ASND reports 2Q23 loses - ASND versus OPK as of 09-05-23

You are apparently forgetting two very critical things. First is the $150 million they will be receiving from Royalty Pharma for a percentage of future Skytrofa revenue. Second is the point I've made many times about the importance of healthy cap structure. If the latter is mismanaged, and allowed to become bloated, a company can end up with an astronomical number of shares (like OPK), or an astronomical amount of debt compared to its asset and/or revenue base (like NVTA; see my most recent post here: opkodd.com/thread/10922/nvta). If, however, company management exercises extreme prudence on behalf of shareholders and is vigilant about maintaining a lean cap structure (like ASND), then there are many options at their disposal.

The royalty arrangement just cited is just one method of raising capital. But, since there's very little fat in the cap structure of ASND, management has other choices as well. You mentioned the share count; 57.3 million shares is, well, it's really nothing. The last equity raise was two years ago, on 9/1/21, when ASND sold a mere 2.88 million shares at $160. Was it a good deal for share buyers? On the surface no; at least not yet. ASND does also have $575 million in convertibles., a 2.25% coupon due 4/28. This was issued on 3/25/22, based on a stock price of $116.73. The conversion price was $166.34, a 42.5% premium at the time. With the stock's close today at ~$104, the premium has increased to ~51%. Oh, and by the way, the company CEO did NOT give the convertible buyers (aka arbitrageurs) millions of shares of stock to short against their long convert position (i.e., unlike Opko, who gave Jefferies' group of 'investors' a way to hedge their initial position with ZERO risk, insulated from moves in the stock price; the risk in the Opko convertible issuance was, and still is, borne by shareholders, aka the company owners).

So, ASND has a tremendous amount of flexibility. With the stock at ~$104 today, they could price 3 million shares 'in the hole' at $100 (but would likely be higher), and raise $300 million before WS fees, and only dilute existing shareholders by 5.2%. 60 million shares for a biotech projecting 165-170 million euros in 2023 revenue is still a very lean equity component. And they have several drugs in Phase 2.

Now, to your tables....ugh. Here we go again. OPK was up over this time frame, ASND was down over that time period....and so on , and so on. OPK was making a high (lol), ASND was making a low.....blah blah. Over the last 52 weeks, ASND has returned exactly 18% to shareholders. Opko? Well, coincidentally it's down almost that exact amount, whacking owners with a negative 16.98% return. You've implied before how ASND perhaps didn't have new shareholders' best interests in mind when they did the 2.88 million share secondary at $160 on 9/1/21. One might conclude that, given the 35% drop in the stock price since then. Maybe Opko should have sold stock on 9/1/21 as well, when the stock closed at $3.85. For existing shareholders, that would have been a nice price to raise money vs the equity raise at $1.50 on 10/24/19. Because the total return since then has been negative 54.29%, 1900 basis points lower than that for ASND over these last two years.

On 10/24/19 Opko sold 50 million shares at $1.50, because the company HAD TO. On 9/1/21, ASND sold 2.88 million shares at $160, because management determined that they COULD.

ASND ain't running out of cash, your projections notwithstanding. All of these facts account for one company having a $6 billion market cap, and the other $1.36 billion.

Oh yeah, a year ago when you wanted me to bet you where Opko and Ascendis would be by this or that date, I didn't fall for it because it was a distraction. I recall that Opko was $2.14 that day (I wrote it down); today it's $1.76. ASND was $102.40; today it's a bit more than a point higher. I'll leave the high level math to you. What is not a distraction is the fact that Opko closed at $4.24 on 1/21/22, a Friday. After hours, before a weekend, our management dropped the CRL bomb. Classy. Since that date, the CRL was addressed by Pfizer (thank heavens) and the drug approved. Also, Opko sold its genomics subsidiary, while for much less than what it was worth, the company did get $150 million in cash up front, $115 after taxes. Opko management also decided to buy a company that was essentially spun out of Sanofi, with a very exciting if early drug pipeline, and what appears to be a group of world class scientists. The two leaders of that company then monetized their most advanced drug candidate, by selling its rights to Merck, receiving $50 million up front (less after Sanofi's cut, but a substantial sum nonetheless). Odd then, that from that $4.24 data point, even after a series of several important and significant positive developments, the stock price has dropped 58.5%, to $1.76.

I wonder why. It seems counterintuitive. Until you think about it.

And your point is exactly what? No really, what are you getting at? ASND is not viable as a company because of cash burn? Is that what you're saying? Or perhaps there is some other subtle conclusion that escapes everyone, including the investors ascribing a $6 billion market cap to ASND, but that you have divined from your observation. We can all add; we know the current cash, and the retrospective burn. What we don't know is what the next year's worth of Skytrofa's sales will generate, or require, in terms of cash. And neither do you. 




I refuse to take advantage of handicapped handicappers.




I have no interest in playing a game of goal post moving. $1.72, right now, over 50% lower than the pre-CRL price is the only thing that is....how would you put it?.....relevant. Claiming % moves in a penny stock are significant, or legitimate data when compared to % moves in a triple digit stock.....that is an indicator of the seriousness of your position.




Try reading my post again....."up front" means what it says. If you need the definition, lmk




Might be worth checking the ol' math ....."As of June 30, 2023, Ascendis Pharma had cash, cash equivalents, and marketable securities totaling €431.1 million compared to €742.9 million as of December 31, 2022." Maybe I'm wrong, but that appears to be a cash burn of 312 million Euros over 6 months. And, while we're on the subject of the $150 million, I am curious about the language of the royalty agreement. I can't say for certain, but it looks like ASND structured the deal so that they get the cash now in exchange for royalties that begin on 1/1/25, which is the future. If that is indeed what the terms are, I think it's pretty darn savvy on the part of Ascendis management. Sort of the opposite of Wimpy's proposition "I'll gladly pay you on Tuesday for a hamburger today." Which is what Sema4 offered Opko for part of the sale price of GeneDx, and Frosty grabbed it. So Ascendis is getting $150mm USD, has the flexibility to raise several hundred million in a heartbeat, and 8.3 months of runway (431 million euros/52 million euros monthly burn)......assuming no improvement in burn rate going forward, which is not intuitive if Skytrofa sales continue to grow as forecast. An enviable position to be sure.

All of the above add up to a company that has managed finances fairly well, managed financial structure in conservative fashion, and has started delivering tangible results. Which leads to a respectable valuation. That's my point. What's yours?




I recall when you were comparing Opko's YTD performance with that of CMG. The latter was run by a guy selling burritos, etc.....As of this moment, the former has returned 38.8%, the latter 40.9%. But the 200 basis point outperformance of the commodity taco maker thus far this year isn't nearly as.....relevant, do I have that right?.....as what the 40.9% represents in additional market cap. Allow me: it's $15.65 BILLION. If you've got the right captain, crew, and engines, you can turn a battleship faster than a Hobie Cat. OTOH, if your captain is Mr Howell, and your crew is the Professor and Marianne, you end up on Gilligan's Island.