Ariad Pharmaceuticals Inc fka ARIA

[Whosetosay]

I attended the meeting and afterwards, my wife read me posts off the board as I drove the car home. Posts from those in person, mican’s is vg, and from those who listened to the call, folks offered good and varied perspectives to the events and the direction as outlined by management.

Summary, I think Amp’s view is good for those with a now longer investment horizon:

All in all, the only people who will be disappointed are those who expected something dramatic that will pump up the pps instantly. Even without that, I'm satisfied that we're on a very solid path forward.

Certainly, new, post-Oct. investors will be happier than legacy holders. They are where weary (and a bit wary) legacy's were years ago. Legacys have to climb back up a second time, and we all still have exposure to market risk.

Ariad is a somewhat different company now, still determined, but a bit more cautious, a bit chastened, the story unfolding less quickly. Recovering pps will take time, a 2-3 years’ time, longer runway, as the drivers now are more about Iclusig fundamentals. The trials have to run to get the indications approved to get the revenue moving. GIST, Japan, '113, ISTs need the time to unfold. A few other smaller wildcards, esp. Bellicum, the same. The next molecule might bring sizzle back, maybe not. No silver bullets, no blockbuster announcements seemingly on the way, good or bad, just blocking and tackling now. adds. I could not elicit much on an Oct 2013 type of risk re-emerging. We know that doesn’t mean there isn’t one.



I strongly encourage folks to read or listen to the replay/transcript. The Q& A dialogs got down to specifics. Transcript probably available soon here:

http://www.nasdaq.com/symbol/aria/call-transcripts

Or listen to the meeting on the replay of the webcast:

http://investor.ariad.com/phoenix.zhtml?c=118422&p=irol-EventDetails&EventId=5147033

Along with my questions, I had written a few letters with specific proposals on pricing and financing to the BoD over the past several weeks. I sent the list of questions I prepared in advance also. There was no doubt the proposals and questions were discussed in detail amongst the BoD and management and you will hear/read management’s references to them in answers. (I didn’t get to your one specific question Amp as time grew late. HB recognized that and offered to answer in a follow up, which I will make shortly. I had a good exchange with TC afterwards and can share some of that.)

My personal perspective on a few key points. My goal was to be more circumspect and specific than last year.

Management gives most every sign they are in for the long haul and are aiming to maintain independence. IMO, from the feeling I got, that is not absolutely 100% the case (it’s close though), and anything is possible.

The board definitely has new blood, and probably needed it. Dr. Denner sat with his fellow shareholders in row 4 or 5, behind me, and I was behind rum, while the legacy BoD and most execs sat upfront. Dr. Schlesinger, also new, sat next to Denner. The 4 row gap I don’t think was awkward or signaled any obvious significant disharmony or major discomfort. Still, it could not be unnoticed. I recall only HB and Denner from the BoD addressed the gathering.

We know Ariad has smart people. Denner is sharp, you know it instantly. He brings a real investor mentality and I think he is constantly evaluating his investment. I think for time being, he’ll stay, confident in Iclusig, but I add, paradoxically, no one should presume to think they know what this guy is really thinking…back in row 4 or 5.

The team has been through plenty, but is still standing and I think still recovering. HB looks fit, he lost quite a bit of weight it seems, rum advises HB said it was not related to the issues. I think the company is 65% back to equilibrium.

I was really trying to get a warm and fuzzy feeling about the new molecule, but no dice. HB expressed confidence; TC gave a process description that included everything from success all the way down to the possibility that all candidates could be scrapped.

On AE’s FH was thoughtful and provided a more definitive answer that AE rates have not worsened on dosage reductions, and have reduced slightly.

I had pressed HB and MD on getting more emphasis on existing T315I patients population. MD offered a bit more sobering observation that there is no waiting population of these patients because they had died without Iclusig being approved and available to them. Expect 400 more, eligible T315I patients a year in the U.S.

Management rejected my call for Iclusig true-orphan-drug pricing much higher than $125,000/year. They had studied the issue extensively before commercial availability, and do not want to alienate doc and patient communities with high prices, even temporarily (while we have the limited US label and continue the earlier line pursuit.)

TC was clear - small molecule, TKI pill therapy is not displaced by immuno therapies or other novel approaches to treating cancers. Ariad does dabble a bit in these emerging trends though.

No queue of molecules right behind molecule next. TC was close to his vest on what if anything exists, was shelved, etc. Secrecy still a major hallmark, hopefully for our benefit. HB wrote me an email specifically on the issue, describing any suggestions folks have on the subject as speculation. I hope these protestations are protecting the opposite case.

My guess (I didn’t count) there were a total of 60 or so people in the room. Management is extraordinarily available at these meetings, as were some of the BoD. HB, TC, FH, MD all generous with their time, certainly with me. Kendra Adams is omnipresent, really good at keeping Ariad folks talking to folks. HB makes the effort to make it all personal. Institutions just don’t come it seems, last year the same. While it is great to have everyone in one spot, the sorts of conversations they want they get in private, and last more than a few fleeting minutes.

TC spoke to me about designing based on mutation prediction, and Ariad’s strong skills in that endeavor. He used ‘113 after criz as an example.

HB’s buy was nice, but underwhelming, cautiously small by his standards, and won’t budge the needle. Better buy-in price coming? Who knows ?

A bit of mention on new hires, nothing on the lawsuits as I recall. Btw, I think the new hires had lots to do with the required dosing trial.