Agreed.

My question was simply whether, from what we expect about '113, we think it would fare better in such an analysis by NICE on the cost per QALY.

Do we think that '113 is going to be run with a chemo control arm?

I sort of assumed that ARIA was looking to do the same type of no-placebo-control-arm registration trial for '113 that they ran in pona, which would sort of obviate the whole "cross-over on progression" question.

But that was purely based on how HB has been touting pona's lab-to-market path, combined with the '113 phase 1+2 initial trial design.

Also, by default, I assume that Pfizer's retort is at least 50% hot air and the other 50% is likely gases of elevated temperature.

But that's just me -- I'm no hedge fund manager who knows a "dirty drug" from my Bberg Terminal.

I have to plead ignorance on how NICE runs their QALY testing -- do we think that '113 will fare better in this type of study?

Test it on me -- Get in line!

Maybe that's ARIA's next drug:

Some type of Super-Xanax+Dramaine+Nexium patch for investors....

Look -- as I noted earlier, HB is doing his job.

But let's not walk through life blinkered to the truth:

At some point, HB knew that the Iclusig label in the US would list every adverse event in the study. If you think he found that out on the morning of December 14 with the rest of us, then I don't think we have much to discuss -- we can just disagree about that.

When a company announces something and I am shocked and disappointed, I chalk it up to being an individual who does his best to collect the information crumbs that fall to the floor.

When a company announces something and all the analysts following the company and its competitors are shocked and disappointed, that's a communication failure.

When it happens twice in four months in connection with the same drug? Well, then you get comments like Ms. McMinn's.

Sell-side analysts may not always be right -- or even close -- but they don't take well to being made to look like chumps and fools. Nor should they.

As I noted, I think I understand why HB said (and didn't say) what he said. And, I'll say, I also understand why McMinn said what she said.

Doesn't make ARIA any less of a buy, warts and all. I'm in up to my eyeballs -- especiially now after this downdraft. But let's not discuss the rain when someone pisses on our feet.

In an ideal world, yes.

The problem that most CEOs face is that they often get stiff push-back from the legal office because (whether you agree with this standard or not) our securities fraud law is about false statements, not about silence.

Granted, there is a thin sliver of occassions where a company has a duty to speak to make a previously-made statement not misleading, but the whole omission area is very slanted in the company's favor.

Every decent securities lawyer would prefer to defend an omission than a overt statement that turns out to be incorrect.

As I said earier, I think there were a number of times that HB could have given better guidance on how this "new and improved" fast approval system works, and it wouldn't have killed them to include a slide in December discussing ALL the side effects in the PACE trial.

In sum, I think we are about $2 to $4 below where we ought to be due to analyst skepticism at this point -- nothing we won't regain in the long haul, but frustrating nonetheless.

If you mean that we're trading around 20 when you think we should be higher, I'm not sure that could be avoided -- maybe by a few dollars -- since we're currently trading with pretty much full info now.

If you mean that we're trading 20% off of our highs after two significant developments that we all generally regard as positive, then I do have a (hind-sight) solution:

Look at the trading on Oct 17-18: I believe that is the day that the FDA's approval and label leaked out. The stock moved up to a new high (approval) and then sold off over the next weeks (label). That was the period when HB should have told everyone about how the FDA labels drugs that are approved without a control arm. I suspect we would have traded flat between Nov and approval and then gained a bit to $21-ish on approval with the label that everyone expected.

Now look at the trading on Mar 14-15: Exact same pattern -- small move up to a new, local high, and then a sell-off -- as the positive CHMP rec was learned of and then the quasi-3rd-line status. Had HB simply warned us that the EU process may be more conservative and there's a possibility of getting a label limited to the trial population, again, we would have traded flat into approval and then up as we got what we expected.

Personally, I chalk these two sell-offs up to "we have a CEO who may be a brilliant MD, but he's basically learning about managing Wall St.'s expectations on the job." And, I might add, learning the hard way. Which is to say, at my expense.

Finally (before this gets too long (too late!)) I would say that we should keep in mind that HB has been trailblazing a bit in this area of Phase 1+2 trials and bringing drugs from lab to market in five rather than 8-10 years. That means that pretty much anything we earn in these next two years is sort of gravy.

I don't know.

To be honest, my first take was that it didn't really matter if the EU indication would be for 3rd-line salvage CML, since that's unlikely to be the source of a top-line beat.

But if it's true that 40% of CML patients begin on das- or nil-, then there could be a more significant reaction.

I'm still skeptical as to the EU top line though -- I think we'll really have to see a quarter of performance, so earlier isn't necessarily better, but at least it would advance the date of (yet) a(nother) binary event for this rollercoaster stock.

I'm saying that both statements are true:

HB says EU indication provides for use after failing 1 TKI.

RM says EU indication requires failure of a 2nd-line TKI.

They're both true.

The extent to which HB's statement means that Iclusig will sell in the EU will be revealed in the top-line numbers.

I hope those sales folks are out there taking docs to strip clubs and phatty dinners -- to the extent that such conduct complies with EU laws and regulations, of course.

I don't really care that much -- my comment was a tongue-in-cheek reference to her earlier $1 price target change....

Ariad PR isn't incorrect if many (40%) of EU patients start on dasa-/nilotinib.

That's a significant number who "fail only 1 TKI."

That it's a 2nd-gen TKI isn't stated, but the PR isn't incorrect.

Thanks -- this was what I was hoping to hear when I asked for someone to correct me!

If true, then we got the "best possible" pre-EPIC label. Hopefully, HB will clarify in May (or sooner).

Again, it'll come down to top line until we see '113 news. Until then (i.e., all of April) get ready to be pushed around by the markets....

GLTA!

That would be stellar -- but do we have any experience that suggests it is probable? Plausible? Possible?

Ms. McMinn will probably come out with a $1 price target cut soon....

Looks like Novartis has more leverage in the EU.

Perhaps it's a tactical move in concert with SAC to scuttle the ARIA share price in preparation for a hostile bid! </kidding>

So your opinion is that someone could fail imatinib and move to Iclusig on that label?

Really?

I would have thought that the 15mg tablet is designed to allow MDs to more easily scale the doses among those that were used in the trials....

I don't understand the basis for that, although I'm happy to entertain the idea that I'm wrong.

The full quote from the recommendation is


This really sounds to me like a patient has to fail imatinib plus another. I suppose you could call it "2nd line" if we've promoted dasatinib or nilotinib to 1st line, but that still makes this a post-dasatinib or nilotinib medication.

The whole point of the US approval was that it put Iclusig on par with dasatinib and nilotinib, so MDs don't have to use those first.

I just don't see that in the EU rec.

As far as the down-draft over the past week, I suspect that this was actually the 3rsd-line status in the EU leaking into the market.

Had people respected the rules on non-public info, I suggest we would have traded around $22 for a few days, and then dropped 10% to where we are today -- steady at about $19+.

We'd be where we are now, but in one fell-out-of-the-bed move.

Someone correct me here (please!), but the way I read the CHMP recommendation, it's for 3rd line only.

Our US approval is for 2nd line treatment: "resistant or intolerant to prior tyrosine kinase inhibitor therapy" -- that's it.

The EU recommendation is for those "resistant to dasatinib or nilotinib [or] who are intolerant to dasatinib or nilotinib." That's a 3rd-line only drug.

I'm not going to say that early EU approval is bad news, but I can certainly see why this doesn't move the needle in a major way for the market.

If this price trend was occurring a month from now in the lead-up to earnings, I would be much more concerned.

As it stands, I think that we clearly lost some institutional presence or had some exits from the secondary -- something along those lines.

I think we've got a lot riding on Q1 top line.

I don't know what those guys are doing to sell prescriptions, but they better be doing it -- Confetti? Jazz hands? Justin Timberlake in a foam pill suit singing "Bring it on in to Pona-ville"? I don't know, but they better be doing it!

In all fairness, this board wasn't much prior to mid-2010....

I added a tiny bit just at the close today -- had I known about the ORCL results, I certainly would have waited until tomorrow!

Unfortunately, short of Euro approval, I don't see too many catalysts prior to earnings in early May.

Of course, there's always the incentive to try to bottom-tick this thing on the next market dip -- I made that mistake and missed out on some of our 2012 run with cash on the sidelines.

IMHO, for anyone whose investment horizon is beyond 2015, there are really few possible entry mistakes at current levels.

Well, outlook for Friday?

It may not be any better than the past few days, and may be worse, now that market bellweather Oracle missed on pretty much every metric and cratered in the after-hours market.

If Ariad's share price is pushed by broader macro/market trends until news breaks, this could see us test $20.

That's very interesing -- since that would suggest a week 10 IMS figure of 66 (66/61 ~= 1.08), which was exactly the number that Jan D. predicted!

Nice one, Jan!

I suspect that Cyprus is more important because of (1) what it says about the state of the EU's banks, and (2) the precedent it sets.

The Cypriot govt was saying right up until Friday that depositors should have no concern over their deposits in the bail-out. PIMCO'S El Arian had an interesting article on the rationale behind forcing depositors to fund the bail-out (he was still against it, tho).

I think that people are concerned this is something of a test ballon for a new tool -- the thin end of the wedge when it comes to introducing a wealth or assets tax.

In the longer term, I agree that Cyprus itself isn't too important. But I did want to point out that one of the topics lately has been just how susceptible Ariad is to macro developments -- and I think we'll get some answer to that this AM.

GLTA!

That would be great. Currently, however, I'm still concerned....

For those of us who have been concerned about macro events as the greatest short-term risk for Ariad's share price, I think that this weekend's bail out of Cyprus could be an issue.

In early Asian forex, the Euro is down -- so USD strength may put some pressure on US equity prices.

+1

I wonder whether JNJ might be a better candidate to think about a buy-out, just because of corporate culture.

As I understand it, JNJ's acquired subsidiaries are afforded an almost unique scope of latitude to retain their own operating style and internal operations. To the extent that Ariad's success is premised upon a human research and development process that would depend on keeping the team together and not rocking the boat, a willingness to accommodate their quirks could be key.

Also, I think that "unconfirmed PR" sounds like a performance category is the difference between passing Ph II and failing Ph III. If that's what the FDA BT designation is based on, it could be a dreadful start for that program.

JMHO, of course!

Dude -- I thought that they had changed the MD Anderson frontline study to a 2nd line study! I almost had to change my shorts!

For everyone else, that study (here) hasn't changed since October.

This was my thought too.

I actually spent some time last night poking through the last proxy to see whether I could find (easily -- very, very easily) find HB's projected share awards.

I didn't see it in the first few minutes, so I quit to watch tennis.

I suspect that NVS knows that 378's only real hope is to get into the market first and get whatever people on it that it can and keep them.

I'm not sure how much lobbying slush they spread around to get their half-assed snake oil in the door so quickly, but it smacks of fear to me.

I think they know that 378 will be a distant also-ran eventually, but just like Iclusig losing scrips to bosulif because it was out 3 months earlier, there is a first-mover advantage.

Ariad has pretty clearly taken a "second mouse gets the cheese" approach, but there is an "early bird" effect.

JMHO

Dude! Bite your tongue!

The last thing we need is some CHK Aubrey McClendon-like jackass-ery bleeding this company white!

Don't get me started on the corporate jet abuse crud -- it's crazy.

;-|

Well, if you've been accumulating all that time, your average price can't be all that bad.

Besides, no one likes to see a CEO sell shares. Everyone gets squirrelly. That's why they created the 10b plan.

I'm not saying that 10b plans totally prevent insiders from exiting when they see storm clouds brewing over the horizon that we can't. But it's better than a wholesale share dump.

I agree I'd rather see HB cling to every share like it's gold, but on some level, somebody's going to sell something eventually.

According to the Form 4, there are two salient points:

1. The two 50k-share sales were part of a 10b-5 plan. So HB basically laid out some stock sales in a plan a while ago with the SEC, and this sale was part of that plan. In theory this reduces the risk that HB is strategically selling stock, but also allows him to diversify his holdings.

2. The 5,400-share portion of those sales was on behalf of a trust.

So that's some color....

http://www.sec.gov/Archives/edgar/data/884731/000112760213010800/xslF345X03/form4.xml

Ha! That's stellar.

My personal suspicion is that it's a typo, since visually the name appears correct due to the leading lower case "L".

But if you copy those letters into a text document and the use a font setting to make them all caps, the error becomes apparent.

Call me a worry wart, but one of my thoughts was that if they have to go through some admin process to change the name on all the approval and submitted marketing materials, could that actually delay the approval? I certainly hope not -- I'd rather go to market with different brand names in the two areas on time!

Very odd...:

Also -- from this -- it seems that Iclusig's name in the EU will be "Lclusig"?

Is that even possible? Perhaps it's a typo in the EU documentation? Or a Glivec/Gleevec situation?

Note that if you do a search for "iclusig" on the EMA's site, you get nothing -- not one hit. But if you search for "Lclusig" (in any form of caps) you will get results.

I find this a bit bizarre.

Perhaps someone heard something from the outcome of the EMA's Pharmacovigilance Risk Assessment Committee meeting that happened last week.

Their agenda (Pona is on p. 13).

The relevant portions:

Pretty bland, but note that they discussed Iclusig's side effect profile....

We traded 300k shares in the last 10 minutes.

From my vantage point (not great) that doesn't look like day traders closing out with market-on-close orders.

That was something odd at the end. That wasn't normal buying pressure.

It could have been a big-ish short getting stopped out and then running through some stops, but I don't think so.

Note that the first 100k shares didn't even budge us. But there was continuing pressure after that -- someone really wanted the next 100k.