is such a large area of unmet need that the big guys will have to keep on paying to play. We are expecting a deal via Pharmaxis by year-end....
“UPDATED: Biogen pulls the plug on prized IPF drug from $562M+ Stromedix buyout”
It's been tough sledging here, with the Woodford overhang and a funding need ahead of us...However, there's nothing wrong with the Microbiome field and 4D's IP and clinical exposure to it. My bet is that the management of 4D, who have seen a thing or two in biotech and capital markets, can clear the Woodford overhang and get this repositioned and on its way, well-funded. Let's see...It's going to be a challenge for them but a lot is in the price.
Today's buying follows on from Friday. We've seen the Circassia overhang clear, are we going to be next??
You’re right. My bad. I can’t see electrolyser element to the contract. I didn't read the full release properly. Still, I guess it all feeds into the hydrogen economy case - particularly when it’s in emerging markets and involves methane/ industrial waste recycling. How the hydrogen generated will be used is perhaps the most relevant question.