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Forward Investment ThesisThis sector has not been investable for well over a year. Though I hold a position in BEAM, NTLA and SGMO on which I've been writing monthly covered calls, the positions are relatively modest. My view is the macro climate is primarily tied to interest/inflation rates given that any recession risk is modest for noncommercial entities. Currently most believe the Fed terminal rate will be somewhere around or just north of 5%. Also believe the next increase in Dec is more likely to drop to 0.50% rather than the 0.75% which should be well-received. That could set up for a short term market rally but odds are pretty good that it will eventually get sold off unless inflation data cools more. The second component of my investment criteria for SGMO is cash infusion. The need for cash to advance programs is very clear. For them to pursue what they have in the pipeline will likely require cash inflows of around $1b in the next 2 yrs. The current preclinical pipeline show the need to ramp spending given:
A hypothetical approach could include the following:
Stand alone, those are not enough to generate sustainable buying, but a collaboration agreement for STAC 102/103 combined with Biogen using it for Tau could generate a notable rally (see VYGR reaction to PFE/BIIB collabs or FDMT reaction to CF delivery). I would do a deal with a modest upfront just for the publicity and time a modest $150m equity offering after that. These payments would likely bridge to the events that could drive price up enough to trigger a larger equity raise
Pretty optimistic series that has little chance of being accurate. But not all needs to happen if the macro turns positive and they have some successes. For now I wait and see what transpires. |
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Msg # | Subject | Author | Recs | Date Posted |
168846 | Re: Forward Investment Thesis | nocashonhand | 0 | 11/29/2022 7:58:08 PM |
168848 | Re: Forward Investment Thesis | rynotheknife | 1 | 11/29/2022 8:33:20 PM |
168851 | Re: Forward Investment Thesis | MartyCh | 30 | 11/30/2022 7:52:11 AM |
168852 | Re: Forward Investment Thesis | Bioimmuno | 8 | 11/30/2022 9:36:14 AM |
169276 | Re: Forward Investment Thesis | MartyCh | 33 | 12/20/2022 6:21:52 PM |
172823 | Funding WAG | MartyCh | 24 | 5/11/2023 9:06:12 PM |