RE:RE:RE:RE:A concern? Just speculating based on some threads of evidence and knowing how TH acts and thinks. Basically, when a large shareholder approaches you with an offer to underwrite a deal, small company management teams always struggle to say no. And, while that is understandable, it is often the lazy way out for managememnt and harms shareholder's long term interests if not done well. This is exactly how the ONO occurred. Soleus said they wanted in and would underwrite an offering. At least in this case, I don't think there would be any warrants involved if somethigndoes happen as I don't think those could be offered with a deal done using the ATM.
Also, if this speculation turns out to be true, and such things often do not, we really need to ehar what the company says before reaching the conclusion it was a bad move. That being said, it is the lazy way to get capital raising done when you have failed at properly promoting your share price for a very long time. No one would complain much if they raised money at a higher share price.
SABBOBCAT wrote:
SPCEO, why are you bringing up this concern in the first place? Have you heard whispers or been tapped regarding the ATM?
SPCEO1 wrote: On its face, it would be a terrible idea but we would need to hear what their justification for it would be before drawing a final conclusion. But it would need to be a solid justification where the benefits of rewarding a large shareholder with bargain basement stock has a near immediate and tabgible payoff to other shareholders.
When companies say they have enough cash for the next year, that is just satisfying a regulatory requirement and assumes nothing changes with their business, which is often not a good assumption, particularly for a biotech like TH. You should take very little away from that statement and you can be sure they will raise money if they go on to do a phase II TH-1902 trial.
The loan does not help them at all with the money they need for a phase II TH-1902 trial as the unmarked funds later in the loan's life do not get released until after that trial would likely be started. The next tranche is meant to pay off the rest of the convert.
Raising cash through partnerring at least would be viewed as a knowledgable third party endorsing TH-1902. Acquiring cash through the ATM is just dilution in the eyes of investors.
TH does run with less cash than other biotechs but that is aprtly because theyhave the two legacy drugs generating cash to cover a lot of the expenses most other biotechs have to raise capital for.
PWIB123 wrote: SPCEO1, this would make no sense and would be a terrible idea. THTX just told us on the conference call a few weeks ago that they had enough cash for a year. Plus, they have a pathway via the loan to unlock more cash. Furthermore, it was stated that they expect to see efficacy from at least one cancer type soon. Selling more shares at this price would be a flip flop of what we heard on the conference call and would definitely send a negative signal.
I'm not sure what's worse, partnering too early and not getting paid the highest premium or diluting the company now in order to gain a larger cash reserve. I can imagine institutional investors would like to see more cash on hand with future clinical trials likely, but THTX has communicated they have the cash they need for the foreseable future.
SPCEO1 wrote: I have heard THTX had good meetings with major shareholders post their third quarter results. Should any of those shareholders want to pickup additional shares of THTX, they would likely only do so through an offering. Could THTX sell shares to them via the ATM facility at these low prices. We know companies always find it pretty difficult to turn down alluring new money like this. I would be interested to know how people here feel about such a development should it occur. It would be good to let the company know before they pull the switch on such a deal if they are indeed considering it. We should have a voice in such a decision and we should let them hear it. Now, I am just speculating based on rather narrow info, but I suspect this is a risk. So, let's just assume a deal at $2 per share for 5 million new shares raising the company a new $10 million in equity capital just for argument's sake.
To me, doing such a deal would be quite worrisome as it would seem to indicate the data on TH-1902 is not looking good enough to hold off and do a deal once that data is available. Or, perhaps it indicates the phase 1b is going to take a lot longer than they are currently intimating and they need to boost the cash coffers to bridge until they get there.
On the positive side, we would likely get a new analyst report from Cantor if the ATM was used. But what can a new analyst say before we get phase 1b info.