"I've been following this one since the phase II data were first released and saw your tweet this morning. At an enterprise value under $75 million, priced much too heavy a discount. I wouldn't argue that the Shire/Advanced BioHealing deal is the perfect proxy given an FDA approved product, sales, etc., but pricing Derma Sciences at one-tenth the value for a product that could generate $150 million with better margins than Dermagraft is ridiculous. Derma Sciences could double and still not be over-valued."
The tweet Zach refers to was actually a retweet of a point made by @sharkbiotech. "Re: $DSCI they have no cash to do a phase III trial. Gonna have to raise cash although they could do that by partnering ex-U.S."
Derma Sciences does a $50 million shelf registered with the SEC so the company could sell stock to raise the money necessary to fund the phase III studies of DSC127. Or, the company could try to fund the studies by selling marketing rights to the drug. Even if Derma sold more stock today, the enterprise value is still relatively low. I agree with Zach on that point.
More from Twitter, @ReformedBroker asks, "How long has Genta (GNTA) been flogging this antisense nonsense? 12 years?" The two most disappointed men in America this week had to be Harold Camping and Ray Warrell. Camping, of course didn't get his Rapture last weekend. Warrell, the longtime CEO of the biotech firm Genta, finally had to admit that his decade-long quixotic effort to develop an experimental cancer drug known as Genasense had finally come to an end. Genta, on Monday, reported the failed results from what should be the last Genasense clinical trial ever conducted. The combination of Genasense plus chemotherapy did not prolong the survival of skin cancer patients compared to treatment with chemotherapy alone. And yes, it's another blow to the already troubled credibility of the therapeutic drug technology known as antisense, which attempts to make drugs out of snippets of genetic code that infiltrate cells and prevent the expression of harmful proteins. Genta, Genasense, Warrell and I have a long history. I first tackled the subject in 2002 in a story that highlighted doubts and concerns about Genasense and its clinical trials. Many more bearish stories and columns followed. It's hard to imagine today, but Genta back then was a real company trading on the Nasdaq with significant institutional investor backing and a gaggle of sell-side analyst coverage. It was also a fantastically controversial stock that drew a ton of attention from some really smart biotech short-sellers who never believed in the Genasense story that Warrell pitched wherever he could find an audience.
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