I have been following Ziopharm since March of 2015 when it popped onto a lot of radar screens. After paying the MD Anderson Cancer Center $50 million in stock for a partnership agreement (and another $7.5 million to expedite the deal) the ZIOP symbol started showing up all over message boards and social media sites where public companies are discussed.
We all know what happened of course, after getting up near $15 in 2015 shares of ZIOP cratered, recently trading for less than $5. That is until today.
The company released its 10Q yesterday (after market close Aug 9th) and conducted a conference call, the transcript for which is available on Seeking Alpha HERE. Pre-market activity likely got some excited in my opinion, as the PPS climbed back over $5. Shares traded as high as $5.30 before the open, and when the bell rang at 9:30 the climb continued. ZIOP quickly jumped as high as $5.48 for a gain over over 12% from the previous day's close of $4.86
Whether you're invested in ZIOP or not (either long or short) this type of activity is instructive I believe. When companies are burning cash and selling forward looking promise excitement is almost a commodity in of itself. And Ziopharm has a long history of generating excitement, in tandem with a massive accumulated deficit that is now over $600 million and growing.
Overall ZIOP finished the day in positive territory, closing at $5.14, after retreating from that $5.48 inter-day high.
Retail investors have a reputation for being focused on price, to the exclusion of almost everything else. If someone shows up on CNBC and starts screaming BUY BUY BUY for a stock, and if it starts climbing....typical retail players get excited and don't even worry about who is selling or why.
Conference Calls are a great way to drum up buyers, especially with purely speculative money burning companies relying on forward looking promise to attract investors in my opinion.
I'm not suggesting there weren't solid positives on the CC, there were. There's some pre-clinical initiatives which I assume will be with mice, and that's good news for the rodent world. And the company seems to be progressing with its phase I safety trial which clinicaltrials.gov shows as having a "study completion date" of December 2018, or about one year after the company projects its financial resources will run out.
On the financial side there was very little said, but that is something I expect with speculative companies seeking financing. A Conference Call is about stressing the positives, so I wasn't suprised to see very little discussion of something so mundane and depressing as raising capital. According to the transcript of the call this is what was said:
"We have cash, we have a cash runway through essentially the end of 2017..." (emphasis mine)
So all in all, at least in the short term, there's plenty to be excited about. Obviously going forward they're going to be needing to raise cash, but that's in the actual 10Q filing and a lot of retailers can't be bothered to read it I bet.
We shall see what happens if and when the excitement that gave the share price this little bump wears off. Or was there enough to sustain it for a while? Like when they made the Anderson announcement at JP Morgan's Healthcare conference. Personally I don't think so, but that is opinion....an opinion based partly on the lack of significant analyst participation.
Companies like JUNO and KITE are getting analysts from the JP Morgans, Citibanks, and Goldman Sachs of the street. Both Juno and Kite had over 10 analysts on their recent calls including those big boys. Ziopharm on the other hand only had two, from Raymond James and Griffin, which in my view don't have near the profile and reach of the analysts covering the CAR T leaders.
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