Monday, February 13, 2012

Here Comes the Stock Offer!

After all the brown-nosing* by the analyst and investment bank community, Alnylam just announced that it has commenced a public offering of 7,000,000 shares. This should net the company around $85,000,000- probably enough for a low-ball offer for Tekmira.

Yes, Alnylam is burning through its cash at a rate of $80M a year, and yes, it is an old adage in biotechnology that you raise capital when the going (= share price) is good. With $260M in the coffers though, the timing would seem overly conservative and given my read on the situation, it is in Alnylam’s best interest to make Tekmira an offer. Valentine’s Day would be good timing for that indeed.

* I’ll wash my finger-tips, but I had to get this off my chest. There are analysts that have been there through good and bad times. Others have understandably been attracted by the positive clinical trial results- OK. But the recent analyst upgrades and Q+A sessions in conference calls were just unbearable with nothing but softballs and the avoidance of tough questions.

5 comments:

Steve said...

You can't fault them for the timing on this, and if they were smart enough (or call it what you will) to get the stock price doubled prior to the stock offering, more power to them.

Steve

RealG said...

'but the recent analyst upgrades and Q+A sessions in conference calls were just unbearable'

out of interest, given the recent data, deals and improved sentiment towards RNA therapy companies, is it not reasonable that analysts will have become more positive?
Furthermore, could the ones that stuck through the bad and the good not also be seen as unobjective? Ie. it's only right to downgrade when things look bad and upgrade when the outlook improves?

(that said, I don't doubt that the brokers have been sucking up too)

Anonymous said...

>>improved sentiment towards RNA therapy companies

Make that company

Dirk Haussecker said...

Yes, the increased interest is justified given de-risking through the TTR01 and PCS02 clinical results. However, these results did not materialize out of nowhere and the mindless bashing of RNAi Rx (meaningless comments like 'delivery unsolved') before that was quite annoying.

The reason why I said 'brown-nosing' is that I got the distinct impression that many just called into the conference calls for the sake of it, to show presence and feign interest. Some may find the science exciting and will see the steady progress in areas like SNALP delivery, but others obviously could not care less and were just interested because of the fees from a financing. I will exempt though the analysts and bankers that take the time to read this blog ;)

Anonymous said...

What are the chances that there might be a bidding war between Alnylam and others, including Merck, to buy Tekmira? Merck was especially angered by Alnylam, and if it could aquire Tekmira, it would not only posess the leading company in RNAI delivery, but would also be in a position to put Alnylam behind the eight ball.

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