Guppi00

Your approach is reasonable except for two items. Because Chelsea does not have a sales force lined up, and because Chelsea does not have manufacturing costs figured out, and a cost for Northera can not be determined and therefore no price to consumer can be determined. Without this information, even though Chelsea has stated the number of people affected, a market size and value of the drug can not be determined. For a potential suitor to do this takes time and money on the part of the suitor. Chelsea should already have these answers (of course a suitor would check there validity), therefore a determination of the company value based on future revenue could be made. Since that information has not been forthcoming, valuation of the company based on the stock price is all that can achieved.

ETRM - The ADCOM has been postponed until the middle of June.

http://ih.advfn.com/p.php?pid=nmona&article=61384011

It is not uncommon for a stock to have a lower trading volume the day before earnings are announced. In addition, the lack of any news from the company other than the general announcement associated with the FDA and its drug approval has dampened interest in the stock. Essentially nobody knows what is going on. Any word from the company will move this stock.

Whether the sales force are employees of Navidea or Cardinal Health, there are costs associated with them that are or have been paid for by Navidea.

1st Quarter Report 2013 - The net increase was primarily due to increased compensation costs of $434,000 related to increased headcount and incentive-based compensation, increased medical education costs to support Lymphoseek of $290,000

2nd Quarter Report 2013 - Selling, general and administrative expenses increased $1.2 million, or 40%, to $4.2 million during the second quarter of 2013 from $3.0 million during the same period in 2012. The net increase was primarily due to increased medical education costs to support Lymphoseek of $815,000, increased compensation costs of $235,000 related to increased headcount and incentive-based compensation,

3rd Quarter Report 2013 - Selling, general and administrative expenses increased $1.1 million, or 35%, to $4.0 million during the third quarter of 2013 from $2.9 million during the same period in 2012. The net increase was primarily due to increased medical education costs to support Lymphoseek of $749,000

That totals over $1.8million in sales costs for Lymphoseek for the first 9 months of 2013. So while, Cardinal has undoubtedly paid for the bulk of the sales force cost, Navidea has had costs associated with as well. Note: These cost as of the end of the 3rd quarter exceed revenues from Lymphoseek by a margin of 3:1, and account for about 5% of the year-to-date loss.

NAVB - I would be careful with Navidea here until after tomorrows earning report. Today's announcement might just be to give them something positive to talk about tomorrow and soften the blow if they fail to make predicted earnings of -$0.07/share.

A lot of it is due to dilution. The number of shares have double since 2008. Look at the latest annual report or wait for the new one on Thursday. In addition, check the amount the owe and compare it to the past.

Navidea apparent low revenues and "high" cash burn rate are due to:

Lymphoseek approval for a limited sector of its potential users. They are seeking to expand the usage as evidence by their recent submission to the FDA.

They also had essentially no sales force when first approved.

NEW Drugs: Navidea has several drugs in phase II/III trials. These trials take large sums of money and time with little or no guarantee of success.

Analyst estimates for earnings are:
Quarters Estimate: -0.07
Year's Estimate: -0.25

The range of estimates for the quarter are: -0.05 to -0.10. Any significant change from that will see some volatility otherwise I do not see any significant resulting from the earnings report.

This is what my brokerage says about CHTP (DO NOT SHOOT THE MESSENGER, PLEASE)

Snapshot
Average Target Price: $5 Long Term Growth Rate: NaN%
Year Ago Earnings: $-0.84 Last Quarter's Earnings: $-0.23
P/E on Current Year Estimate $9,999 P/E on Next Fiscal Year Estimate: $9,999


Current Quarters Estimate: -0.21 Current Year's Estimate: -0.83 Next Fiscal Year Estimate: -0.63


Analysts Recommendations - Zacks.com
Str Buy..Mod Buy..Hold..Str Sell.. Mod Sell.. Avg. Recom.
.3......... 1..... 1 .......0........ 0...... Moderate Buy


Analysts Recommendations - MarketWatch.com
Timeframe Mean.... Buy OverWeight Hold UnderWeight Sell Total
Current Overweight. 3..... 0...... 3..... 0......... 0.... 6
1 Wk Ago Overweight 3..... 0...... 3..... 0......... 0.... 6
1 Month Ago Overweight 3.. 0...... 3..... 0..........0.... 6
2 Months Ago Buy...... 5.. 1.......0..... 0......... 0.... 6


Earnings:
Consensus Estimate
Timeframe # of Estimates High Estimate Low Estimate Mean Estimate Coefficient Variance
This Fiscal Year 6 -0.61 -0.95 -0.83 -14.19
Next Fiscal Year 5 -0.3 -1.03 -0.63 -43.39
Last Quarter 1 -0.23 -0.23 -0.2 NaN
This Quarter 5 -0.18 -0.24 -0.21 -10.96
Next Quarter 5 -0.15 -0.22 -0.2 -13.78

A Merger does not require the joining of 2 or more similar size organizations. A Merger is defined as:

Definition of 'Merger'


The combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock.

Investopedia Says
Investopedia explains 'Merger'


Basically, when two companies become one. This decision is usually mutual between both firms.

It is possible that a firm interested in buying CHTP has signed a general statement of intent with the deal contingent on Northera approval among other things (such as an audit of the books, review of CHTP's existing contracts, etc.)

There is the possibility that CHTP is an a "Quiet Period" pending announcement of a merger.


Quiet Period

The federal securities laws do not define the term "quiet period," which is also referred to as the "waiting period." However, a quiet period extends from the time a company files a registration statement with the SEC until SEC staff declare the registration statement "effective." During that period, the federal securities laws limit what information a company and related parties can release to the public. The failure to comply with these restrictions generally is referred to as “gun-jumping.”


The "Quiet Period" would explain why no Conference Call or further PR has been released.

Nothing strange about it. The action you are seeing is typical of a positive outcome of a binary event. I know you are new to Bio-Techs, so look at the how other stocks performed in the past to FDA and FDA Adcom approvals.

The volatility has drastically reduced. The chances of a major price change before the options (particularly Feb) expire is essentially zero. Therefore the options are trading with their intrinsic value (in other words at or close to the stock price - Option Value).

Unless you anticipate a major move before the third Friday in March, I would look at rolling over for a time further in the future, if I were to roll-over at all.

There are a lot of "good" options out there. Well over 62,000 representing over 6.2 million shares. My guess is a lot of those options are not covered (meaning the creator does not hold the underlying shares of stocks) as such they the creator of the options will have to buy back the options to retire them, or buy enough stock to cover them. This may well be a feeding frenzy today.

Not necessarily true. Options can be traded by the penny through the Philadelphia Exchange, but most brokerage firms will only accept orders in $0.05 increments for options with a trading of less than $3.00 or $0.10 increments for above $3.00.

Example: If you own $4.00calls and want to sell at about $3.00/option then the following sell order prices would be acceptable: $2.90, $2.95, $3.00, and $3.10 but $3.05 would not be accepted.

The only thing I have to add. Is the option to buy (or sell) can be executed at anytime before the expiration date. In other words, if I held $7.00 calls (forget any costs associated with the options) and the stock goes up to $7.50 today, I can exercise the option and buy the stock at $7.00. I do not have to wait until Friday when the stock might be selling for $6.50.

The Chicago Board of Exchange has free online courses dealing with options and how they work. http://www.cboe.com/LearnCenter/Default.aspx

But basically there are two components to the price of an option. The intrinsic value (the stock value - option call price) or (the option put value - the stock price). And a time/volatility value. The closer to the expiration date to closer to the intrinsic value the option should be, with an exception for binary events that can greatly affect the stock value. Essentially the less time, the less chance a event will affect the price. Today (during normal trading hours) Feb $4 calls were costing around $1.80 while the stock price was about $5.00, therefore there was an $0.80 time/volatility component to option price.

Well they are Feb calls, so tomorrow you can expect that there will not be any significant premium due to potential increase in share value. As such they will be worth slightly more than the stock price - $4.00.

Do not know what difference it makes or what you figure on doing with the information, but I am holding some $4 calls.

No, A T-1 halt is for however long the news takes to be released and then an additional x minutes until quotes resumes and 5 minutes for trading to resume, if I remember right.

Yes, you are correct. In addition, the volatility goes down after an announcement of a binary event reducing the premium paid for the option.

Please read the full test results for yourself before making any determination as to whether PBT2 shows promise. The results are posted at http://pranabio.com/news/prana-announces-successful-phase-2-results-huntington-disease-trial#.UwNjNH7nZLN . It is great the it shows that the drug is safe, but it does not show any significant health improvements, that I can see.


Primary Objective: Safety and Tolerability

PBT2, in this study of early- to mid-stage HD patients, was safe and well tolerated, with no significant findings or trends in any of the safety parameters measured.
Tolerability: PBT2 was well tolerated during this study as demonstrated by no difference in the Kaplan-Meier estimates of time-to-withdrawal between the 100mg dose and placebo groups (p=0.297) or between the PBT2 250mg and placebo groups (p=0.173). Of the 109 patients randomized, 104 patients completed the study (95.4% retention rate). Of the five participants who withdrew from the study, one participant in the placebo group and 3 participants in the 250mg group withdrew due to adverse events. One participant did not return for their follow up visit.
Safety: Of the 10 SAEs reported, one was in the placebo group, 3 in the 100mg PBT2 group and 6 in the 250mg group. With the exception of one SAE in the 250mg group, all SAEs were deemed to be not related to Study Drug by the site investigators. The participant who had an SAE deemed related to Study Drug reported a worsening of their HD symptoms during the 4 week follow up period (i.e. no Study Drug administered), after completing the 6 month treatment.
The safety and tolerability profile of either dose of PBT2 was similar to placebo. There were no significant differences in the numbers of participants reporting any particular AE between PBT2 and placebo groups. The most common AE was diarrhea, with 16 participants reporting a total of 20 events. The frequency of this AE was similar across PBT2 and placebo groups.


Secondary Objectives: Efficacy
Main/Primary Efficacy Endpoint: Cognition


Main Composite Cognition z-score and Exploratory Composite Cognition z-score. No statistically significant changes.
Executive Function Composite z-score: PBT2 250mg showed a significant improvement at 12 weeks (p=0.005) and trend at 26 weeks (p=0.069) compared with placebo. On a pre-specified subgroup analysis of early-stage HD (TFC 11-13), the change in Executive Function Composite z-score from baseline at 26 weeks was significantly improved in participants receiving 250mg PBT2 compared with placebo (p=0.038).
Of the two tests within the Executive Function Composite, there was a statistically significant improvement in the Trail Making Test Part B after 12 weeks of treatment compared with placebo (p<0.001) and at 26 weeks (p=0.042). The effect of PBT2 at 26 weeks was dose-dependent (p=0.035).
There were no statistically significant differences between either dose of PBT2 and placebo in other individual tests of cognition over 26 weeks.


Secondary Objective: Efficacy

Motor, Behaviour, Function, Global Endpoints

No significant changes were seen in motor, functional, behavioural or global assessments in either PBT2 treatment group compared to placebo over the 26 week treatment period.
A small but positive signal in TFC was observed on the 13 point scale across the PBT2 groups relative to placebo (mean changes from baseline:
250mg PBT2 = -0.3; 100mg PBT2 = -0.5; placebo= -0.6.


Secondary Objective: Efficacy–Biomarker Endpoint

There were no significant changes in the urine or blood biomarkers assessed at week 26 with PBT2 treatment compared to placebo.


Secondary Objective:
MRI brain volumes and function

Changes in cortical thickness (mm) were mapped at week 26 for the combined treatment group (n=2 250mg and n=2 100mg) compared to placebo (n=2). The rate of thinning in the placebo group was faster than in the treated groups; however the effects did not reach statistical significance.

Some people are making a big deal out of the delay announcement for various reasons.

First, that other PDUFAs were acted upon has no real bearing on Northera. There are 6 different Office of Drug Evaluation under THE OFFICE OF NEW DRUGS (see http://www.fda.gov/AboutFDA/CentersOffices/OrganizationCharts/ucm135674.htm ). I would expect several "divisions" within each of these Offices. Only two have names that indicate they deal with a specific medical area. It is likely and probable that the PDUFA that were acted upon were assigned to other Offices. In addition, I would assume that either the division or his assistant would be required to sign off on any action, and then the specific Office of Drug Evaluation and or his assistant would need to sign, before it is sent to the Director of THE OFFICE OF NEW DRUGS for his approval and signature or his assistant. If the specific head and his assistant of any the areas was absent Friday, then proper (legal) processing of the PDUFA could not occur.

Second, the delay announcement specifically states "AN OFFICE CLOSURE", which would be consistent with the above. Remember there was a storm and even if predicted in advance, it would not be foreseeable to determine what personnel could or would make it into the office, and because a storm is short term in nature, no "emergency or back-up" procedure would be imposed.

I plan to approach Tuesday, identical to Friday, and while a decision early Tuesday would be nice from a stress standpoint, I would not be over concerned if no announcement is made until after the market closes.

PennyStockInvestor:

I forgot to ask, since you stated what I posted was not true, which statement was wrong. I listed 8 facts (all of which are true with maybe the exception of the last which stated essentially stated you do not know for a fact if Northera will be approved or not). If do know that for a fact, then you are guilty of misusing insider information and I do not believe you would have access to that information. Otherwise, you only have your opinion of whether it will be approved or not.

Since, the remaining items on my post clearly stated they were my beliefs and you definitely can not deny I am entitled to my own thoughts, there is no way that section can be not true. You can disagree with my beliefs but you can not tell me they are not my beliefs.

PennyStockInvestor:

Fact: CHTP issued two announcements during the day stating they have gotten information from the FDA yet

Fact: CHTP issued a statement after hours that the decision has been delayed until Tuesday.

Fact: FDA does not meet with companies on decision day

Fact: Any action by the FDA, positive, negative, in-between, has a lot of paperwork associated with. You are dealing a federal bureaucracy and such all i's must be dotted and t's crossed.

Fact: CHTP did not have to issue any statements yesterday.

Fact: Weather is not predictable, particularly 6 months in advance when the PDUFA was determined.

Fact: A biotech stock is almost always volatile on the day of a PDUFA decision (or the day before) if an early morning decision is anticipated.

Fact: You have no more knowledge than the rest of us as to whether Northera will be approved or not.

Now, my beliefs:
1) the first price drop before noon was a typical bear raid, not uncommon for a stock facing an imminent binary decision.

2) the second price drop was due to stockholder(s) selling because they interpreted the lack of decision as being negative.

3) CHTP has shown more consideration to their stockholders by releasing as they did.

4) There is nothing that has changed since Thursday as to chances of approval or the effect it will have the stock price.

5) Nothing in managements actions on Friday will prevent institutional buying.

OT: Sorry to hear about your problem with Schwab. Unfortunately, I can not recommend an alternative as I am happy with OptionsXpress but that is a Schwab company. If you narrow it down to a few choices, you might want to look back at the boards for when LJPC went through their R/S and see how the various brokers handled it. There is nothing more frustrating then owning a stock but not be able to trade it.

What meeting. There was no scheduled meeting of CHTP officials with FDA. There would be an FDA team responsible for pulling together all the paperwork, writing the FDA letter (be it approval, a CRL, or denial), and getting it signed off by all the powers-to-be and getting it send to CHTP. But that would have been totally internal to the FDA and CHTP would not be of it and would not know where it stands at any given time.

CHTP would have had no knowledge of what was happening at the FDA, no knowledge of who may or may not be at work because of the storm, or even unless the government sent notice if the FDA was closed completely for the day.

CHTP management went further than required and beyond what most companies would have done on Friday. They issued multiple statements that there had been no word from the FDA.

They waited along with us for notification from the FDA. If you look to the 2012 decision concerning Northera you will see that notification did not occur until around 7pm. Then they probably called a contact at FDA and got word of the postponement and was probably apologized to and told they all thought someone had notified them. CHTP then notified us of the delay.

Remember, companies are required to report items that significantly affect stock prices within 3 days. They definitely are not required to release statements multiple times saying they have not received any information. Nor did they have to report the FDA delay.

Could things have been handled better? Yes, but given the circumstances CHTP done what they could to keep us informed.

As stated by others CRL = Complete Response Letter. It essentially states we can not approve at the current time for the following reasons. It may or may not delineate requirements for overcoming the objections. Usually if a CRL is received the company will meet with the FDA to further define what is needed.

Note, the FDA can also flatly deny the FPDUA, but rarely does. It can also approve with qualifications, as well as approve without conditions.

It would be too late to short, IMO. When you short a stock you borrow the shares from someone and then sell them. You then have to buy shares to repay the shares the borrowed.

Who said this has been delayed. I have seen FDA approvals and disapprovals occur anytime from 7am to 8pm. There is no reason for concern one way or the other.

According to SEC rules, any significant event that may affect the price of a equity (stock, bonds, options, etc) must be reported to the public within three days.

yes, it is halted but halted because of volatility.

02/14/2014 11:15:52 CHTP Chelsea Therapeutics NASDAQ
LUDP
02/14/2014 11:15:52
LUDP Volatility Trading Pause

Not because of pending news

My understanding is that the FDA can not release any information until after the company makes the announcement. This rule was instituted because some individuals had access to the PR director of the FDA and would find out the verdict before the company announced it and were using this information to trade to their advantage. When looked at by the SEC, this was the compromised reached.

Jacklondon - It is typical for a stock to see a reduction in price immediately prior to a binary event. It is more of the fact the many shareholders do not want to gamble on the results than due to insider trading. Many shareholders that have a profit are selling to protect their gains. The old adage "A bird in the hand is worth two in the bush"

Stock risk - It is always difficult to predict what the value of a stock will be after a binary event. In this case it might even be more difficult. If the announcement is made before the market opens or during trading hours, you will see greater volatility than if is announced after trading is closed particularly with Monday being a trading Holiday.

But since you seem to want a number, conservatively it will be trading in $6.80 if approved and $3.60 if denied. About a 31% swing either way. I will not predict which I anticipate.

OT: