ARIA strikes me as a potentially profitable short. Reasons:
• The enterprise value is a whopping $1.5B (fully-diluted).
• Even knowledgeable posters claim that Ponatinib is a “lock” for FDA approval based on interim data, so hugely bullish expectations are already baked in.
• The CEO is untrustworthy and has a propensity for pumping that goes beyond what you typically see for a small biotech.
• At least one and possibly two generic competitors for Ponatinib will be on the market in the next few years.
• Expensive cancer drugs for niche markets are, by and large, a bad business proposition; they will be among the easiest targets for government-mandated price controls in the US (and around the world).
Feedback welcome.
“The efficient-market hypothesis may be
the foremost piece of B.S. ever promulgated
in any area of human knowledge!”