Stock ticker GERN Summary of news out yesterday below: US doctors have begun the first official trial of using human embryonic stem cells in patients after getting the green light from regulators. The Food and Drug Administration has given a license to Geron to use the controversial cells to treat people with spinal injuries. The cells have the potential to become many of the different cell types found in the body, including nerve cells. http://www.bbc.co.uk/news/health-11517680 http://finance.yahoo.com/q/ks?s=GERN+Key+Statistics I love this idea and I am fairly convinced it will bear fruition in our lifetimes, but is it investable? What do our resident analysts say? I’m expecting the answer to be it’s all about buying the dream not the reality. Is this the right horse to back?
i wouldn’t touch it. no track record, no understanding of the product, no idea whatsoever on the intrinsic value.
It’s an extremely interesting treatment; stem cells will mostlikely be the next “big thing” in health care. I agree with Frank, couldn’t invest in them at the moment.
So it’s in stage 1 trials? I forget the numbers, but the probability of getting a winning drug out of stage 1 is extremely low. It’s like a funnel – lots of drugs in pre-clinical, then some get cut on the way to stage 1, then a bunch more get cut before stage 2, etc. I’m not a biotech guy, but these are hard to “invest” in, especially this early in the game. If the drug doesn’t work, the company burns through your cash and the stock is almost worthless (company either goes under, has to dilute you with a secondary, or sells to another company at a low valuation). If the drug is approved, the stock goes up 100x or whatever. So you would do a probability adjusted valuation – if you think based on the size of market the company talks about or you determine that the stock would be worth $100 if the drug works, and you think there’s a 10% chance of that happening, the stock is fairly valued at $10 (100*.1 + 0*.9 + any cash but I’m going to ignore that for this example). The problem is that with such an experimental drug, you have no idea how much it could be worth if it works or what the probability is. This is like putting your money on red and spinning the roulette wheel – not a good idea. Typically, people who invest in biotechs (biotech funds or wealthy individuals) will buy a basket of these stocks. It’s like the VC model – you know a bunch of your companies will do nothing, but you expect that the winners will more than make up for the losers. You don’t put a sizeable chunk of your funds into one company, though. Hope that helps.
Thanks guys. Your analysis is absolutely logical. I wondered if there was anything in the numbers that you thought made it in any way, shape or form interesting as I couldnt see much beyond the idea. Seeing as most of the data is negative, there will be a lot of cash burn plus it is not clear how they will monetize their treatments, I suppose it is a bet. Might still take a small, satellite position in it though…!
there is a large amount of companies out there just like this
bromion Wrote: ------------------------------------------------------- > > Typically, people who invest in biotechs (biotech > funds or wealthy individuals) will buy a basket of > these stocks. It’s like the VC model – you know a > bunch of your companies will do nothing, but you > expect that the winners will more than make up for > the losers. You don’t put a sizeable chunk of your > funds into one company, though. > +100 I just made my stem cell “investment” by plunking down a couple grand to store my daughter’s cord blood.
^I did that for my son too start of this year. Probably a pointless exercise, but the demand is clearly there. Apropos to nothing much, I have it on reasonably good authority (e.g. the head of a UK based charity for a disease that would really benefit from these developments) that the breakthrough is within reach i.e. 5 years. And ge got that information directly from the head of a leading biotech firm (I imagine someone *like* Craig Ventner) who he said was normally ultra cautious with making any pronouncements i.e. it was a big deal. Anyway, I was excited when I saw the news and have my fingers crossed.
i have held this stock for coming up on 4 years year. went to school with the CFO’s daughter. definitely a long term risky investment, but a risk I can afford to take now. i bought in when it was around 7 and definitely think its going to go up from here…check out ASTM too. if your time horizon is over 2 years i think its a go
i have held this stock for coming up on 4 years year. went to school with the CFO’s daughter. definitely a long term risky investment, but a risk I can afford to take now. i bought in when it was around 7 and definitely think its going to go up from here…check out ASTM too. if your time horizon is over 2 years i think its a go
Remember what happened in Bioshock…?
I agree with Bromion. You need to be very diversified if you want to play with these lottery tickets. Even if the drug is eventually approved, you can get majorly diluted along the way as the company comes back to the capital spicket to cover their massive cash burn rate.
GERN ROE -38.03% Profit Margin -2229.49% why would you even think about buying this
I imagine MSFT & GOOG had just as enviable metrics like in the early days. Think we are agreed you are buying the dream here. While the ETF path is the obvious one, part of me thinks first to market might help prospects. I suspect that a broader range of investors have it on their radar. Then again, the second mouse often gets the cheese.
Muddahudda Wrote: ------------------------------------------------------- > Then again, the second mouse often > gets the cheese. I didn’t read the article, but if this is in pre-clinical or first stage, you should expect current holders to get diluted at least 2-3 times before the drug goes live, if it even passes through all the stages.
daddybackstab Wrote: ------------------------------------------------------- > GERN > ROE -38.03% > Profit Margin -2229.49% > > why would you even think about buying this Those are the most irrelevant metics you could possibly look at
Phase 1 trials just test whether something is safe to use on humans. It won’t tell you one way or the other whether it is a potential product or not. This company hasn’t produced a profit in 10+ years…why are firms like this even listed? I don’t think MSFT and GOOG were ever like that. As others have said companies such as this should be left to VCs.
I agree. This is nuts. There’s a Phase 1 story out there about hairy cell leukemia but the number of products given for Phase 1 trials is a bajillion times more than the number of drugs that get FDA approval which is a multiple of the number of drugs that are ultimately profitable which has only some bearing on whether shareholders ever see any value.
FrankArabia Wrote: ------------------------------------------------------- > i wouldn’t touch it. > > no track record, no understanding of the product, > no idea whatsoever on the intrinsic value. oh, they have plenty of track record - it’s been public for 15 years and its most advanced product as of now is in Phase II trials. I’d love to see the amount of cash they burned for R&D through these years, and there’s a lot more to burn before anything goes commercial
higgmond Wrote: ------------------------------------------------------- > I just made my stem cell “investment” by plunking > down a couple grand to store my daughter’s cord > blood. I did that too with my two children’s cord blood. However I plan to use one of them to regenerate my liver in 20+ years after decades of happy drinking. (crossing fingers, haha)