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Post by actcfan on Aug 8, 2016 13:50:37 GMT
Jck, I am new to this one. It appears this deal grants worldwide rights to the entire Pracinostat program, correct? Is the remaining pipeline very valuable in your view? From the website it looks like they have 2 Phase 1 programs. Thanks www.meipharma.com/our-programs
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Post by jckrdu on Aug 8, 2016 14:01:51 GMT
Jck, I am new to this one. It appears this deal grants worldwide rights to the entire Pracinostat program, correct? Is the remaining pipeline very valuable in your view? From the website it looks like they have 2 Phase 1 programs. Thanks www.meipharma.com/our-programsCorrect.
Rest of pipeline is early stage as you noted, but I believe there's good value there. At least more than the current $80M market cap the company is trading at on this news... which is still close to cash levels.
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Post by actcfan on Aug 8, 2016 14:08:17 GMT
Thanks jck. You make a compelling argument and the potential milestone payments alone you'd think should command a higher valuation, just trying to learn related to the pipeline since I haven't been following.
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dave
Junior Member
Posts: 87
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Post by dave on Aug 8, 2016 15:51:47 GMT
not only upfront payment but 5 million on first patient treated. also prelim data from rest of pipeline will encourage rising sp.
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Post by selluwud on Aug 8, 2016 16:50:12 GMT
I imagine any hold over long term shareholders from March 2015 that averaged down may be bailing out while the gettin's good after waiting so long to make some of their losses back. It may take a while to clear out the bag holders.
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Post by jckrdu on Aug 8, 2016 17:18:30 GMT
I imagine any hold over long term shareholders from March 2015 that averaged down may be bailing out while the gettin's good after waiting so long to make some of their losses back. It may take a while to clear out the bag holders. Agree. I hope it'll start to move back-up once the initial wave of heavy selling/profit taking is done. Major buyers (20% of the float in first half of day) are buying at $2ish thinking its going higher.
Hard for me to sell any when its trading at $2... the value of their cash on hand.
Hopefully, today is the start of a multi-day run somewhat similar to what we saw with ADXS... all the gains didn't come on day 1 of the news.
Should start seeing more PRs on the 2 trials guided to start last month in Q2 2016.... along with some analyst upgrades which hopefully drives more interest.
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Post by Macgruber on Aug 8, 2016 20:30:22 GMT
Well this was a rather underwhelming day for the share price in light of all the good news. Just listened to the call and heres what I took from it. Someone correct me if I'm misunderstanding things
-Partnership is for both MDS and AML. -There is a 5 million investment in equity, In addition to the 15 mil upfront, and 5 mil after first patient dose. -Cost bases for equity investment is based on a "look back and forward looking VWAP over ten days starting today, so the price will be set later on in the week" . -444 million in Milestones based on NDA approval for both indications and sales there after. -Helsinn takes over all development and commercialization rights for prac world wide. -Royalties supposedly tiered starting in high teens in us, and single digits world wide. -Apparently they chose Helsinn because of their experience in combo drugs with Azacitidine in the hematological cancer sector.
With this nearly trading at cash and two partnered candidates one of which is phase 3 (AML), I think I'm gonna hold here and look to add around or under $2. Should see a slow build in the share price over the next 6 months imo. Good luck to those still holding and congrats to those who sold.
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Post by RLC on Aug 8, 2016 20:31:13 GMT
In an undisciplined move, I made another small purchase at $2.05 EOD today. I really can't believe this didn't get more lift today... even with the rough history.
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Post by Macgruber on Aug 8, 2016 20:40:12 GMT
In an undisciplined move, I made another small purchase at $2.05 EOD today. I really can't believe this didn't get more lift today... even with the rough history. I did too. Was telling myself id lock in profits and move on this am and did the opposite, friggen raised my average way up to $2 and cannibalized most my gains. Just seems so oversold, I couldn't help myself
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Post by RLC on Aug 9, 2016 3:31:29 GMT
Whats a good plan for cashing in Jck? I know you have one. Hey Selluwud,
I'm going to see how it trades today, but right now I'm not planning on selling any until $5ish. Some thoughts...
It's currently trading at $2.30ish (up almost 50%). That's a market cap of about $75M.
But, they now have close to $70M cash on the balance sheet, which means at $2.30ish they're still only trading at cash... with their Phase 3 trial paid for and $444M in milestone payments coming.
IMO, $4-$6ish is more reasonable. I'm not going to sell any until I see $5ish (at least $4), which would be a $170M market cap. With $70M cash on hand, that gives a $100M valuation to the pipeline, which still seems low to me.
They'll be some selling/profit taking early today. I'm hoping it trends up in the days/weeks ahead to where I think it should be valued.
Any idea how the $5 million equity purchase will work? Is it an open market purchase? Or are they going to be bumping the OS count up a bit?
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Post by RLC on Aug 9, 2016 12:39:22 GMT
Well this was a rather underwhelming day for the share price in light of all the good news. Just listened to the call and heres what I took from it. Someone correct me if I'm misunderstanding things -Partnership is for both MDS and AML. -There is a 5 million investment in equity, In addition to the 15 mil upfront, and 5 mil after first patient dose. -Cost bases for equity investment is based on a "look back and forward looking VWAP over ten days starting today, so the price will be set later on in the week" . -444 million in Milestones based on NDA approval for both indications and sales there after. -Helsinn takes over all development and commercialization rights for prac world wide. -Royalties supposedly tiered starting in high teens in us, and single digits world wide. -Apparently they chose Helsinn because of their experience in combo drugs with Azacitidine in the hematological cancer sector. With this nearly trading at cash and two partnered candidates one of which is phase 3 (AML), I think I'm gonna hold here and look to add around or under $2. Should see a slow build in the share price over the next 6 months imo. Good luck to those still holding and congrats to those who sold. Helsinn really seems like a terrific partner from a synergy standpoint. As you mentioned, they have experience in paring a drug with Azacitidine and will likely have a good network of doctors one phone call away to get Pracinostat to patients ASAP. And they have a huge global footprint, "70 commercial partners in 90 countries and a large salesforce having relationships with many of the same physicians prescribing Azacitidine." "There were number of companies interested in the program, but none of them met each of these criterion better than Helsinn". -- Sounds to me like they had multiple suitors to choose from.
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Post by RLC on Aug 9, 2016 13:04:32 GMT
Hey Selluwud,
I'm going to see how it trades today, but right now I'm not planning on selling any until $5ish. Some thoughts...
It's currently trading at $2.30ish (up almost 50%). That's a market cap of about $75M.
But, they now have close to $70M cash on the balance sheet, which means at $2.30ish they're still only trading at cash... with their Phase 3 trial paid for and $444M in milestone payments coming.
IMO, $4-$6ish is more reasonable. I'm not going to sell any until I see $5ish (at least $4), which would be a $170M market cap. With $70M cash on hand, that gives a $100M valuation to the pipeline, which still seems low to me.
They'll be some selling/profit taking early today. I'm hoping it trends up in the days/weeks ahead to where I think it should be valued.
Any idea how the $5 million equity purchase will work? Is it an open market purchase? Or are they going to be bumping the OS count up a bit? Sounds to me like MEIP will be issuing the shares, so a bump in OS (It really isn't a huge dilution event... ~7% I believe): "Simultaneously with the entry into the Agreement on August 5, 2016, MEI Pharma entered into a Common Stock Purchase Agreement (the “Equity Agreement,” and together with the Agreement, the “Agreements”) with Helsinn Investment Fund SA (the “Purchaser”). Pursuant to the terms of the Equity Agreement, the Purchaser has agreed to purchase and the Company has agreed to issue a number of shares of the Company’s common stock (the “Shares”) determined by dividing $5,000,000 by the Bloomberg volume weighted-average price for shares of the Company’s common stock on the NASDAQ Global Select Market for the ten trading day period beginning on August 1, 2016 and ending on August 12, 2016, rounded to the nearest whole share."I wonder if Helsinn is actively shorting the company to suppress the share price to lower the cost of the equity investment to them. Would make sense to me...
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Post by jckrdu on Aug 9, 2016 13:15:55 GMT
Any idea how the $5 million equity purchase will work? Is it an open market purchase? Or are they going to be bumping the OS count up a bit? Sounds to me like MEIP will be issuing the shares, so a bump in OS (It really isn't a huge dilution event... ~7% I believe): "Simultaneously with the entry into the Agreement on August 5, 2016, MEI Pharma entered into a Common Stock Purchase Agreement (the “Equity Agreement,” and together with the Agreement, the “Agreements”) with Helsinn Investment Fund SA (the “Purchaser”). Pursuant to the terms of the Equity Agreement, the Purchaser has agreed to purchase and the Company has agreed to issue a number of shares of the Company’s common stock (the “Shares”) determined by dividing $5,000,000 by the Bloomberg volume weighted-average price for shares of the Company’s common stock on the NASDAQ Global Select Market for the ten trading day period beginning on August 1, 2016 and ending on August 12, 2016, rounded to the nearest whole share."I wonder if Helsinn is actively shorting the company to suppress the share price to lower the cost of the equity investment to them. Would make sense to me... Yes, that's my take... a small dilution. Price they'll make the investment at is the weighted average pps from 8/1 - 8/12. With close to 9 million shares traded yesterday over $2, the pps they'll invest at should be over $2. So maybe another 2.5M shares issued at $2ish. About 7% dilution at a much higher pps than MEIP was trading at over the past 6 months ($1.30s - $1.40s).
$70M market cap (cash value) and an equity investment at $2+ are reasons to believe $2ish should be the bottom.
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Post by jckrdu on Aug 9, 2016 14:12:15 GMT
Disclosure: I sold some MEIP this morning to lock in gains and diversify, as MEIP had become a large percentage of my holdings after the run from my average cost in the $1.30s to over $2.
Still holding a large position for news: Start of 2 trials guided to start in Q2 2016, upgrades by analysts with higher price targets, news of completion of equity investment by the new partner... likely to come sometime early next week at a pps over $2, which IMO could be a catalyst.
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Post by actcfan on Aug 9, 2016 14:16:12 GMT
Despite all the potential, I think you are smart to lock in profits jck. This is not trading well so far after this deal.
I wonder if that may be the nature of biotech investors, who don't generally get excited by P1 programs? Still there is a lot of potential value coming based on the P3 programs just partnered - maybe investors see that upside as having a ceiling now? I guess I just don't understand the reaction here so I've been staying on the sidelines.
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Post by jckrdu on Aug 9, 2016 14:24:01 GMT
Despite all the potential, I think you are smart to lock in profits jck. This is not trading well so far after this deal. I wonder if that may be the nature of biotech investors, who don't generally get excited by P1 programs? Still there is a lot of potential value coming based on the P3 programs just partnered - maybe investors see that upside as having a ceiling now? I guess I just don't understand the reaction here so I've been staying on the sidelines. Agree. I thought it would be trading a lot higher. Maybe it still will in the hours/days/weeks/ahead. I still like the risk/reward at $2ish as that's cash value, so I can't see it falling too far below that. Should be trading higher, but it isn't. I'll hold my remaining (still rather large) position for the news items that I previously mentioned that we know are coming.
Wanted to free up some cash to invest elsewhere.
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Post by RLC on Aug 9, 2016 14:31:43 GMT
Disclosure: I sold some MEIP this morning to lock in gains and diversify, as MEIP had become a large percentage of my holdings after the run from my average cost in the $1.30s to over $2. Still holding a large position for news: Start of 2 trials guided to start in Q2 2016, upgrades by analysts with higher price targets, news of completion of equity investment by the new partner... likely to come sometime early next week at a pps over $2, which IMO could be a catalyst. Based on it having been ~70% of your portfolio, agree that was likely a smart move. I still feel like this company has incredible potential and is drastically undervalued. It was about 25% of my portfolio and is now closer to 30% after my purchase yesterday. If it stays under $2 for long... I'll likely make another small purchase.
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Post by jckrdu on Aug 9, 2016 14:58:50 GMT
I like the flag pattern forming on the 5 day and 3 month charts. Further consolidation at $2ish will be a bullish sign.
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Post by jckrdu on Aug 12, 2016 19:38:05 GMT
I like the flag pattern forming on the 5 day and 3 month charts. Further consolidation at $2ish will be a bullish sign. Bullish consolidation continued at $2ish all week.
Massive flag pattern on 3 month and 1 year chart points to a breakout to $2.60ish when it happens.
They're presenting at a conference next week. Should get some news on the other 2 trials guided to start in Q2, which could be a catalyst.
Poster on StockTwits (link below... you'll need to scroll down to yesterday's posts) calculated the equity purchase pps. Based on volume and closing prices over the past 2 weeks, looks like the $5M equity investment will be done at a $1.88ish pps... resulting in about 8% dilution, 2.7M shares.
I don't think the market is going to have a problem with that news, as its still trading at just a little over cash value, with no value assigned to the $444M milestone payments, or the other drugs in their pipeline.
www.stocktwits.com/symbol/MEIP?q=meip
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Post by jckrdu on Aug 16, 2016 14:32:46 GMT
I decided to lock in my approximate 50% gain and sold my remaining position in MEIP this morning between $2.00 and $2.05. Was hoping for more. I listened to the webcast this morning (link below), and while the news is still very promising for the longer-term, I don't see more major near-term catalysts besides the start of 2 Phase 1 trials in September, which normally are not pps moving catalysts. There still could be some analyst upgrades and more institutional buying coming, but I'm not sure how much more it'll run (if it does) in the near-term. Other reasons for my decision to lock in gains are listed below... - The Phase 3 Prac trial was guided to take 2.5 years to complete enrollment, and another 1.5 years before releasing results. - MEIP will have to help fund the Phase 2 MDS trial - No clarity given on when the $444M milestone payments will start flowing. They could be more back-ended. - Small dilutive SEC filing will be released for the partner's equity investment, which will be done at $1.90ish, which is lower than the current pps. Market may not like that news now that the partnership news has been released. investor.meipharma.com/2016-08-10-MEI-Pharma-to-Present-at-Wedbush-PacGrow-Healthcare-Conference
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