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(Also, meant to add: Thanks for the insight!)
Well, technically, Rida is not an Ariad molecule any longer and it's difficult to call it "in the pipeline," since it's all the way through its Ph3.
But '113 unquestionably qualifies.
Either way, the real question is whether that statement can from Berger during the related interview.
I sure hope so -- nothing like 2 or 3 compounds to follow on after Pona and '113. Can only hope these three are half as good!
Interesting article from Switzerland.
This article is from the Zurich publication Finanz und Wirtschaft. The link is to the original German (which I can't read) and the text is the Google translated version.
There is one tidbit of interest -- the tl;dr audience should scroll to the bottom where I've highlighted it. NB -- Berger does seem to have done an actual intrerview for this piece, so that sentence may be subtly newsworthy.
*****
Attack runs
Carla Palm
The U.S. biotech company Ariad Pharmaceuticals achieved with a drug used to treat leukemia, a foray. You Escapes so far in the ground seemed to be sure of Novartis.
In the shadow of the oncology market leader Roche ( ROG 234.6 -0.34% ) and Novartis ( NOVN 70.75 % 1:14 ) (NASDAQ: ARIA, $ 18.60, $ 3.4 billion market value) of the small U.S. biotech company Ariad Pharmaceuticals is a remarkable foray into the treatment of myeloid leukemia (CML) have succeeded. Iclusig means the promising preparation of Americans since the end of 2012 in the U.S. and since 2 July 2013 is also approved in Europe. Ariad Escapes in so far seemed to be sure ground of Novartis. The pharmaceutical company holds here with Gleevec for years a dominant position. Gleevec, with annual revenues of $ 4.7 billion last the best selling product of Basel and is regarded as one of the first targeted drug in cancer therapy that can directly attack the diseased cells.
But not in all chronic CML patients Glivec works in the long run. To change (mutate) some cancer cells during treatment and become resistant to the drug. Iclusig let these mutations no longer applies and thus a real innovation as CEO Harvey Berger explains in an interview with FuW. Therefore, it is Ariad also succeeded in getting a higher than average price for Iclusig to the health authorities. "The clinical value is high", Berger is convinced.
In the first quarter continued Iclusig in the U.S. $ 6.4 million. In the second quarter it was already $ 13.9 million. The sale was well above analysts' expectations, and Berger is more than satisfied. It is remarkable for him that a large proportion of doctors who are already using Gleevec, has opted for a therapy for their patients with Iclusig. To gain market share, the CEO does not want to express but for the time being.
In Europe Iclusig will initially be in Germany, UK and France on the market. There it is sold with a surcharge to Gleevec. However, the selling price is 20% lower than in the U.S.. Sales and Marketing for Europe is control of Lausanne, where it has already taken office premises on the site of Biopôle parks and according to site employs about twenty people Ariad. The site will be further developed in Europe as manager Jonathan Dickinson affirmed.
Unlike many other biotech companies, Ariad focuses not only on the product. In advanced pipeline there are four other agents to inhibit the signaling pathways of tumors. The broad positioning explains the now high market capitalization of $ 3.4 billion. Berger CEO does not see Ariad because even as a takeover target. Rather, he wants to build the company into a leading global oncology specialist.
*********
So what of four agents other than Iclusig in the pipeline? Clearly '113 counts as one. Maybe "other" is incorrect, and the number includes Inclusig? Perhaps. That leaves at least two others. Some possibilities:
1. Translation error: Someone who speaks Swiss German might chime in. (I'm not sure which area of Belgium binchey is from....)
2. Historical compounds: Did the author include Rida? 1903? Something older? (Maybe not since she specifically said they inhibit signalling pathways.)
3. Compounds vs Indications: Perhaps this is a reference to other indications? (But that's not really referred to as "in the pipeline.")
4. [Your thoughts here....]
So FLOTW's Chardan PT was indeed a fat-finger! Tsk, tsk!
I wonder whether it had anything to do with the "$" being "4+shift."
Either way, $28 is a healthy premium to market, with a useful note on the "better appreciation of Iclusig’s market potential" -- I take that to mean that they recognize the black-box is bunk.
I'd think twice.
The hit-piece tactic works best when there is a dearth of hard data coming from the company, turning the story into a he-said/she-said.
This seems more like the beginning of a string of substantive news catalysts. While they may not hit on all cylinders (T790m is the big question), they bode well.
If the markets hit a rough patch but not a whole-sale rout, we may benefit from some rotation to strength as well.
OK -- perhaps flyonthewall fat-fingered its datum.
Here was the link I ref'd that has pt of $48:
http://www.theflyonthewall.com/permalinks/entry.php/ARIAid1882419/ARIA-ARIAD-initiated-with-a-Buy-at-Chardan
Note Chardan's price target: $48.
Now there's some love!
No, I'm still complaining about that same time.
I'd class "assembling and retaining talent" as part of (1) in my prior post.
It's pretty clearly something that HB does well.
"mediocre" is a bit harsh.
Perhaps a more balanced assessment might be that HB:
(1) did what he is quite good at very well, such as recognizing Pona's significant potential and walking away from (what we have to assume to be) partnership offers that, while big in absolute terms, under-priced the compound; but
(2) stumbled when faced with new tasks for the first time, such as managing the reporting and disclosure of SAEs in the PACE trial, the resulting affects on the label, the media fall-out, and PR regarding the roll-out.
<outrageous counter-factual thought experiment>
Does that mean that ARIA would jump if HB announced his retirement?
IMO, we would get a jump, but not for that reason -- the jump would come from the much better chance of a take-over.
</off-the-wall tangent>
It was Microsoft and Ballmer's retirement.
Also, I've noted that, whatever HB's genius may be at the office/lab, he seems to have made some rookie mistakes -- not the least of which was that amateur-hour conference call.
That's not to say it's a 100% shock, since he is navigating his first marketable drug.
Well, if you weren't sure that it was a foregone conclusion:
BREAKING: Obama: US has 'concluded' that Syrian government carried out chemical weapons attack.
So we'll have to see what the market serves up.
I'd like to think that ARIA has been beated with a bag of oranges for so long, there's not much it can go down. But then a drop to mid-teens as part of a broader market downdraft could be in the cards....
Well, if nothing else, that's certainly not a crowded trade!
Hope you're right!
There have been a few articles floating about discussing how tender offers can actually be quicker and easier than the traditional merger mechanism. There was a (paywalled) article on law360.com this AM.
Part of this turns on a change in Delaware law back around 2007 that streamlined how tender offers can close once the buyer gets 50.1% of the shares.
The context is, I suspect, mostly about using a tender offer structure to execute a deal rather than a hostile bid, but I think it's a interesting thought experiment (if only that) beyond the classic merger model.
A tender offer at $33+/- that valued ARIA at $6.5B+/- could be a closely run thing for those who aren't interested in being assimilated by the PharmaBorg....
That's a puzzling statement, but I assume that you're referring to something like this 2010 Fama/French article:
Luck versus Skill in the Cross-Section of Mutual Fund Returns
The aggregate portfolio of actively managed U.S. equity mutual funds is close to the market portfolio, but the high costs of active management show up intact as lower returns to investors. Bootstrap simulations suggest that few funds produce benchmark-adjusted expected returns sufficient to cover their costs. If we add back the costs in fund expense ratios, there is evidence of inferior and superior performance (nonzero true [alpha]) in the extreme tails of the cross-section of mutual fund [alpha] estimates.
I think it would be kind of humorous in an ironic type of way to find out (which we won't ever, really) that buy-out plans about ARIA were discussed in big pharma board rooms but they all got cold feet about pulling the trigger because of the combination of MRK getting sold a pig in a poke with Rida and the shock black box on Iclusig.
It would, in fact, be odd for ARIA to survive to "adulthood" due in part to these blunders -- sort of like a back-door false-signalling theory.
</junk psychology>
<pure conjecture>
I would say effectively not much.
Ariad's talent is in the rational design and discovery area -- i.e., figuring out what Pona is, rather than how it's made or what goes into it. (Unlike, e.g., Tempur-pedic or Coca-Cola.)
The compound is patented and in the wild, so their IP protection is patent-based.
Is someone going to look at Pona and make a SuperPona? They could try, but they could do that now, I suspect.
</total speculation>
I agree as well.
This survey was like an open-label, one-arm Ph2 trial compared to a double-blind Ph3 w/control arm.
When everyone know what the agenda is, you get weak and misleading statistics.
Thx -- that would be positive color added to their original report, I think.
Is that view separate from or more recent than their initiation of coverage at "hold"?
I suspect it is even better than it first appears, since Criz progression is likely often due to CNS mets.
I suspect that '113's CNS activity will prove to make this a more cost-effective treatment from NICE's QALY perspective.
Third Point out of ARIA
Today's WSJ has an article (paywall) noting that Dan Loeb's Third Point fund, among other moves, closed out its position in Ariad.
It doesn't really offer much in the way of color on the move: new positions included DIS, CF and KO, if you're looking to read tea leaves.
Interestingly, though, he also showed a new position in Elan, which just got bought by Perrigo. Given all the hash-ups at Elan, you've got to wonder whether there was some type of tip regarding the buy-out.
A bit further down the rabbit hole, one might imaging that Loeb had thought ARIA to be a take-over target and now that has passed -- but that would be the most abject level of conjecture.
One less source of selling pressure.
Welcome aboard! (Is that a pun?)
I agree that the significant minority stake is a type of "territory marking" that development stage biotechs accept sometimes -- trading off the possibility of a big future payday for a more certain future. For investors who are willing to ride out volatility, it can be frustrating to find that management doesn't have the same confidence.
I don't think we have to worry about that with HB!
In some cases, that lack of confidence can turn out to be precient (I'm looking at you, Rida!). It might be interesting to see what becomes of the MEDX IP that BMY bought a few years down the road.
As for whether you truly lack the time or patience for twitter, I humbly submit that the length of your post (>140 char!) suggests otherwise!
Perhaps not quite so dramatic. Reaction depends on timing -- if it were to be tomorrow AM, I would think we should close >$20, and continue back over 20 during the week.
If we get there before T'giving, I'd still say it's worth $1+ and then some momentum.
I understand your point, and I would make two of my own:
1. There is either (a) a bit over-reliance on efficient market theory in your statement; or (b) a bit of under-estimation of market risk aversion.
You and I don't need anyone to tell us that EPIC enrollment is proceeding apace and we won't be jubilant when its full. However, one would have to be willfully blind to miss how analysts discount heavily -- and whether that's proper correction for risk or not, that discounting comes out all at once when we hit the cap.
2. My point was more focused on early enrollment, as in earlier than expected.
Do this thought experiment: if they file an 8-K tomorrow at 7:30 AM announcing EPIC full enrollment, wouldn't you be positively surprised? So would everyone else. Just like with an option contract, there's theta decay as we get closer to the date when everyone expects full enrollment (the end of 2013). The sooner we get there, the greater the effect.
Also, keep in mind that enrollment rate is directly proportional to investigator confidence.
IIRC, if you look at some of the foolish investigator-sponsored crud that Questcor was touting (nothing like MD Anderson's legit IS study), you could just tell that no one would enroll -- asking someone to try something that, at best, would work as well as the approved alternative? No thanks.
When the oncologists who know results see a drug that delivers, they get their patients into the studies, especially when there's no placebo control.
Early enrollment = broad acceptance and eagerness to write NRx. That's where the rubber hits the road.
If we can hit full EPIC early enough to suggest an interim look in Q2 rather than Q3, that will be no doubt positive. 150+ sites is alot, but this isn't the type of development we can hold our breath for.
That was the short bus for those of us still trading fundamentals, science, discoveries, and other things that went out with the ivory-billed woodpecker.
Perhaps a bit OT, but this story about an AML patient caught my eye:
http://www.nj.com/business/index.ssf/2013/08/bamboozled_life-saving_transpl.html
It gives you an idea of just how important the economics of coverage are to the payors -- and I think it indirectly reinforces why we should hope that Iclusig can show some ability to allow for pauses in therapy.
I guess the market didn't like my comment. ?!?
That's true, although memory fails as to exactly which indication it was for.