Last night, I spoke with Greg Schiffman. He has kept a busy schedule since the successful IMPACT Phase III Trial results were released April 14th. .After putting together the Deutsch Bank Secondary that brought in 220 million dollars in May, he has since presented at perhaps the most prestigious Financial Conference in America today. That was in early June (and on very short notice). He missed the ASM to speak at the request of Goldman Sachs at their Investor Conference. The IMPACT results and the May financing coup had triggered the invitation.
1. Fidelity Fund. Greg’s comment on events since April 14th was typically an understatement. He merely emphasized that “with our new market cap, we are now in a very different place.” As an example, he cited the Fidelity position at a fraction below the maximum SEC-allowed 15% position for a passive interest.
He seemed to see that investment as a hedge fund inhibitor. I see it differently and said as much, citing the Fidelity contribution to short attacks in 2004, 2005 and 2006, when they also had once had a (relatively) large position (As an aside, we noted that for a nice fee, they likely are loaning all their shares to the formerly-naked shorts, who surely now have their Fail To Deliver problem better under control. The Fidelity position may have been hedge-fund initiated as a matter of fact.)
Greg explained how today differs from 2004 when Milken’s hedge funds arrived in force. Greg told why he thought Fidelity’s new presence might send hedge funds and their manipulations away. First, manipulating Dendreon today takes a much larger money commitment by them (it would be at least 7 or 8 times as much as before). He said this makes it difficult for manipulators to persist in their game (with DNDN) and would pit them against powerful counter-forces. Foremost, to Greg, is the cost, but we agreed the present economic climate inhibits as well—making it more profitable for hedge funds to focus on Micro-Cap companies (such as DNDN recently was but is no more). I let that discussion end without mentioning hedge fund attacks on Bear-Stearns and Lehman.
2. Short Interest. He said he was “very comfortable” with the present short interest level, acknowledging that a certain amount of short interest will always be with us due to arbitraging moves being made in the normal conduct of the options market and also due to the fact that we have discounted convertible notes out there now that are being traded and arbitraged. He did agree that there may be concealed naked short interests not included in the official total, and that would be a force yet to be reckoned with, but reiterated that as a percentage of the total outstanding shares, our publicly-stated short interest level now is not different from most other companies.
3. FDA Approval Dynamics. He confirmed again that the Analysts’ meeting likely will be held in September, though no firm date has been announced. He seemed most effusive and ebullient when talking about the IMPACT results and his expectations from the FDA over the coming year. Of course, he knows the unpredictability of that ethically-challenged organization, and makes no outright prediction of an Approval. But he strongly emphasized that the FDA asked for a confirmatory study vis-à-vis the 9901 Trial. He stated that the company has delivered exactly that in a profound and compelling way—summarizing with, “9902b parallels 9901 closely.”
(Continued to Part 2)
