Take a look at SNPX. $37.5mm in cash at year end (they closed on a $15mm preferred in Nov) with 7.35 million shares of common. Phase 2 came back in Jan with inconclusive findings ie. not statistically significant. Mgt announced this month the obligatory, "we are encouraged, blah, blah, blah, we are reviewing strategic options, blah, blah " Cash burn is a little under $3mm/qtr before the Phase 2 findings, so perhaps they can shrink that headcount on that failure. And the company is left with about $3 cash per share (assuming the preferred is repaid in full), and the stock is trading at $0.84 or about a >70% discount.
Thanks for the idea. The PR notes the company is looking at "potential acquisition of asset rights or funding trials for other assets". It doesn't sound like they are intent on returning cash or doing a merger, etc. I also couldn't see any workforce reduction since the readout. What makes you think shareholders will realise the value of the cash? Or is this more of a basket-type bet for you?
It's more of a basket-type. I don't have any great insight other than I read the Preferred had terms that required a repayment starting Q1, which is why I modeled that they would just pay off the preferred completely rather than retain that cash
In the press release, I read "Cyteir is reducing headcount by approximately 70% and deferring research and development in other areas, which is expected to extend Cyteir’s cash runway into 2026".
This seems to suggest that WITH the reduction in costs the cash will run until 2026, so that would mean a much higher cash burn than the 20 MM you suggest, right? Should be at least double with the 147 MM they have in cash.
Take a look at SNPX. $37.5mm in cash at year end (they closed on a $15mm preferred in Nov) with 7.35 million shares of common. Phase 2 came back in Jan with inconclusive findings ie. not statistically significant. Mgt announced this month the obligatory, "we are encouraged, blah, blah, blah, we are reviewing strategic options, blah, blah " Cash burn is a little under $3mm/qtr before the Phase 2 findings, so perhaps they can shrink that headcount on that failure. And the company is left with about $3 cash per share (assuming the preferred is repaid in full), and the stock is trading at $0.84 or about a >70% discount.
Thanks for the idea. The PR notes the company is looking at "potential acquisition of asset rights or funding trials for other assets". It doesn't sound like they are intent on returning cash or doing a merger, etc. I also couldn't see any workforce reduction since the readout. What makes you think shareholders will realise the value of the cash? Or is this more of a basket-type bet for you?
It's more of a basket-type. I don't have any great insight other than I read the Preferred had terms that required a repayment starting Q1, which is why I modeled that they would just pay off the preferred completely rather than retain that cash
Excellent piece. I appreciate your approach and cutting the info down to what's integral to the thesis.
Thanks Devin!
In the press release, I read "Cyteir is reducing headcount by approximately 70% and deferring research and development in other areas, which is expected to extend Cyteir’s cash runway into 2026".
This seems to suggest that WITH the reduction in costs the cash will run until 2026, so that would mean a much higher cash burn than the 20 MM you suggest, right? Should be at least double with the 147 MM they have in cash.
What am I missing here?
These statements are often very "defensive" as to when the co will run out of cash, you can see the same pattern in other broken biotechs