Post by luxetvox on Apr 12, 2024 14:11:54 GMT
I've decided to post some of the communication Bill and I are sending to management. Yes, I know that some would say that we are pissing into the wind. That Phil Frost is the king of the jungle until he's 105 or whatever. But, those in such a camp, who also want to talk about the big move from 88 cents to the currently lofty heights of the mid $1.20s, would have to look at the last 10 years of Opko's performance as a company and as a stock, and conclude the obvious. Phil has not gotten the job done.
Elias will soon realize what everyone here, save a single holdout, has known for years. But, as Bill has commented to me, he cannot hear the following message often enough. Sales is about persistence. And, one of these days, our persistence will help, or perhaps cause, Elias to do what he needs to do......lest his trust become worthless.
I expect the usual sniping from the master of Yahoo but, as I have for years, I will consider the source. And move on.
Elias,
I hope you are well. Bill and I have offered many suggestions, both during our January call and through email, ideas that we know will help position the company more favorably with investors. One piece of corporate development news today in biotech serves as a great example of what we’ve been talking about.
Opko’s stock price continues to be controlled by what Steve and Adam view as the new ‘prominent investors’ in the convertible. They are arbitrageurs, period. And their only concern is setting up hedges between their convertible position and the underlying equity. Since March 8, about $250 million par value of the new converts have traded. The vast majority of the stock volume during that time has been either short or long positions set up vs respective long or short trades in the 3.75% convertible. Put another way, nearly all of the trading in the stock is synthetic. That is, a technical rather than fundamental underpinning to the equity volume.
While the arbs have their way on any given day, important news like the sale of the Women’s Health division gets obscured. While not totally overlooked, it is certainly overshadowed by the activity I just mentioned. In fact, such important news as a future cash infusion of $237.5 million dollars, and removal of operating losses, functions only as a catalyst for the arbitrageurs to set up new hedges, based on their adjusted computer modeling of the value of the convertible instrument which now determines the behavior of the stock.
While the fundamental story has perhaps become a bit more clear, a story that you seem anxious to tell, there is still a lot of baggage that weighs down the company, creating noise which is anathema to investors. In contrast, today’s news of the buyout of Alpine Immune Sciences by Vertex Pharmaceuticals is a great example of one possible path in Opko’s future. But a lot needs to happen for that to occur. Ngenla revenues need to ramp, Rayaldee needs to either get more traction or be sold (if you haven’t yet, I urge you to read the updated research from Opko’s street coverage….Rayaldee is viewed as a failure), and BioReference needs to be monetized, either through healthy profitability or sales of the remaining units. And of course, the ModeX pipeline needs further development. Alpine has just one major asset, and that won’t enter phase 3 until later this year. Similar to ModeX having a platform technology, Alpine Immune "offers promise of a ‘pipeline-in-a-product’ in multiple other serious diseases…” (today’s Corporate Presentation from ALPN). And, for the record, ALPN’s capital structure history was not without its problems: the company did a 1-for-4 reverse split in 2017. The company did two secondary offerings, in 2022 and 2023. The most recent was last November, 8.8 million shares at $12.50. Even with those new shares, and 13.6 million sold in 2022, the company today still has only 65.6 million shares outstanding. Revenue is de minimus, and the company is still incurring losses. For the record, investors who bought into the late 2023 secondary at $12.50 have done very well in less than 6 months: the cash buyout is for $65/share.
So who were the investors in that $12.50 secondary? Some were new, some were existing. But here’s where a company like Alpine really distinguishes itself from Opko. Of the top 10 holders of Alpine stock, 8 are Institutional Funds with a focus on Healthcare. The other two are Blackrock and an LP related to the company itself (Alpine ImmunoSciences LP). Here’s a list of the aforementioned Healthcare investors, the largest of which was a new investor in last November’s secondary:
Decheng Capital Management (two different entities)
RA Capital
Lynx1 Capital Management
Great Point Partners
Paradigm BioCapital Advisors
Frazier Life Sciences
Orbited Advisors
This group owns 61% of the outstanding shares of Alpine Immune Sciences. That type of fundamentals-based sponsorship comprises what Wall Street considers ‘prominent investors’, as opposed to that designation given to arbs by Steve and Adam. I don’t mean to be harsh, but they don’t know what they’re talking about.
Let’s look at the Alpine Board of Directors. In addition to the Founder/CEO/COB, Dr Mitchell Gold, there are the following members:
Dr. James Topper Managing Partner, Frazier Healthcare Partners
Robert Conway Past CEO Array Biopharma, acquired by Pfizer
Dr Peter Thompson General Partner, Orbimed Advisors
Christopher Peetz CEO/Founder Mirum Pharmaceuticals (MIRM $1.2 billion market cap)
Dr Cui Xiangmin Managing Director/Founder Decheng Capital and Co-Founder Pan Pacific Pharmaceuticals
Natasha Hernday Chief Business Officer Seagen, acquired by Pfizer
Dr Jorn Drappa. Past Exec VP R&D Horizon Therapeutics, acquired by Amgen; Past Chief Medical Officer Ventyx Biosciences
So the Board of Directors is entirely a mix of investors with an enormous amount of capital committed to ALPN, two with public company CEO experience, and two seasoned healthcare executives with first hand experience in monetization through buyout.
Unlike Alpine, Opko does not have even a single large institutional healthcare investor, not does it have any legacy members of the BOD with the kind of perspective and expertise of the high quality group at Alpine.
No serious healthcare fund will invest in Opko while the cap structure is as bloated as it still is, even after the recent buyback. Nor will groups like Orbimed, Frazier, or RA Capital put their money behind a company with a board as it is currently comprised. Despite Dr. Frost’s praise of the Board during the annual meeting, it is common knowledge that only you and Dr Nabel command the kind of respect that is required for deep pocketed investors to make monetary commitments. And finally, the most obvious fact, difficult to hear and perhaps more so to accept: as long as Phil Frost is in charge and exercises control, the financial and intellectual horsepower in the Healthcare sector will avoid Opko stock.
Your admirable efforts and accomplishments with Merck and BARDA and LabCorp have had little if any positive effect on the stock price. And that is unfortunate. But the reason for that disconnect is clear. Change is needed, and the sooner the better. The decline in your net worth after a marriage with Phil Frost is all the proof you need.
I remain committed to trying to help you overcome the challenges created by the consequences of poor decisions of legacy management. My dinner offer stands. I hope you will consider it.
Elias will soon realize what everyone here, save a single holdout, has known for years. But, as Bill has commented to me, he cannot hear the following message often enough. Sales is about persistence. And, one of these days, our persistence will help, or perhaps cause, Elias to do what he needs to do......lest his trust become worthless.
I expect the usual sniping from the master of Yahoo but, as I have for years, I will consider the source. And move on.
Elias,
I hope you are well. Bill and I have offered many suggestions, both during our January call and through email, ideas that we know will help position the company more favorably with investors. One piece of corporate development news today in biotech serves as a great example of what we’ve been talking about.
Opko’s stock price continues to be controlled by what Steve and Adam view as the new ‘prominent investors’ in the convertible. They are arbitrageurs, period. And their only concern is setting up hedges between their convertible position and the underlying equity. Since March 8, about $250 million par value of the new converts have traded. The vast majority of the stock volume during that time has been either short or long positions set up vs respective long or short trades in the 3.75% convertible. Put another way, nearly all of the trading in the stock is synthetic. That is, a technical rather than fundamental underpinning to the equity volume.
While the arbs have their way on any given day, important news like the sale of the Women’s Health division gets obscured. While not totally overlooked, it is certainly overshadowed by the activity I just mentioned. In fact, such important news as a future cash infusion of $237.5 million dollars, and removal of operating losses, functions only as a catalyst for the arbitrageurs to set up new hedges, based on their adjusted computer modeling of the value of the convertible instrument which now determines the behavior of the stock.
While the fundamental story has perhaps become a bit more clear, a story that you seem anxious to tell, there is still a lot of baggage that weighs down the company, creating noise which is anathema to investors. In contrast, today’s news of the buyout of Alpine Immune Sciences by Vertex Pharmaceuticals is a great example of one possible path in Opko’s future. But a lot needs to happen for that to occur. Ngenla revenues need to ramp, Rayaldee needs to either get more traction or be sold (if you haven’t yet, I urge you to read the updated research from Opko’s street coverage….Rayaldee is viewed as a failure), and BioReference needs to be monetized, either through healthy profitability or sales of the remaining units. And of course, the ModeX pipeline needs further development. Alpine has just one major asset, and that won’t enter phase 3 until later this year. Similar to ModeX having a platform technology, Alpine Immune "offers promise of a ‘pipeline-in-a-product’ in multiple other serious diseases…” (today’s Corporate Presentation from ALPN). And, for the record, ALPN’s capital structure history was not without its problems: the company did a 1-for-4 reverse split in 2017. The company did two secondary offerings, in 2022 and 2023. The most recent was last November, 8.8 million shares at $12.50. Even with those new shares, and 13.6 million sold in 2022, the company today still has only 65.6 million shares outstanding. Revenue is de minimus, and the company is still incurring losses. For the record, investors who bought into the late 2023 secondary at $12.50 have done very well in less than 6 months: the cash buyout is for $65/share.
So who were the investors in that $12.50 secondary? Some were new, some were existing. But here’s where a company like Alpine really distinguishes itself from Opko. Of the top 10 holders of Alpine stock, 8 are Institutional Funds with a focus on Healthcare. The other two are Blackrock and an LP related to the company itself (Alpine ImmunoSciences LP). Here’s a list of the aforementioned Healthcare investors, the largest of which was a new investor in last November’s secondary:
Decheng Capital Management (two different entities)
RA Capital
Lynx1 Capital Management
Great Point Partners
Paradigm BioCapital Advisors
Frazier Life Sciences
Orbited Advisors
This group owns 61% of the outstanding shares of Alpine Immune Sciences. That type of fundamentals-based sponsorship comprises what Wall Street considers ‘prominent investors’, as opposed to that designation given to arbs by Steve and Adam. I don’t mean to be harsh, but they don’t know what they’re talking about.
Let’s look at the Alpine Board of Directors. In addition to the Founder/CEO/COB, Dr Mitchell Gold, there are the following members:
Dr. James Topper Managing Partner, Frazier Healthcare Partners
Robert Conway Past CEO Array Biopharma, acquired by Pfizer
Dr Peter Thompson General Partner, Orbimed Advisors
Christopher Peetz CEO/Founder Mirum Pharmaceuticals (MIRM $1.2 billion market cap)
Dr Cui Xiangmin Managing Director/Founder Decheng Capital and Co-Founder Pan Pacific Pharmaceuticals
Natasha Hernday Chief Business Officer Seagen, acquired by Pfizer
Dr Jorn Drappa. Past Exec VP R&D Horizon Therapeutics, acquired by Amgen; Past Chief Medical Officer Ventyx Biosciences
So the Board of Directors is entirely a mix of investors with an enormous amount of capital committed to ALPN, two with public company CEO experience, and two seasoned healthcare executives with first hand experience in monetization through buyout.
Unlike Alpine, Opko does not have even a single large institutional healthcare investor, not does it have any legacy members of the BOD with the kind of perspective and expertise of the high quality group at Alpine.
No serious healthcare fund will invest in Opko while the cap structure is as bloated as it still is, even after the recent buyback. Nor will groups like Orbimed, Frazier, or RA Capital put their money behind a company with a board as it is currently comprised. Despite Dr. Frost’s praise of the Board during the annual meeting, it is common knowledge that only you and Dr Nabel command the kind of respect that is required for deep pocketed investors to make monetary commitments. And finally, the most obvious fact, difficult to hear and perhaps more so to accept: as long as Phil Frost is in charge and exercises control, the financial and intellectual horsepower in the Healthcare sector will avoid Opko stock.
Your admirable efforts and accomplishments with Merck and BARDA and LabCorp have had little if any positive effect on the stock price. And that is unfortunate. But the reason for that disconnect is clear. Change is needed, and the sooner the better. The decline in your net worth after a marriage with Phil Frost is all the proof you need.
I remain committed to trying to help you overcome the challenges created by the consequences of poor decisions of legacy management. My dinner offer stands. I hope you will consider it.
