Silence Therapeutics Share Discussion Threads

[1gw] 08/1/2020 08:18

No, but a US IPO could make a difference!

My point wasn't about liquidity, it was about the perceived "quality" of the shareholder base. More likely to spike higher to (what might be) "fair value" and above perhaps if those thinking of buying in can see good institutional names already invested.

[vonmoger] 08/1/2020 08:10

1gw, Issuing shares at a premium through a deal to big pharma might make the register heavier towards institutions. It wouldn't solve the tightly held and relative low liquidity issue.

[1gw] 08/1/2020 07:46

Soc Gen sold 1,460,562 shares between 2nd Oct and 2nd Jan according to its TR-1's. Yahoo! Finance reports the recent 3.2m volume day as 2nd Jan and ADVFN shows the biggest of the big trades as 1,358,900(at 360p) balanced by 2 smaller ones (also at 360p). The smaller ones are about 0.9% of the issued share capital each.

So I think it seems reasonable to assume that Soc Gen was the seller at 360p. Given the size of the disposal, we may still get a holdings notice from the buyer(s). I would still like to see a new institution appear on the register of major holders. While MNK and Takeda give some credibility to the science on the partner side, I think the register is a bit light on "serious" institutional investors. Admittedly that may partly be because the private investors (and Soc Gen, on behalf of whoever they are holding for) have managed to mop up some of the relatively small free float after the MNK deal, but it would be good to see a new institution appear.

[peanut100] 08/1/2020 07:26

Hopefully, buy them cheaper

[vonmoger] 08/1/2020 07:13

Your compassion for the shorters who got stopped at 8am yesterday is plain to see.

[kreature] 08/1/2020 06:39

Hopefully that deal will be here at 7am, otherwise I think it’s probably driftaroonies today. GL

[vonmoger] 08/1/2020 06:08

On non-dilutive capital raising

On the Arrowhead + JnJ deal of 175m upfront + 75m equity. The equity was subscribed for by JnJ at a 24% premium to the previous close.

Honest question, is that still dilution?... If that is the deals game plan... Once again significant gap risk.

[vonmoger] 08/1/2020 05:51

K, Sikh

Cash position is good, robust financial health, 33m enough until second half 2021 it is that simple.On the call well resourced to handle partner and proprietary programs. No amount of hypothesizing or theorizing on cash burn or "incredibly expensive trials" is going to change the fact it is budgeted for.

In my opinion post deals this year, coming likely end of this quarter, the company will have to much cash for a market cap that is to low relative to comparables...

The rise from 2 to 6 last year can just as easily be blamed on over eager shorters getting their fingers burned. It is all there in the data presented by 1gw. No need to thank Ali or the ex CEO for their efforts. This time though the shorts haven't stuck their fingers in they have shoved their whole junk in, At record implied levels. They got burnt to death over 2 months last quarter, Yesterday morning they got pumped hard with gap risk... What's that saying fooll me once, fool me twice? But no right here right now, best short ever... Way better than when it was at 6!!! Right now it's the time to go short! Pile in. Absolutely crazy advice. As always with shorts at a record and gap risk,.. I'll continue to add.

"The Company reports an unaudited cash balance at 31 December 2019 of £33.5m. This provides the Company with sufficient cash to fund operations under the current business plan into the second half of 2021."

[1gw] 07/1/2020 23:15

I did think when the price spiked to £6 that they might have been tempted to raise - it would perhaps have been sensible if there was sufficient demand. Similar to what Arwr have just done.

But they should be able to get a long way with the current model (imo). That includes up-front payments and equity investment by licensing partners, r&d/clinical development carry by partners and in due course a "placing" in the form of a US IPO. The up-front / equity investment model is now well-established in the RNAi sector. SLN are developing a stable of assets that this model can be applied to and one of the exciting things about the Takeda deal is that it expands the model to targets brought by other companies.

[kreature] 07/1/2020 22:45

Thanks 1g, I only checked back a few RNSs where it conspicuously didn't exist. Saying they will raise non dilutive capital, surely doesn't prevent them from also tapping the market, and I seem to remember that clinical trials are incredibly expensive and slow? With all the promotional video interviews last year, and the recent fall from £6, I just wonder if there's any forward-selling into a placing currently going on. Cash position of 33m looks good until you factor in the cash burn even without trials. As for the US listing, it didn't sound so urgent today, and is it even possible? Got to wonder when is the placing though. imo - ATB

[sikhthetech] 07/1/2020 22:32

Cash burn around £20m, current cash £33m.. as they say they have enough cash for CURRENT business plan until mid next year, yet they're looking at other areas... So expect a placing soon..
1st dosing hasn't happened yet, pumped on CEO's video and CEO has resigned....
Pumped on Ali's recommendation, yet Ali selling...

£280m mcap!!! - well overvalued

[1gw] 07/1/2020 21:26

I hadn't noticed that comment on equity fundraisings, but it hasn't just been slipped in to today's announcement, it appears to have become part of the boilerplate on a number of others e.g. September interim results and July Mallinckrodt equity investment.

I would guess they're starting to think in terms of SEC-type risk warnings to investors to mimimise the risks of future shareholder lawsuits, but why they put it at the bottom of some releases and not others isn't entirely clear.

But of course the much-desired (in some quarters) US IPO would be exactly that wouldn't it? As indeed was the MNK equity investment. The trick is to be able to issue equity at a premium rather than at a discount.

[vonmoger] 07/1/2020 21:23

1gw Fair comments - as you say he said they will raise further non dilutive capital this year. It does not sound like deals when it is put like that but it must be.

The flipside of your 10m rather than 100m... Is that historically other companies have done upfront + equity... If it's only upfront (no dilution) the upfront would be higher not lower. So maybe at the higher end...

I would also note, the upfront of 25m from mnk is low compared to recent deals. They can change the points on the backend to make the upfront what they want. Mnk having its possible cash crunch with opioid litigation... Likely wanted less upfront and to pay more backend.

This has a table of Dicerna's deal run
hxxps://www.biopharmadive.com/news/dicerna-novo-nordisk-deal-nash-diabetes-obesity/567518/
Oct 17, 10m
Oct 18, 22m
Oct 18, 100m
Oct 19, 200m
Nov19, 175m

Some of the gains would be due to platform validation but also due to FDA approving drugs in 19. The Oct 17 10m... Might be worth say 50m in 19 because of the FDA affect. Again points to higher not lower.

I would think sln now make 1-200m total this year from deals because of no 2020 LP(a) deal- so lower than before. But each to their own guess. Could still be upside surprise. LP(a) is pushed into 2021 and will be a blockbuster. I still think a deal by q1.

[kreature] 07/1/2020 21:03

It's not even delayed past mid-year with that H2 statement. It just creates a slippery opportunity to delay past mid-year with no obvious delay imv.

Talking of which, anyone notice this bit slipped into today's RNS?:
'Silence Therapeutics continues to assess a number of options in addition to its organic plan.........which may include equity fundraisings.....'

I just wonder if any significant holders are currently forward-selling towards a placing to fund a 360 trial, a 124 trial, and a US subsidiary ?

[1gw] 07/1/2020 20:23

Thanks for the summary VM. I thought it was a good, if short, call although I was disappointed no-one asked them to confirm that the ex-CEO's resignation was linked to the bankruptcy issue. I would have asked the question myself (if they would have taken it) but was in a rather noisy environment.

In terms of interpretation, what I think I've learnt today is:

o We're unlikely to get news soon of a big up-front on an Lp(a) deal, which probably helps the shorts sleep a bit easier. I think Silence must have decided that the maximum expected value on Lp(a) comes from getting at least some of Phase 1 done themselves, and given they appear to view Phase 1 as relatively low-risk they seem intent on doing it. [Note though that this could conceivably be, at least in part, a negotiating ploy.]

o The absence of a CEO has not stopped partnership/licensing deals from being progressed (to conclusion in the case of Takeda).

o Takeda think enough of the platform's potential to fund a few $m of R&D, so that's important additional validation, given the question marks around MNK's financial position and what incentives that might have given MNK to agree their deal.

o There's a "bring your own bottle" model here, whereby big pharma bring their own targets and pay to use the SLN platform. This means that SLN's ability to develop it's own internal pipeline is not a rate-limiting factor in getting licensing deals done, although clearly they have to have the R&D bandwidth to perform once the target has been given to them.

o The "significant partnerships" they talk about are not, at the moment, including Lp(a) but they count MNK as a "significant partnership", so scale (on individual target deals) may be similar (up-fronts in the $10m's rather than the $100m's). Their reference to "further non-dilutive" funding later in the year suggests they expect to land at least one up-front deal, although perhaps not as soon as the longs might hope.

I do think they were a bit disingenuous on SLN124 timing. I found it difficult to square the "no delay in our projects" statement with the clear delay in first dosing and the apparent move from "mid-year" to "2H" for indicative results.

[kreature] 07/1/2020 14:45

Thanks for the summary Von. Much appreciated. I forgot all about that. I don't seem to have missed anything though. Thanks again. Was first to tick up your post.

[mdw1] 07/1/2020 14:37

An excellent summary Von, would just add that the establishment of a US operation in no way compromises their plans to list there.

Thanks for taking the time to summarise.

[vonmoger] 07/1/2020 14:34

mdw1
Any comments on my notes? I missed the first 90 seconds? Happy to hear if you disagree/thoughts etc.

[vonmoger] 07/1/2020 14:32

Interesting you refer to management staff... I just finished listening to the conference call... Did you bother K? Or best not to have your questions answered? Just keep posting them here...

My highlights from the call

* Announcement re the CEO topic likely this quarter have already had a fantastic response, management team highly experienced and competent - business as usual.

* Cash position strong, they will raise further NON-DILUTIVE funding this year - wow. Very confident of announcing further deals as the year unfolds.

* The surprise for me was SLN124/SLN360 no plans to partner at this time - wow - that means deals likely to be with the other undisclosed targets.

* Pleased with MNK partnership and progress.

* Well resourced to deliver for partners and proprietary programs.

* Moving focus to the US, timing of listing something to discuss in the future. This is a step in the shift in focus to the US.

My comment - with partnerships likely coming from undisclosed targets this year... the jewel in the crown SLN360/lp(a) being kept wholely owned... how many assets will this company have at the end of 2020? Does one need to go back and check through Arrowheads presentations to see how many they had over time? The trajectory and game plan is obvious... the heavenly glory is coming... one just needs to look at the big picture rather than the finger.

[mdw1] 07/1/2020 14:26

Listened to the con call; very positive and they clarified a number of issues which have been raised recently. Onwards and upwards.

[kreature] 07/1/2020 13:59

Probably a bit difficult making plans for conferences what with the high turnover of management staff? Might be best just to send a stand along with a few pictures and a return envelope

Von, I thought you had to have solid revenues from sales to qualify for a US listing ? Perhaps I'm wrong, I though maybe that was the issue with SCLP not listing?

[vonmoger] 07/1/2020 13:50

1gw, but they were not there last year? Not that I can tell...

Market cap is on JPM radar as is US listing, US JPM clients etc... Otherwise why would JPM invite them? Ok hot sector etc. Maybe... But US listing, sln new higher market cap has generated enough interest from JPM clients and or JPM sees listing fees.

[dp1umb] 07/1/2020 13:30

Kreature KP Morgan lol.

[1gw] 07/1/2020 13:25

Everyone who is anyone in biotech will be at JPM, I think. It would be very odd if SLN were not there.

They may be planning to interview CEO candidates there.

[vonmoger] 07/1/2020 13:22

Re-reading this RNS - This JP Morgan conference they are heading to mid January + us office... The listing is on/coming. Does JP Morgan do IPOs/underwrite them? The marketing tour over there started last year... This is the second step/it's continuing.

I think significant deal q1 + hire CEO, announce listing q2, name other targets, announce another significant deal end of q2.