BioTime Harnesses Geron’s Stem Cell Technology And Its Founder; Is That Enough To Survive The Biotech Revolution?
BioTime Harnesses Geron’s Stem Cell Technology And Its Founder; Is That Enough To Survive The Biotech Revolution?
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on
December 5, 2014
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by Ian Clift
Summary
BioTime is a growing player in the anti-aging biotech revolution, buying up multiple assets, including Geron’s stem cell technology portfolio.
Is buying time for biotechs the cliche in the BioTime name?
BioTime is accumulating a large portfolio of therapeutic and research tools at a low cost with strong future potential, but is also racking up debt.
As a typical contrarian, I like to look for undervalued stocks and buy them up. As such, I have a long-term investment in Geron (NASDAQ:GERN), which played out well with the recent news of an exclusive deal for Imetelstat inked with Johnson & Johnson (NYSE:JNJ). As a holder of GERN, I have been bestowed with multiple warrants for BioTime (NYSEMKT:BTX) that are buyable at $5 each. Basically, I could own a minor share in a company invested in stem cell research that I invested in when I bought GERN and lost when the company sold it. I am sure that the value of my distribution is far less than the payout GERN received for selling its stake, but nonetheless, I would like to see this stock climb so I can make some additional cash. Does it have what it takes?
Geron’s survival
First, let’s look at GERN. It is clear now that GERN’s purpose in selling off its stem cell assets was to provide capital for continuing operations long enough for its key drug Imetelstat to find a financial backer. With that new backer, its stock has seen a share spike, and will hopefully lead to a revitalization of the stock. Most biotech companies, by and large, use investors for the cash they need to perform highly risky experimental testing; this means that most of the money lost in GERN over the past several years is to be expected. I expected it, and I expected increases to occur from time to time, such as the increase that occurred between lows of around $4 in 2008 and highs of around $9, in which I sold my position in the company, and then bought it back when it sank back down to $4 a share again. I continued to buy as it continued to fall, and now I’m waiting for my second bankroll. The idea behind this contrarian view is a hope that a big blockbuster is just around the corner. Most likely, it isn’t. But recent news that JNJ is purchasing the exclusive rights to GERN’s Imetelstat, after the FDA lifted its clinical hold on GERN’s last gasp for salvation, means that GERN will not be troubled for cash for a little while, dramatically raising investor interest and squeezing the shorts. To keep the momentum going, GERN needs to invest in another pipeline of drugs, but potentials for this pipeline most likely won’t be announced until next year. In the mean time, I wait for the right price and sell big.
read more: http://seekingalpha.com/article/2727565-biotime-harnesses-gerons-stem-cell-technology-and-its-founder-is-that-enough-to-survive-the-biotech-revolution
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