In response to a number of questions and comments made to this discussion board regarding the company's share price, Dr. Moro would like to make the following statement:
I disagree that the worth of something is determined by how much a person wants to sell it for and another person want to buy it for. That is not what it is worth, that is its price and there is a clear difference between those two concepts, because the latter reflects an instantaneous valuation, while the former is reflected over time. When the DOW swings hundred of points in a day, it does not mean that the companies indexed are worth less today than yesterday and more tomorrow than today. It rather reflects the mood of individuals who speculate for profit.
If we spent $1M in IR, the share price would likely move up considerably, but the company's worth would remain the same (actually, it would be $1M less).
Here are some intriguin things related to the price of our stock: In Sep 2007 we announced a joint presentation of positive and validating results with our only licensee at the time, Abbott Labs. The stock moved up 13% on a volume of approximately 700,000 shares. When we announced in January the signing of Inverness as a second licensee price increase the increase was 11% also on a volume of approximately 700,000 shares. Four days later, the price was back at its average value over the previous 12 months (around $0.65). Was the company worth the same 3 days before as 3 days after that announcement? I think not, among other things because that agreement brought, so far, $1M into our treasury. The argued-to-death amendment to Abbott’s agreement resulted in a price INCREASE of $0.58 (average of the 10 previous sessions) to $0.62 (average of the following 10 sessions), an interesting point which contradicts the systematic basher(s) opinion repeated ad-nauseam in another board. In mid June, the price had slowly dropped to a 10 session average of $0.52, which was not too bad considering the clouds on the horizon. The week of the 4th<!--[if !supportEmptyParas]--> of July, it suddenly dropped to $0.35 and by the end of that month we were at $0.27 to then settle around the $0.20. There are no adverse materials events in filings or press releases that could justify the drop in price. On the contrary, we have continued to progress and reported on the progress toward our goals.
Here is a summary of our fundamentals:
We own a technology that allows detection of early stages of cancer and that can be used in a variety of cancers. The tests can be used not only for screening but also for diagnosis (confirmation that a lump is malignant), follow up (to detect cancer recurrence), therapy monitoring (a reduction in blood RECAF means there is less cancer cells alive), etc, where - as I explained before – the ability to detect multiple cancers is undisputable.
The tests detect cancer using a drop of blood and it is accurate more than 90% of the time. We know that we can use it in the form a rapid test, to be performed in a few minutes by a doctor in his office and we know that we can do it using saliva, which does not even require drawing blood. All of this has scientists all over the planet interested in doing collaborations with us, some of which have already produced some of these – by any standard - extraordinary results.
After thorough due diligence we signed licensing agreements with two of the largest companies in our sector and further validation came in the form of a joint presentation of results with the largest diagnostic company in the planet, before our peers and at a cancer international meeting.
Thus, is it fair, or even reasonable to set the worth of this company at $0.20/share? I think not.
The fact that we do not understand why a company is undervalued does NOT mean there must be something necessarily wrong with it. It simply means that we do not understand how the market works and that is precisely why it works; nobody has a handle on it. I do not have an explanation for our share price other than the general horrid market conditions prevailing in the past few months.
We have delivered on practically everything we set to do and we have recovered from crises worse than this one: In early 2003 we were at $0.10 and we could not pay the rent. Two years later we were at $2.30/share.
Awaiting the end of this storm, we continue, AS ALWAYS our work, for you as a shareholder, for patients who can benefit from our discoveries and a little bit for ourselves too. In this sense, Management does not take enormous salaries or compensations and we have sold very few of my shares in the past 2 years, which is indicative of how we feel about the company, its fundamentals and its future.
Warren Buffetts’ comments are right: This is a time to invest in good companies. Good companies are those with content and fundamentals that are worth MORE than the current price of their stock. I happen to believe that we qualify.
