I forgot to add information about the major shareholders. Per most recent disclosures, Orbimed owns 40.6% and Foresite owns a further 12.6%. A number of other biotech funds are on the register. Hopefully this bodes well for a good outcome.
Interesting workout you have here. There's certainly room for some Shakespearean 'to be or not to be ' quote here. Not quite my cup of tea, but I'm looking forward to seeing how this plays out.
Hi, great post. I have not looked at the details but have you looked at whether they have any lease liabilities? They will have to pay them if they decide to liquidate. Also, they are probably engaging with an investment bank and there is usually a significant fee to include in your calculations (but that may be repaid from the sale of their assets)
Hi George, the lease liabilities are on the balance sheet ($3.8MM as of Q2). My liquidation estimate factors in full repayment of the $3.8MM. I think THRX may be able to realise some savings on the lease liabilities though; for example, they could sublease the property or pay a fee to break the lease potentially. Yes, there will be investment bankers and lawyers to pay, but I'm factored that in to my estimate of $15MM of winddown costs.
Thank you for this. I just had a look at their 10K because for some reason leases tend to be sometimes costed a bit less in the balance sheets. Page 147 of the 10K shows 5.2M and "Less: imputed interest" takes it down to 3.9M. I am not sure if that interest needs to be subtracted but anyway it is a fairly small amount. We may need to wait on this until they make their intentions a bit more clear. I have tried this thinking 4 times in the past with mixed results
How likely is Tang's new $4 deal to get done? at current px of $4 we get free CVR upside. How likely is this to get done at $4 and what are the chances we get anything from the CVR? Thanks
Great writeup. Played out right on point. Do not see them not hitting the top of that 3.90-4.05 cash range. Any view as to what the CVR could be worth, interesting that only 6mo, alot shorter than most of Tang's CVRs, maybe some sort of plan out there for the assets.
I think it’s best to assume the CVR is worth zero. I guess there’s a small possibility that some savings are realised, but I find it hard to see how they sell the biotech IP. I sold my position for $4.05.
Just thought it was funky that traded above 4.05(all the way up to 4.19) for 3 days until larger vanilla seller came in at start of year. Maybe just year end short covering, holding and taking a chance. Good luck to you in the new year.
An important update on this situation: Kevin Tang has made a non-binding offer for $3.80 per share plus CVR (for 80% of net proceeds of THRX’s programs: https://www.sec.gov/Archives/edgar/data/1745020/000121465923015548/d1124230sc13d.htm
Meanwhile Orbimed and Foresite have also sent the board a non-binding EOI for a privatisation offer, without disclosing a price: https://www.sec.gov/Archives/edgar/data/1745020/000095014223002837/eh230423669_ex01.htm
These are very positive developments as it means the company will almost certainly be sold, removing the risk of a bad reverse merger.
I forgot to add information about the major shareholders. Per most recent disclosures, Orbimed owns 40.6% and Foresite owns a further 12.6%. A number of other biotech funds are on the register. Hopefully this bodes well for a good outcome.
Interesting workout you have here. There's certainly room for some Shakespearean 'to be or not to be ' quote here. Not quite my cup of tea, but I'm looking forward to seeing how this plays out.
I had to do a double take after reading that name!
Hi, great post. I have not looked at the details but have you looked at whether they have any lease liabilities? They will have to pay them if they decide to liquidate. Also, they are probably engaging with an investment bank and there is usually a significant fee to include in your calculations (but that may be repaid from the sale of their assets)
Hi George, the lease liabilities are on the balance sheet ($3.8MM as of Q2). My liquidation estimate factors in full repayment of the $3.8MM. I think THRX may be able to realise some savings on the lease liabilities though; for example, they could sublease the property or pay a fee to break the lease potentially. Yes, there will be investment bankers and lawyers to pay, but I'm factored that in to my estimate of $15MM of winddown costs.
Thank you for this. I just had a look at their 10K because for some reason leases tend to be sometimes costed a bit less in the balance sheets. Page 147 of the 10K shows 5.2M and "Less: imputed interest" takes it down to 3.9M. I am not sure if that interest needs to be subtracted but anyway it is a fairly small amount. We may need to wait on this until they make their intentions a bit more clear. I have tried this thinking 4 times in the past with mixed results
How likely is Tang's new $4 deal to get done? at current px of $4 we get free CVR upside. How likely is this to get done at $4 and what are the chances we get anything from the CVR? Thanks
Great writeup. Played out right on point. Do not see them not hitting the top of that 3.90-4.05 cash range. Any view as to what the CVR could be worth, interesting that only 6mo, alot shorter than most of Tang's CVRs, maybe some sort of plan out there for the assets.
I think it’s best to assume the CVR is worth zero. I guess there’s a small possibility that some savings are realised, but I find it hard to see how they sell the biotech IP. I sold my position for $4.05.
Just thought it was funky that traded above 4.05(all the way up to 4.19) for 3 days until larger vanilla seller came in at start of year. Maybe just year end short covering, holding and taking a chance. Good luck to you in the new year.