41 replies to this topic

[malbecman]

Not sure if this is the right forum but lots of Resv-heads here so I thought it might be of interest....

Expected Date Week of 5/21/07
IPO File Date 3/1/07
Price Range $9.00 - $11.00
Shares Offered 5.0 mm



They also have a ~30minute roadshow online, I have not yet taken the plunge on the whole thing yet.....

You can find the link off of this page on the right hand side:

http://www.ipohome.c...asp?ticker=SIRT

[shadowrun]

Awesome - Thanks for the update.

I may be inclined to buy a few shares

[Aegist]

Can anyone here help me with this. How do I buy shares? Where do I go to facilitate my own share buying? (note: I'm from australia)

[Anthony_Loera]

Sirtis Filed over 100 patents?

interesting...

[wayside]

Can anyone here help me with this. How do I buy shares? Where do I go to facilitate my own share buying? (note: I'm from australia)

It is highly unlikely you will be able to get any shares at the IPO price, unless you are a major customer of the banks handling the IPO. It is pretty small as IPOs go - only 5 million shares. Contact your broker, maybe you will get lucky.

As soon as it is public, you should be able to buy it on the open market using any brokerage (at least in the US). You can probably trade shares on the US markets from Australia if you have an account at a reasonable-sized brokerage.

Given the hype, I wouldn't be at all surprised if it opens 200+% above the IPO price.

I'm a little surprised they are actually going public, rather than raising another round of private investment, considering how small they are. There's a *lot* of overhead in being a public company, and when you have < 40 employees and no revenues, it seems strange to take on that burden.

Unless
- they couldn't raise another round, which would point to serious problems with their product pipeline; or
- the principals are looking to cash out fairly quickly; or
- they are having problems with their current investors.

None of those are good reasons; maybe they have good reasons, I don't know.

Investing in a company that will have a $250-500 million market cap with no products and no revenues seems extremely risky, and absurdly overvalued. You better be prepared/able to afford to lose every penny.

[malbecman]

Good advice, wayside, I pretty much completely agree with everything you said (and said well).

This would definitely be far-out on the potential risk/reward ratio, folks. If you're inclined to buy some, do it with your "play" money, not your IRA/Keogh/403(B)......

Can anyone here help me with this. How do I buy shares? Where do I go to facilitate my own share buying? (note: I'm from australia)

It is highly unlikely you will be able to get any shares at the IPO price, unless you are a major customer of the banks handling the IPO. It is pretty small as IPOs go - only 5 million shares. Contact your broker, maybe you will get lucky.

As soon as it is public, you should be able to buy it on the open market using any brokerage (at least in the US). You can probably trade shares on the US markets from Australia if you have an account at a reasonable-sized brokerage.

Given the hype, I wouldn't be at all surprised if it opens 200+% above the IPO price.

I'm a little surprised they are actually going public, rather than raising another round of private investment, considering how small they are. There's a *lot* of overhead in being a public company, and when you have < 40 employees and no revenues, it seems strange to take on that burden.

Unless
- they couldn't raise another round, which would point to serious problems with their product pipeline; or
- the principals are looking to cash out fairly quickly; or
- they are having problems with their current investors.

None of those are good reasons; maybe they have good reasons, I don't know.

Investing in a company that will have a $250-500 million market cap with no products and no revenues seems extremely risky, and absurdly overvalued. You better be prepared/able to afford to lose every penny.

[tom a]

While I agree that it doesn't make sense to invest in Sirtris unless you can risk losing all your investment, my impression is that they have been planning for a long time to go public in order to raise all the money they would like to have at a reasonable exchange in equity.

There are real risks, of course, many of them based more on strictly economic issues rather than whether the underlying science pans out. For example, suppose that simple resveratrol or some unpatentable improvement on it (e.g., combining it with quercetin) is already essentially as effective as anything Sirtris comes up with?

I see it as a relatively high risk/very high payoff opportunity.

It was interesting to see the roadshow, though. Certainly if the new chemical entities they have investigated are as much more effective as their preliminary investigations would suggest (e.g., activating the Sirt1 gene at many times the level of resveratrol, at a much smaller dose), then it could be a huge win for them.

[proteomist]

More nuggets from the roadshow:


Clinical data from the phase Ib diabetes studies (once daily dosing) to be announced in the second half of this year. Another phase Ib to be reported in first half of next year (twice daily dosing). Resveratrol with metformin, to be reported second half of next year.

First human testing of 'NCEs' (next generation Sirt1 activators) in man in first half of next year.

[Anthony_Loera]

Christoph Westphal, M.D., Ph.D is CEO of this company.

He has opened a few IPO's in the past... looking at the older companies:

Momenta Pharmaceuticals, Inc
http://finance.googl...icals Inc&hl=en

and

Alnylam Pharmaceuticals, Inc
http://finance.googl...icals Inc&hl=en

If we consider the CEO's history, and this PPT I found using google (check out the last slide)....
http://www.revgeneti...om/Westphal.ppt

It appears he has a knack to get ventures going, and raising money. His strategy (according to the old ppt slide) is to:

1- Get Big Fast
----First Mover
----Fund Growth
----Get Bigger than competitors or become acquisition target

2- Weightlessness (after becoming big fast)
----Remain calm
----Prepare companies to hunker down

3- Survival of the fittest
----Looking for surviving business model
----Seek profitability
----Look for fallen angels


I don't think Sirtis will corner the market on rsv as I hoped they would. I am wondering why the business model is really placed last in this strategy. One thing he has got going, is his experience with multiple ventures. At the same time, it makes me wonder if he makes most of his income (or spikes his income)from the growth of the ventures and not necessarily the products themselves.

It's interesting to see what will happen.

Anthony

[proteomist]

Thanks a lot for this Anthony, that's very interesting to note.

I still think that they will not do much in terms of bringing Srt501 to market. Maybe I'm naive about that, but the plain fact is that resveratrol is a terrible, terrible drug from a pharmacological standpoint (very poor bioavailability, very poor target affinity) and it's not proprietary, formulation issues aside. The NCEs on the other hand appear to be genuine drugs with binding constants in the lower end of the nanomolar scale. So as long as they don't cause some form of unexpected monsterism [lol], these compounds have tremendous potential. I would very much like to get hold of the structural information for these things.

[Aegist]

Thank you all very much. You have just done a lot of my research for me! I still want to look around a bit more, and I expect I will buy some shares (with money which won't hurt too much to lose) and just take a gamble on what couple pay of big time, or not at all...

[paragon]

I'm buying at least 100 or 200 shares of it. The stock symbol will be SIRT and I believe it will be listed on the NASDAQ.

Edited by paragon, 12 May 2007 - 02:26 AM.

[rwoodin]

I asked my online broker Ameritrade about this and got this reponse....

TD AMERITRADE is normally not an active participant or part of a "selling group" in Initial Public Offerings (IPOs). Unless otherwise notified, you will not be able to purchase shares of IPO securities until trading has begun in the secondary market.

As soon as the security begins trading in the secondary market, you will be able to begin trading this security and place your trades online.

If you wish to place a day limit order the day before the IPO begins trading on the secondary market, you will need to do so with a broker by calling 800-669-3900. A broker will ONLY accept these particular orders after the regular trading session has closed for the current day (4 p.m. ET).

To participate in the IPO, you must contact the company that is offering the IPO or the underwriter of the IPO directly for further information.

Investors purchasing stock in IPOs generally must be prepared to accept considerable risks.

I would imagine that if there is tons of demand for the IPO prior to market open then the stock will open considerably higher than the IPO share price. I've heard that on some IPO's it might pay to wait and see what happens for a while after opening. Possibly the stock price will fall after the initial pent up demand is met. You could then purchase the shares at a cheaper price.

[Anthony_Loera]

More nuggets from the roadshow:


Clinical data from the phase Ib diabetes studies (once daily dosing) to be announced in the second half of this year. Another phase Ib to be reported in first half of next year (twice daily dosing). Resveratrol with metformin, to be reported second half of next year.

First human testing of 'NCEs' (next generation Sirt1 activators) in man in first half of next year.

Very interesting that the NCEs testing will be in the first half of next year...

I added all the slides here for those folks that want to see them:
http://www.revgenetics.com/sirtis.htm


I find many of them quite interesting, although I think I may be missing one slide (11 or 12 i think), all the rest are shown.


I got to tell you all... each time I go to Vegas I have a certain amount of 'play money' that (in my mind...) I have already lost as a part of vacation expenses... if you plan to buy SIRT, do it with money you don't mind losing. Please don't do it with your rent money, car payment money, or mortgage payment... be practical and smart about it, specially if it's your first time. [thumb]


Anthony Loera

[Aegist]

I think their prospectus puts the risks very well:
"Risk related to our business
We are an early stage company and the approach we are taking to discover and develop drugs is novel and unproven. We do not have any products approved for commercial sale, and we have not generated, and may never generate, any revenue from commercial sales of our products. Our potential product candidates are in early stages of development where failure is common. Neither we nor any other company has received regulatory approval to market drugs that target sirtuins or genes that control the aging process. We will have to complete extensive preclinical studies and clinical trials and receive regulatory approval before we can market our products. We do not expect any of our product candidates, if successfully developed, to receive regulatory approval for commercial sale for at least several years. Even if we receive approval for our product candidates, we may never become profitable. We have incurred operating
losses since our inception, and, as of March 31, 2007, had an accumulated deficit of $34.4 million. We expect to incur substantial and increasing operating losses for the foreseeable future. See ‘‘Risk factors’’ beginning on page 10 for risks related to an investment in our common stock."

[lucid]

Ouch, they are letting themselves have it. There are a lot of factors that determine whether this company could be successful or not which are completely out of control: Cost of synthesizing or extracting resveratrol, success of Benagene etc..
I won't put much money in sirtris, but I will probably buy a few stocks so I don't forget to watch it.

[Aegist]

Wow. Are all prospectuses like this? The first third of the document is a detailed exploration of every possible risk imaginable that may result in failure of the business, loss of value in the business, or slowing of growth of the business.

It seems like a prospectus is really designed to talk people out of buying shares.

After it goes through all of the risks, it says that by virtue of buying shares at the offer price, all of that purchasing will dilute the value of the shares down to $5.70. So ytou buy for $10, only to have the shares instantly lose value down to $5.

Obviously, this is just the mathematical extrapolation, and the share market will then take over and determine what people think the shares are actually worth based on supply and demand...but it is very odd to read.

[proteomist]

Yes. They are required by SEC regulations I believe to disclose all reasonable negative scenarios. If you read any IPO filing it reads like this.

Wow. Are all prospectuses like this? The first third of the document is a detailed exploration of every possible risk imaginable that may result in failure of the business, loss of value in the business, or slowing of growth of the business.

It seems like a prospectus is really designed to talk people out of buying shares.

After it goes through all of the risks, it says that by virtue of buying shares at the offer price, all of that purchasing will dilute the value of the shares down to $5.70. So ytou buy for $10, only to have the shares instantly lose value down to $5.

Obviously, this is just the mathematical extrapolation, and the share market will then take over and determine what people think the shares are actually worth based on supply and demand...but it is very odd to read.

[wayside]

After it goes through all of the risks, it says that by virtue of buying shares at the offer price, all of that purchasing will dilute the value of the shares down to $5.70. So ytou buy for $10, only to have the shares instantly lose value down to $5.

What you are talking about is the book value of the company. Very few companies trade at their book value because companies have other assets such as products, brands, intellectual property, human capital, revenue streams, etc., that don't show up on the balance sheet as dollars in your bank account.

In fact, if a company is trading at book value, it is generally a very bad thing, because the market is saying the company has nothing of value other than its hard physical assets.

[wayside]

OK, I just wandered through the prospectus a little bit.

Near as I can tell, after the IPO is complete, they will have around $80-85 million in cash, which includes the IPO proceeds plus the money they have left from prior investors.

The IPO will also cause all of the convertibles, preferred stock, warrants, etc., to convert to common stock. Total number of shares, including options which have a strike price of $0.16, will be around 100,000,000 shares, plus or minus.

So for your $10/share, you get hard assets of $0.80/share, and if the price sticks a billion dollars of equity has been created overnight. The founders are umpty-zillionaires, the VC's make 15x on their money, and everyone is happy.

All they have to do now is make something that works.

At their current spending rate, and rate of increase in spending, it looks like that $80 million will last around 1.5 years or so (maybe less), then they'll be back selling more stock.

The question is, will Sirtris be the next eBay or the next pets.com?

[shantyhag]

The question is good, but I think your wander around the prospectus may have left you with some incorrect information. There will NOT be 100,000,000 shares of common stock. There were a little more than 100M shares of convertible preferred stock that will be converted to 20,287,131 shares of Common Stock. Additionally, there are some options, 141,982 shares of common stock (at a weighted average of $5.71-- NOT $0.16), and of course, the JP Morgan retains their over-allotment option, which increases the offering to 5.75 M shares. Thus, if my own math is not wrong (though I make NO guarantees of this either), the maximum total shares outstanding will be 26,221,630 at the time of the offering. That's a far cry from 100 million. (Source heading: Dilution, page 37)

Now, let's say that the example given in the roadshow about the company that formulated a proprietary version of niacin holds true, and that the company really can sell for 4 Billion dollars within the next few years (I think this is low, given the potential value of everything in the pipeline). Let's also assume that anyone getting in on this Day 1 is going to have to pay twice the IPO Price, which we'll set at the high end of $11.00-- this would give us a buy-in price of $22.00/share.

$4,000,000,000 sales price / 26,221,630 shares = $152.55 / share

So, under these relatively conservative estimates (assuming, the BIG assumption, that the clinicals hold up) an investor buying in at $22.00 might expect to profit $130.55/share, or to put it into Foolish terms: almost a full "7-bagger." That's not bad, but again I think that it's conservative.

Anyway, I'm bullish on this stock. I've been following the IPO developments for months now, and if I could afford more than a couple hundred shares I would probably buy them too; though I agree with everyone who says that IPO's are risky. I think, though, that this time it might be a risk I'm willing to take. I'll be adding this to my portfolio on a weekly basis.

OK, I just wandered through the prospectus a little bit.

Near as I can tell, after the IPO is complete, they will have around $80-85 million in cash, which includes the IPO proceeds plus the money they have left from prior investors.

The IPO will also cause all of the convertibles, preferred stock, warrants, etc., to convert to common stock. Total number of shares, including options which have a strike price of $0.16, will be around 100,000,000 shares, plus or minus.

So for your $10/share, you get hard assets of $0.80/share, and if the price sticks a billion dollars of equity has been created overnight. The founders are umpty-zillionaires, the VC's make 15x on their money, and everyone is happy.

All they have to do now is make something that works.

At their current spending rate, and rate of increase in spending, it looks like that $80 million will last around 1.5 years or so (maybe less), then they'll be back selling more stock.

The question is, will Sirtris be the next eBay or the next pets.com?

[wayside]

The question is good, but I think your wander around the prospectus may have left you with some incorrect information.  There will NOT be 100,000,000 shares of common stock.  There were a little more than 100M shares of convertible preferred stock that will be converted to 20,287,131 shares of Common Stock.

Huh, the version of the prospectus I looked at was apparently old; the newest one has the number of shares you list. The amount of cash they have magically jumped $30 million as well.

However:

Additionally, there are some options, 141,982 shares of common stock (at a weighted average of $5.71-- NOT $0.16),

These are warrants. There are options outstanding to purchase 2,767,174 shares of their common stock, at a weighted average exercise price of $1.42 per share; about a 10% dilution, which if your $4 billion number is correct is not a big deal. Although I doubt the cash they have will last more than 1.5 years or so, so they will likely have to have a follow-up offering, adding further dilution.

If everyone believes that $4 billion number, it will open a lot higher than $22 though. Should be a fun ride.

[Aegist]

So when do we get to see their trading price?

[luv2increase]

Too risky for me.

[rwoodin]

According to my Ameritrade account, this starts trading on the open market tomorrow 5/23. I can not find a share price on it yet.

[wayside]

Opened at $11, the price has moved around a bit but seems to have settled around $10.90. They upped the number of shares to 6 million.

Not the most exciting debut. ON the other hand, one piece of positive news and it could double. Check out what happened to Cypress Bioscience today.

Cypress doubles

[sUper GeNius]

Read the bottom of the article regarding knotweed.

http://www.mprize.or...detaildisplay=Y

[malbecman]

the "switch to knotweed extract is a real concern." What could that mean?

Perhaps a real financial concern for his company??? [lol]

[tom a]

the "switch to knotweed extract is a real concern." What could that mean?

My guess is that Sinclair might have in mind impurities in resveratrol derived from knotweed.

Of course, if the extracts are, say 98% resv, it's hard to see a real issue there, especially if they're tested for actively toxic components.

[sUper GeNius]

the "switch to knotweed extract is a real concern." What could that mean?

Perhaps a real financial concern for his company??? [lol]

Yep, that's what I think. Knotweed extract is now a competitor. Sinclair is a biased source of information now.