Midyear 2025 podcast ideas updates
Summary
Andrew Walker’s midyear scorecard is two positive developments and one slower-burn thesis, with Sage Therapeutics and Keros up while Full House Resorts remains down roughly 10% year to date. He remains long all three and argues that each still offers upside, though Sage’s remaining window is measured in weeks, Keros’s in months, and Full House’s in years.
Sage agreed to sell to Supernus for $8.50 per share plus a CVR, validating Walker’s call that it should sell rather than consume its cash. Yet the $561 million equity price implies less than $200 million of enterprise value after roughly $400 million of post-burn cash—below the $200 million financing previously available against its Zurzuvae royalties. To Walker, that “screams that this is a bid that’s designed to be beat.”
Biogen remains the “dog that didn’t bark” because it put Sage in play but was apparently absent after Sage kicked off the subsequent sale process. As Sage’s 50/50 Zurzuvae partner, Biogen knows the asset and can collapse the JV, giving it synergies unavailable to Supernus. Walker expects a topping bid within days or one to two weeks, before the tender closes; otherwise, he says Biogen is either “full of malarkey” about the drug or so poor at valuing M&A synergies that it should never do M&A again.
Shareholder pressure appears to have mattered at both Sage and Keros. Sage’s tender documents acknowledge investor frustration over the process and continuing cash burn, while Keros’s bruising director vote preceded a promised $375 million capital return. Walker’s lesson is that “50 small shareholders writing letters to the board” can carry weight even without forming a coordinated group.
Keros’s $375 million return is only a “nice start” against $720 million of first-quarter cash and equivalents. With its late-stage assets failed or partnered and only one early-stage drug plus preclinical programs remaining, Walker sees more than $300 million of retained cash and the current burn rate as unjustified. The return mechanism is still undecided, and he expects continued shareholder pressure to force additional distributions and cost reductions.
Full House’s operating picture has split sharply: American Place is outperforming, while Chamonix has ramped “much slower than I expected.” The temporary Waukegan casino is setting records and could support a permanent property producing roughly $100 million of EBITDA; Walker has cut his practical Chamonix expectation from $50 million toward $25 million. The decisive near-term catalyst is a refinancing that he expects to complete without equity dilution, after which construction execution becomes the central risk.
Full House insiders are backing their valuation claims with unusually emphatic purchases. CEO Dan bought more than 270,000 shares—nearly 1% of the company—at $4.75 when the market price was around $3, largely for trusts benefiting his children and from his ex-wife. Walker’s deliberately memorable formulation: insiders buy “from their ex-wife at a 50% premium…when they think the stock will rise by a heck of a lot.”
Deep dive
1. Sage’s sale validates the thesis, but the price looks deliberately beatable
Walker’s original Sage thesis offered the board two paths: be a “good girl” by running a sale process and maximizing value, or be a “bad girl” by preserving an unaligned management structure while burning the company’s cash. The agreed sale to Supernus for $8.50 per share plus a CVR puts the company firmly on the first path—“winner winner chicken dinner”—and should remove Sage from public markets within six to eight weeks.
The headline consideration understates how cheaply Supernus is acquiring the company’s remaining assets. Its $561 million equity payment compares with $424 million of cash at March 31, 2025, or roughly $400 million after assumed interim burn, leaving less than $200 million of enterprise value. Sage previously had access to a $200 million royalty financing against Zurzuvae, making the purchase price lower than what a financier was prepared to lend against the drug.
Walker assigns limited value to the CVR because, in his reading, only one of its smaller milestones is likely to be achieved. Even without a competing offer, he considers Supernus’s purchase “an absolute song” once the cash and Zurzuvae economics are separated from the headline valuation.
2. Biogen’s absence is the unresolved event-driven catalyst
Walker calls Biogen “the dog that didn’t bark.” Biogen put Sage in play but, according to the tender documents, did not participate after Sage kicked off the sales process—even though it owns the other half of the Zurzuvae partnership, knows the asset best, and could collapse the 50/50 JV to capture substantial synergies.
No other operating buyer has comparable synergies; a royalty investor is the only plausible exception. That makes the current valuation especially difficult for Walker to reconcile: “The fact that this company is getting acquired for less than a royalty buyer was willing to finance this drug…screams that this is a bid that’s designed to be beat.”
His expectation as of July 7 was that Biogen would top the bid within days or one to two weeks, before the tender closes. His blunt two-way alternative if Biogen does not bid: either its public enthusiasm for Zurzuvae is “full of malarkey,” or its discount rate and M&A judgment are so poor that it should never do M&A again.
3. Shareholder pressure changed Sage and may not be finished at Keros
Sage’s tender documents explicitly note that stockholders complained about the process’s duration and continuing cash utilization. Later references to completing the sale before the annual meeting suggest to Walker that directors feared an embarrassing shareholder confrontation: “You want the board to feel a little bit of heat.”
He does not claim sole credit and stresses that larger investors were also pressing the company. His broader conclusion is that dispersed engagement still matters: “50 small shareholders writing letters to the board reminding the board of their fiduciary duty—that carries a lot of weight.” It cannot guarantee an outcome, but it can disrupt a board’s preference for the status quo.
At Keros, strategic alternatives followed almost immediately after Walker’s April podcast, and the company has now announced that it will return $375 million. Against $720 million of cash and equivalents at the end of Q1 2025, however, he calls that only a “nice start”; the company has not decided whether to use a dividend, tender offer, accelerated repurchase, or another mechanism.
Walker’s core objection is operational as much as financial. Keros’s important late-stage products have either failed or been partnered, leaving one early-stage drug and a couple of preclinical assets; that portfolio does not require more than $300 million of retained cash or the current “way too high” burn rate. He wants deeper cost cuts, more capital returned, and some partnership value passed through to shareholders.
4. Keros’s board vote leaves directors with little room to ignore investors
The annual-meeting results reinforced Walker’s view that dissatisfaction extends beyond his own position. Of three directors on the staggered board, the director affiliated with Keros’s largest or second-largest shareholder won overwhelming support, while one incumbent received enough withheld votes and broker non-votes that Walker believes the director should have resigned; another produced an approximately 50/50 result.
Those outcomes were particularly damaging because the company already had a support agreement with one shareholder. Walker believes the vote helped produce the $375 million announcement, but not an adequate response: “I don’t know how the board would not get the memo here.”
ADAR1, identified by Walker as Keros’s largest shareholder, separately described the election results as troubling and the capital return as insufficient. Walker agrees and expects more cash to be distributed in the near to medium term; otherwise, his warning to the non-aligned directors facing the next annual meeting is simply “godspeed.”
5. Full House’s strongest asset is accelerating while its prestige project disappoints
Full House Resorts is the blemish in the scorecard: Walker’s 2025 idea is down about 10%, versus Penn at roughly negative 10%, Caesars negative 15%, Boyd positive 7%–8%, and MGM approximately flat. Some weakness is sector-driven, but Full House’s leverage leaves it especially exposed; Walker’s response is to “rub my nose in it,” not hide the mark.
American Place in Waukegan is performing “phenomenally well.” Full House spent roughly $200 million on the temporary casino—housed in what management compared with a municipal winter salt-storage structure—and expects another approximately $300 million for the permanent facility. March set an all-time record, May was second only to March, and Walker believes the finished property could generate $100 million of EBITDA.
January’s Illinois Supreme Court decision dismissed the nuisance lawsuit and ruled in favor of the Illinois Gaming Board, removing the tail risk around the gaming license. Construction can begin toward the end of 2025, proceed substantially through 2026, and produce a 2027 opening. Financing and construction remain material risks, but Walker argues that American Place alone could ultimately be worth at least Full House’s current enterprise value: “American Place is full speed ahead.”
Chamonix in Cripple Creek is the offset. The upscale French-style resort was intended to transform a penny-slot market that included the Brass Ass Casino across the street and its Dynamite Dick’s restaurant, but its ramp has been far slower than either Walker or the company expected. Management fired the general manager after an undercover operational review; where Walker once hoped for $50 million of EBITDA, he would now be pleased with $25 million, while the company’s $50 million aspiration feels like “before the heat death of the universe.”
6. Insider buying makes refinancing the pivotal Full House catalyst
Full House’s CEO has outlined approximately $45 per share of eventual value. Even removing prospective growth projects and applying time-value discounts, Walker struggles to get below $20, versus a stock price near $4—potentially a five-bagger over five years, though American Place must still be financed, built on budget, and successfully ramped.
Director Eric Green bought 25,000 shares at $3.40, committing more than his $62,000 annual cash director compensation and increasing his ownership by over 10%. The larger signal came June 13, when CEO Dan bought more than 270,000 shares at $4.75—over 50 basis points and nearly 1% of the company—even though the shares were trading near $3 and had not reached $4.75 since March 1.
Dan acquired some shares personally and most for trusts benefiting his children, purchasing them from his ex-wife. For Walker, the transaction’s negotiated premium turns Peter Lynch’s familiar insider-buying maxim into something stronger: it is “actions backing up words” by the same CEO who publicly argued for $45 of value.
The remaining overhang is roughly $300 million of incremental funding for American Place, likely within a much larger company-wide refinancing against a market capitalization below $150 million. Dan’s new contract pays a $300,000 bonus if principal debt is refinanced by March 30, 2027; Walker expects completion in the second half of 2025 without equity-raise dilution. If that occurs, removing financing and dilution risks could reprice the stock sharply—leaving execution, overruns, and casino ramp-up as the “big if.”