Where Is VSTM Headed?

Overview

We recently took a look at VSTM and their positioning for upside in the near and short term. The discussion took a look at whether the company was reduced risk at current levels or not. It was concluded that with analyst price targets, insider buys, positioning of “COPIKTRA,” and market cap based on the stock price at the time was indicative of future upside.

VSTM Recent Activity

Screen Shot 2019-01-14 at 7.46.30 PM.png

Source: Volumebot.com

Since our piece, the share value has jumped from $3.35 to the $4 range but was soon pushed down and currently resides at $3.46 (as of January 21st). Frustrated investors have cited money managers “MMs” and others in collusion as being the source of this continued downside with screen shots of level two revealing the same average trade size creating the perfect environment for those looking to play swings. How far can shorts continue to push this and is there more downside? Are shorts banking on a similar performance to GILD and their drug Zydelig? This is a firm with extensive resources, yet it has been unable to produce the financial results one may expect. This is with the broad knowledge of its coupling with Rituxan reduced risk of disease by a staggering 82% when compared to Rituxan alone. In addition to this, bears seem to remain skeptical on VSTM’s need to outperform Zydelig by an extensive margin due to licensing obligations.

Screen Shot 2019-01-21 at 8.58.42 PM

Source: Yahoo

With this in mind, VSTM was able to book in excess of $500k in sales within the remaining days of Q3.  Q4 will ultimately provide investors with a better view as to COPIKTRA’s performance and will undoubtedly determine direction of share price. A miss of estimates will likely allow bears to maintain control. Conversely a surprise should send the price towards the vesting level the board seems to foresee. Current estimates put Q4 expectation at a loss of -$.46.We hope to get a clear view on the following in the Q4 report.

  • EPS beat
  • Continuation of proving sales/ sales guidance
  • Cost of revenue
  • Update on deal with

2019 Guidance

Recently VSTM has provided some insight to investors with the announcement of an options vesting plan in which they are exercisable at prices in excess of $10. Many argue this is indicative of future share price, but is countered with many of the above points. VSTM additionally provided insights as to their forward looking statements in their Strategic Priorities For 2019. This press release touted the companies intent to pursue opportunities Duvelisib and was additionally supported by a concern for financials and a focus on entering 2019 with a strong balance sheet. The report details a focus centered on adding value by increasing revenue. This will be done through potential partnerships for Duvelisib, providing more Duvelisib data and exploring other opportunities for the platform. Additionally VSTM will be focused on increasing the revenue and opportunity of COPIKTRA.

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Disclosure: I am/we are long VSTM.

Disclaimer: MS Money Move and it’s Chief Operating Officer who is a scientist and individual investor, as well as its affiliates are not registered ...

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