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Russia To Cut More Oil Production As Exports Restricted
Russia’s oil production will be cut by another 1 million barrels per day over the next week after its oil exports were restricted due to contamination issues, according to Reuters.
The contaminated crude oil was shipped through Transneft’s Druzhba pipeline, causing the pipeline operator to call on Russian oil producers to request reduced volumes—a 10 percent reduction.
The contamination issue—which Transneft says was deliberate—has been quite a headache for Russia, but European refineries are taking most of the brunt, and have caused Poland, the Czech Republic, and Hungary to release 8 million barrels of oil reserves to keep their refineries refining, and comes at a time when the market is already nervous about tightening supplies as crude production falls in Iran and Venezuela.
Russia’s oil production had already fallen in April to 11.23 million barrels per day, although the levels were still above its production quota that it agreed to with OPEC of 11.191 million bpd. Russia has dropped hints over the last month that it may be reluctant to extend the oil quotas past June—although it has yet to reduce production to those levels.
Saudi Arabia has vowed to respond to market needs as they arise should a shortage occur, but Saudi Arabia was referring to the production losses in Venezuela and Iran—not Russia.
Transneft is largely expected to resume oil flows over the next couple of weeks, although it may take some time to repair any damaged refinery equipment as a result of the corrosive contaminates found in the crude oil.
A criminal investigation is underway to locate the source of the contaminated crude oil. The first clean oil arrived in Belarus today since the complaints of contamination were made.
By Julianne Geiger for Oilprice.com
https://oilprice.com/Latest-Energy-News/World-News/Russia-To-Cut-More-Oil-Production-As-Exports-Restricted.html
Square’s Bitcoin Revenue Jumped to $65.5 Million in Q1, Its Highest Ever
Payments company Square reported its first-quarter earnings today, revealing strong growth in bitcoin sales through its Cash app.
Founded by Twitter co-founder Jack Dorsey, Square reported $65.5 million in bitcoin revenue for the first quarter of 2019. Bitcoin costs, however, are listed at $64.7 million in the unaudited quarterly report, for a bitcoin profit of roughly $832,000.
Those figures top previous all-time highs for Square: The fourth quarter of 2018 saw $52.4 million in bitcoin revenue and $490,000 in profit.
Bitcoin profits in Q1 2019 represent an 80 percent gain over the prior quarter. For all of 2018, the company reported $166 million in bitcoin sales.
Still, bitcoin remains a niche product for Square. Transaction-based revenue in Q1 topped $656 million, according to the report.
The company sells bitcoin to users through its Cash app, a service that expanded to all 50 U.S. states in August 2018.
https://www.coindesk.com/squares-bitcoin-revenue-jumped-to-65-5-million-in-q1-its-highest-ever
Let's hope for a little relief and they blow sells out of the water plus update us on any positive trial data. Even just throw us a bone on when we might see overseas sells begin.
Now until the end of July should be great for biotech/healthcare even in an overall market correction. Keep an an eye out on the charts for another add or entry, GL, We`ll ment ment so money. (-;
U.S. oil ban on Iran begins
May 2, 2019 5:42 AM ET
U.S. waivers on purchasing Iranian oil expired overnight for eight countries, including Iran's main oil customer, China.
Speaking at an oil conference in Tehran, OPEC secretary-general Mohammed Barkindo said his group is working to "depoliticize oil" and "insulate our organization against geopolitics," but didn't directly address the U.S. sanctions.
Some Iranian and U.S. officials project that the country's exports might fall as low as 400K barrels a month by this summer (before the U.S. exit from the nuclear deal, Iran exported 2.5M barrels a day).
insert-text-here
In a report released today, Jotin Marango from Roth Capital maintained a Buy rating on Arqule (ARQL – Research Report), with a price target of $10. The company’s shares closed on Friday at $6.05.
Marango commented:
“We remain high-conviction buyers of ARQL shares and are raising our PT to $10.”
According to TipRanks.com, Marango has currently no stars on a ranking scale of 0-5 stars, with an average return of -5.4% and a 41.2% success rate. Marango covers the Healthcare sector, focusing on stocks such as KalVista Pharmaceuticals Inc, Syros Pharmaceuticals, and Aimmune Therapeutics.
Currently, the analyst consensus on Arqule is a Strong Buy with an average price target of $7.69.
The company has a one-year high of $7.21 and a one-year low of $2.23. Currently, Arqule has an average volume of 1.37M.
Based on the recent corporate insider activity of 17 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of ARQL in relation to earlier this year. Earlier this month, Ronald M. Lindsay, a Director at ARQL bought 10,000 shares for a total of $38,700.
ArQule, Inc. is a biopharmaceutical company, which engages in the research and development of therapeutics to treat cancers and rare diseases. The company discovers, develops and commercializes novel small molecule drugs in areas of unmet need that will dramatically extend and improve the lives of its patients.
https://www.markets.co/arqule-arql-receives-a-buy-from-roth-capital/
LOL, good post, probably thinking they can really have some effect on such a large company.
Even though an analyst can be prejudice with their ratings I believe the below has more rational than TopMarketGainers and what's with the name when you dis the stock?
Guggenheim, RayJay Remain AT&T Bulls Despite Q1 Video Sub Losses
AT&T Inc. (NYSE: T) reported first-quarter results Wednesday that were broadly in-line with expectations, but marred by staggering linear video losses.
The Analysts
Guggenheim Securities’ Mike McCormack maintained a Buy on AT&T with a $35 price target.
The Thesis
AT&T reported first-quarter revenue and EBITDA of $44.8 billion and $14.8 billion, respectively. The results showed slightly weaker wireless and business wireline EBITDA, offset by a rebound in entertainment margins, Guggenheim's McCormack said in a Thursday note.
The analyst raised the total revenue estimate for the second quarter by 1.6 percent to $45.1 billion, saying that the revision is mostly on account of higher wireless revenue. Guggenheim raised its second-quarter EBITDA estimate by 2 percent to $15.4 billion and its EPS estimate by 1.4 percent to 91 cents,.
Guggenheim raised its 2019 revenue estimate by 0.5 percent to $183.1 billion and its 2019 EBITDA estimate by 0.6 percent to $61.2 billion.
While lowering the postpaid handset net add estimate by 24.1 percent to 250,000, McCormack raised the total broadband net add estimate from negative 9,000 to positive 55,000.
AT&T’s stock came under pressure due to higher-than-expected video sub losses, Raymond James’ Louthan said in a Wednesday note.
The roll-off of promotional subs added last year and mixed marketing for the U-verse product explain this, the analyst said.
“Bundling with fiber subscribers and so forth is likely to also bring stability as is the thin client lineup of video in the back half."
AT&T is focusing on improving its 4G experience with carrier aggregation and 5GE launches while it waits for iPhone and Galaxy handsets to drive further demand, Louthan said. The company has access to a substantial customer base due to the FirstNet opportunity, he said.
In the event the deal between Sprint Corp (NYSE: S) and T-Mobile US Inc (NASDAQ: TMUS) fails, AT&T would have an even larger market share in rural areas as it builds out new spectrum and FirstNet over the next couple of years, the analyst said.
Raymond James lowered its 2019 EBITDA estimate from $60 billion to $59.7 billion and its 2019 EPS estimate from $3.59 to $3.57.
Price Action
AT&T shares were sliding by 1.3 percent to $30.38 at the time of publication Thursday.
Even more depressing is posting the same chart/comment twice.
Plus stock is oversold with gap down that "as you know, will get filled." I would say more upside as past gaps down were filled.You look at the 2 year chart you`ll see it broke above it`s downward channel!
5G, $T is on it NOW, AT&T says it's the first US network to reach 2Gbps speeds on 5G
The chest-thumping over 5G continues. AT&T has reported that it achieved the first 2Gbps speeds on a 5G network in the US. It achieved the feat using a Netgear mobile router on the carrier's public-facing network in the Atlanta area. The performance comes less than a month after the provider cracked the gigabit mark in multiple cities.
If you could sustain that performance, you'd download a two-hour "HD" movie in the space of ten seconds, AT&T claimed.
However, the operative term is "if." As we witnessed first-hand with our tests on Verizon's network (disclaimer: that's our parent company), reaching those speeds is currently unlikely with any provider. You need a millimeter wave connection that's rare, especially indoors where the signals fall off quickly. And of course, this is a hotspot device. It's not yet clear how well the tech will fare in phones with built-in 5G. This does show the potential of 5G, but it could be a long while before you can expect this kind of performance outside of ideal conditions.
Verizon owns Engadget's parent company, Verizon Media. Rest assured, Verizon has no control over our coverage. Engadget remains editorially independent.
Good looking chart for the next possible run after the gap fill on Friday. Could start a new run up before and after earnings call May 1st. The company announced it will report financial results for the first quarter of 2019 on Wednesday May 1st (conference call at 9 am ET to discuss results and provide business update).
$ARQL CHART
A few days old but still a good read if one has not seen it.
ArQule: The Ides Of Ibrutinib
https://seekingalpha.com/article/4255319-arqule-ides-ibrutinib
Summary
ArQule is a small cap biotech that develops small molecule kinase inhibitors. The company's lead asset, ARQ-531, is a next-generation BTK inhibitor that sets its sights on ibrutinib's commercial empire.
The company boasts a surprisingly diverse pipeline that features substantially advanced programs--partnered AND wholly owned--and is expected to initiate TWO registrational trials in 2019.
Herein, I conduct a comprehensive valuation and show that the company is a well-rounded small-cap with moderate risk and high potential returns. Risk-Adjusted PT: $9-10.
There is a tide in the affairs of men,
which taken at the flood leads to fortune.
Omitted all the voyage of their life,
Is bound in shallows and in miseries.
On such a full sea are we now afloat;
And we must take the current when it serves
Or lose our ventures. “
-- Brutus, in Julius Caesar
Friends, investors, lend me your ears.
One of Shakespeare’s seminal works, Julius Caesar, serves as a classic account of the challenges and opportunities presented by the succession of power. In this article, I hope to use this idea contained in Shakespeare’s account to explore the complex dynamics in the biopharmaceutical industry. Herein, I will make the business case for ArQule (ARQL), a company developing a next-generation inhibitor of Bruton’s Tyrosine Kinase (BTK). In my last piece, “Et tu, Bruton”, I profiled the scientific background for this technology alongside the commercial implications for this class of next-generation BTK inhibitors. The field has rapidly morphed into a $5-10 billion industry, with the development of IMBRUVICA (ibrutinib), a commercial empire which is co-governed by AbbVie (ABBV) and Johnson and Johnson (JNJ).
ArQule is one of the principal competitors emerging in this space. In this article, I will use a synthesis of popular methodologies to value ArQule.
Discounted Cash Flow (NYSE:DCF). In the analysis section for this piece, I will motivate future cash flows based on a technical and competitive assessment of the company’s lead assets, expanding beyond just the BTK program to examine the company's other small molecule inhibitors. The analysis will justify the market sizing, penetration, and timing of cash flows, and will adjust for risk using an expected return calculation.
Cash – Debt. I will adjust the DCF model to reconcile the company's balance sheet with an equity valuation.
M&A premium. I will asses an M&A premium based on an expected return resulting from the assessed probability of an acquisition in a fixed 18-month time frame. Here I will look at contemporary acquisition premiums and make the case for including an M&A premium in the company's valuation.
The final valuation will be presented as a risk-adjusted price target.
The analysis section will consist of the following:
A breakdown of scientific data, clinical results, and competitive assessments for each of ArQule’s lead programs.
A discussion of clinical and commercial milestones affecting the timing of potential future cash flows.
Market sizing based on segmentation of the relevant indications
A review of the relevant intellectual property
The meat of this article will focus on ArQule’s BTK asset, ARQ-531. The importance is reflected in the title of this piece ad the rationale is obviated by the final valuation as ARQ-531 comprises the bulk of a risk-adjusted valuation.
ANALYSIS
ARQ-531:
In my last piece, I wrote extensively about BTK, the biochemistry of covalent and non-covalent inhibitors, and the competitive ecosystem for next-generation BTK inhibitors in the clinic. As a reminder, BTK is a huge market opportunity that has attracted numerous suitors. In 2018, AbbVie and JNJ reported a combined $6.2 billion in net sales for IMBRUVICA. AbbVie further estimates peak sales for the company around $7 billion, which would place combined revenues well north of $10 billion. This huge market has attracted a number of suitors which are developing both next-generation covalent and non-covalent BTK inhibitors.
Source: Synthesis of publicly available information
Of the growing population of patients treated with ibrutinib, an estimated 27% of patients discontinue ibrutinib due to disease progression. Of these patients, around 80% test positive for a mutation called C481S, which substantially decreases the affinity of ibrutinib for BTK, effectively stunting the activity of the drug. With the sheer number of patients treated with ibrutinib, this represents a substantial patient population, even in the relapsed setting following a second-line standard of care. I have previously estimated this population in chronic lymphocytic leukemia (CLL) to comprise at least 4,000 patients, with another 4,000-5,000 potential patients in other indications. Given current pricing trends of kinase inhibitors commonly ranging from $100,000-200,000, this represents a market opportunity well over $1 billion.
The case for non-covalent BTKi is rooted in bioplausibility, meaning that there is a strong biological rationale for why targeting C481S mutants could work. Ibrutinib binds to the BTK protein, so if BTK changes shape slightly (i.e via the C481S mutation), ibrutinib is no longer able to inhibit BTK signaling. Simple enough, it seems, that all you need to do is design a new molecule that can affect the altered protein. Here, the reasonable investor should be cautious about the potential pitfalls of expecting a therapy that “makes sense” to work. The thesis for non-covalent BTKi is really nested in two assumptions:
Firstly, that ibrutinib relapse is caused by the development of C481S (or similar) mutation, or at least that the mutation contributes enough to patient relapse to constitute a viable target.
Secondly, that non-covalent inhibitors can achieve sufficient target coverage to inhibit BTK activity in wild-type and C481S mutated cells.
Where might these assumptions fall apart? In the clinic, we see that many relapsed patients present with C481S mutations. It is tempting to conclude that patient relapse is caused by a mutation in the BTK protein. However, this is not rigorous because it fails to consider alternative explanations for relapse mechanisms. Here, I will state several of these possibilities alongside my own commentary.
Some ibrutinib refractory patients present with PLCg2 mutations. PLCg2 is an enzyme that occurs downstream from BTK. Cell signaling pathways are intimidating, even for many scientists. When looking at a cell signaling diagram, it is easy to get lost in the maze of funny looking arrows buried in acronyms.
mage result for BTK and PLC2g signaling
Source: Targeting B-cell Receptor Signaling: Changing the Treatment Landscape of B-cell Lymphoma
To explain the concept of cell-signaling cascades, I use an analogy that comes from my experience as an amateur diesel mechanic. Starting a diesel engine requires three things: air, fuel, and compression. Compression is usually provided by a starter. In a typical diesel engine, there will be several components in the starter pathway. A battery provides the source of power, another device called a solenoid regulatescurrent flow from the battery to the motor. The solenoid is controlled in turn by a signal generated when you turn the key.
Source: https://www.carparts.com/classroom/starting.htm
Now, consider several ways in which you could jumpstart the system to bypass the normal firing process.
Firstly, you could short the solenoid, which will cause current to flow from the battery to the starter.
Alternatively, you can short the battery downstream of the solenoid, directly to the starter (at risk of giving yourself as much excitement as a 12V battery is willing to offer). Bot methodsh will kick the engine into action.
Inhibiting BTK is like cutting the wire to the solenoid. It will prevent current flow from battery to starter. BUT, a gain of function mutation occurring downstream can still short circuit the cell signaling pathway at the starter, fueling abnormal cell growth. THAT is the meat of the hypothesis regarding PLCg2 mutations in BTK signaling.
This begets the question of whether ibrutinib-resistance is caused by a mutation in BTK, PLCg2, or something else entirely. Lampson and Brown performed a meta-analysis of ibrutinib-resistant patients that were sequenced for BTK and PLCg2 mutations. They found that 72% of patients tested positive for C481S mutations, of which the majority had mutations in BTK only.
Source: Are BTK and PLCG2 mutations necessary and sufficient for ibrutinib resistance in chronic lymphocytic leukemia?
These data do not allow us to conclude that the C481S mutation causes ibrutinib-resistance. However, we can rule out PLCg2 mutations as a driver of resistance in the majority of patients.
Here we can posit a simple framework for thinking about these patients so far:
Patients with BTK mutations only we can hypothesize to experience the best outcomes in ibrutinib-resistant patients
Patients with BTK and PLC2g mutations we might predict to see a more modest treatment benefit
Patients without either mutation we might predict to have the worst outcomes.
Assuming the absolute bear case, namely, that only patients with the C481S mutation and only that mutation will respond to treatment, we can see that the total addressable market still represents well over >2,000 patients annually in CLL alone, a substantial target market in oncology.
Now, this assumes that ARQ-531 has no effect whatsoever on downstream signaling. In reality, we see some evidence that this molecule may still be able to affect PLCg2 signaling at the “starter”. ArQule has presented data suggesting that ARQ-531 may actually modulate PLCg2 signaling via alternative pathways.
Source: Investor Presentation
In the SDS-PAGE gel above we see that there was less mutated PLCg2 protein in cell lines treated with ARQ-531 compared with ibrutinib. This corresponds with a reduction in pERK, suggesting a potential source of activity distinct from BTK that could affect PLCg2 signaling.
The bottom line? Don’t write off the PLCg2-mutated patients.
Ok, if not PLCg2, what about something else entirely?
To summarize so far, we have seen that the majority of ibrutinib refractory patients have a mutation at the C481 position and that some additional patients have a mutation in PLCg2 which could still be responsive to treatment with ARQ-531.
That leaves around 20% of ibrutinib-resistant patients that have neither a mutation in BTK nor PLC2g. From this, we know that these mutations are not necessary for ibrutinib relapse. The potential alternative explanations for ibrutinib relapse are broad. For example, ibrutinib has several immunomodulatory effects which are not fully understood, including effects on PD1/PD-L1 expression, cytokine release, and differentiation of T-helper cells.
I do not have a reasonable basis for predicting (1) how non-covalent inhibitors may recapitulate the immunomodulatory effects of ibrutinib, and (2) to what extent ibrutinib-resistance is caused by unfavorable changes in the immune environment. This is where the investor must consider the totality of the evidence for and against the role of C481S mutation status in ibrutinib resistance.
All things considered, I like where the mechanism sits.
Is a non-covalent inhibitor powerful enough to overcome mutant BTK?
Earlier, I stated two assumptions--that C481S is a driving mutation for ibrutinib relapse and that non-covalent inhibitors can achieve sufficient potency in vivo. I have since explained in detail why I think C481S comprises a viable target.
I will now briefly discuss this second assumption--why I think a non-covalent inhibitor can achieve comparable target coverage to a covalent inhibitor. For more commentary on covalent vs non-covalent inhibitors, check out the article “Et tu, Bruton?”. I will briefly review some of the key points here.
First, non-covalent inhibitors achieve pharmaceutically relevant potency of both mutant and wild-type BTK.
Source: Publicly available information
Secondly, some of the strongest known bonds in the natural world occur via non-covalent binding. Streptavidin-biotin, for example, has a dissociation constant as high as 10^-14 mol/L. A non-covalent bond is not inherently inferior to a covalent one. There are simply different physical forces at play with a non-covalent bond which usually, but not always, result in the formation of a weaker binding interaction.
Finally, we see that non-covalent inhibitors are able to achieve biochemical potency in human patients treated with ARQ-531, even in patients treated at sub-therapeutic doses, and even in patients without the C481S mutation.
Source: ASH2018 Presentation
Translating theory to patient outcomes:
Beyond the lab bench, there are a number of green lights that I have seen in ArQule’s clinical results for ARQ-531. Keep in mind that the clinical data is early and that all the caveats of small numbers apply.
With ArQule’s announcement on their 4Q earnings call that the first patient in the 65 mg cohort had achieved a partial response with 88% reduction in tumor size, most of the media and investor attention has focused on this single responder. The patient has chronic lymphocytic leukemia (CLL) and tested positive for the C481S mutation, and received prior treatment with acalabrutinib. As such, this response represents an important proof-of-concept in ArQule’s intended target market.
I will point out that this was not ArQule’s first responding patient with ARQ-531. At the American Society of Hematology (NYSE:ASH) meeting this past December, the company showed a partial response (~60% tumor reduction) in a follicular lymphoma (NYSE:FL) patient that was treated at the 45 mg dose. This result came during a meeting where multiple high profile studies in follicular lymphoma fell short.
Source: ASH2018 Presentation
Further, when we look at the waterfall plot for patients treated with ARQ-531 by dose cohort, we see an encouraging trend in the direction of disease control in patients treated at dose levels approaching a theoretical therapeutic window. Patients receiving higher doses of the drug tended to see a larger numerical decrease in their disease burden.
Source: ASH2018 Presentation
With the 45mg patients on study for <10 weeks, vs much longer treatment durations in the other patients, I would not be surprised to see some of these patients achieve responses in the future as their condition continues to improve. For context, the prior responder with FL achieved a response at 45 weeks after undergoing dose escalation. ArQule is now enrolling patients at a 75 mg QD cohort.
As a final comment on the clinical results for ARQ-531, it is noteworthy that no outcomes of atrial fibrillation have been reported so far. Per the ibrutinib label, up to 6% of patients experience atrial fibrillation, a serious side-effect that often results in ibrutinib discontinuation. Atrial fibrillation is believed to result from on-target binding to kinases in the heart. Accordingly, non-covalent BTKi may be able to overcome the on-target, off-tumor effects seen with .
“We must take the current when it serves. Or lose our ventures.”
I want to transition now from a clinical/scientific review to talk about the competitive environment in BTK. Looking at the competitive space, there are really four players developing non-covalent BTKi: ArQule, Lilly/Loxo Oncology, Sunesis, and Aptose.
Source: Company 10K statements
Based on common-sense analysis, the currents of competition heavily favor ArQule. Consider the following points:
Patient Accrual Rules Clinical Progress
There is extensive competition for relapsed CLL patients. There are many treatments approved and under development for CLL; between radiation, surgery, chemotherapy, ibrutinib, venetoclax, rituximab, and immunotherapy, patients and physicians have options. With soon-to-be four non-covalent BTK inhibitors in ongoing clinical trials, patient accrual to these trials will be more challenging than ever. After demonstrating evidence of single-agent activity in monotherapy, I would expect ArQule to garner a substantial edge in recruiting patients that are looking at trying a non-covalent BTKi.
Cash is King
Both Aptose and Sunesis are in a cash crunch. Both have a limited runway and are suffering from depressed share prices. Tight budgets and a dilutive equity offering will distract from their ability to advance clinical trials. By contrast, ArQule has $100 mn in the bank, with near-term milestone payments from a separate program on the table. While Lilly has the fattest coffers of the cohort by far, it is unclear whether Lilly will choose to prioritize the development of LOXO-305 following their acquisition of Loxo Oncology.
The Early Bird
Despite being the first in clinic (excluding Genentech, who discontinued their BTKi program in oncology), Sunesis has struggled to dose escalate Vecabrutinib to a therapeutic dose. A dose-limiting event in their second cohort mandated an extension of that cohort. ArQule now leads the pack with increasing enrollment at therapeutic doses. LOXO-305 entered the clinic late and Aptose has yet to dose their first patient, although they submitted their IND for CG-806 in February.
Beyond BTK: A look at ArQule’s other platforms
While the investor should be drawn to ArQule for the BTK program, there are several quite compelling opportunities that should convince you to stay. Here, I will take a look at the company's lead programs in oncology and rare disease.
Derazantinib:
Derazantinib is a small molecule inhibitor of the family of fibroblast-growth factor receptors (FGFR). The drug is technically classified as a multi-kinase inhibitor because it maintains activity against several other kinases. In early 2018, ARQL outlicensed Derazantinib to Basilea in the US, Europe, and Japan, and to Sinovant Sciences, Ltd in China, Hong Kong, Macau, and Taiwan. The terms from these agreements provide ArQule with:
$13 million in upfront payments
Up to $326 million in regulatory/commercial milestones from Basilea, plus royalties ranging from high single-digit to mid-teens
Up to $82 million in regulatory/commercial milestones from Sinovant, plus royalties in the low double-digits.
The partners are pursuing approval in an initial target market of intrahepatic cholangiocarcinoma (ICCA), a rare form of cancer in the liver. The American Cancer Society estimates that 8,000 patients are diagnosed with iCCA each year. Treatment options are poor for these patients. Only 15% of newly-diagnosed patients are estimated to be operable. Treatment options are limited for patients with non-resectable tumors. They receive either receive chemotherapy or are referred to a clinical trial or to receive supportive care. Lamarca et. al estimate a response rate of 8% in patients receiving treatment with chemotherapy.
Therefore, this indication begets:
A large number of patients in the second-line without viable treatment options, and
A short step to a first line therapy
ArQule previously reported results for Derzantinib at the 2017 ASCO meeting from a Phase 1/2 trial of Derazantinib in patients with second-line iCCA. In the population harboring FGFR mutations, 21% of patients treated achieved a partial response, with an 83% disease control rate.
Based on these data, ArQule launched a registrational trial in 4Q17 that is now being run by Basilea. This is a single arm, open label trial in patients with FGFR2 fusions with at least one prior systemic therapy. The poor outcomes and lack of options in iCCA present a (relatively) quick and easy path to market.
In January, Basilea announced interim analysis from the registrational trial that essentially replicated the previously reported Phase 1/2 results in the first 29 patients treated.
Source: rQuleA Publication
Miransertib/ARQ-751:
Miransertib (ARQ-092) and ARQ-751 are both pan-AKT inhibitors that inhibit the AKT isoforms 1,2, and 3. Miransertib and ARQ-751 differ slightly in the way that they affect the AKT protein. AKT is a protein kinase that comprises part of the PI3K/AKT/mTOR pathway. Abnormal activation of AKT has been implicated in oncology as well as a class of rare diseases such as overgrowth syndrome. I will separate my discussion on each of these programs.
Oncology
The PI3K/AKT/mTOR pathway has been a popular candidate for pharmaceutical development. PI3K pathway signaling is a common motif in many forms of cancer. You may recall seeing this pathway from our earlier cell signaling diagram of BCR signaling where PI3K signaling occurs in parallel to BTK. Just like PLCg2 occurs downstream from BTK, mTOR and AKT occur downstream from PI3K.
mage result for BTK and PLC2g signaling
There are currently three PI3K inhibitors that have been approved by the FDA: idelalisib, copanlisib, and duvelisib.
Source: FDA labeling, corporate 10K
Frankly, these inhibitors have been marginal drugs so far, both clinically and commercially. Four years after approval, Gilead’s Zydelig (idelalisib) did just over $100 million in annualized sales in 2018. Commercial PI3K inhibitors received approval based on surrogate endpoints of progression-free survival (NYSE:PFS) or overall response rate (ORR). I have yet to see a really compelling survival curve for a PI3K inhibitor. Given the harsh side-effects of PI3K inhibitors, like fatal diarrhea and colitis, which have resulted in black box warnings from the FDA, pathway drugs need to make a stronger case for clinical benefit to prompt commercial adoption. This is tough in indications like CLL or non-Hodgkin’s Lymphoma, where survival headlines have been dominated by numerous highly effective drugs in the relapsed setting, like ibrutinib, venetoclax, and now CAR-T therapy.
Despite the development challenges facing the PI3K pathway, the number of product candidates under development are almost too numerous to count.
Source: Chemical data from PKIDB database
At this point, the PI3K pipeline is a virtual kinase lottery, with a high degree of homogeneity among investigative compounds. Each compound has a slightly differentiated set of characteristics. Some are larger (molecular weight), some are smaller. Some target one isoform over another. Some have a higher solubility in a cell’s fatty membrane (called lipophilicity or LogP)—the list goes on. In the above figure, I have chosen to highlight the diversity of these characteristics.
Interestingly, TG Therapeutics (TGTX) edged their name back into the conversation at AACR19 the other week with data from their PI3K inhibitor, umbralisib, in non-Hodgkin’s Lymphoma (NHL). The company reported a 19% complete response rate in patients with a type of NHL called marginal zone lymphoma. (see: AACR: TG Therapeutics' umbralisib shrinks tumors in 52% of lymphoma patients). Umbralisib is a bit of a black sheep as far as small molecule drugs go. Lipiniski’s rule of five measures the “drugginess” for a compound based on a set of molecular properties affecting pharmacokinetics. Umbralisib breaks 2 of these 5 rules and has a LogP that is higher than any other kinase under development. However, it is yet to be seen how umbralisib will stack up against the other commercially-approved inhibitors.
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TGTX Analysis & News - TG Therapeutics, Inc.
Latest Breaking news and Headlines on TG Therapeutics, Inc. (TGTX) stock from Seeking Alpha. Read the news as it...
In contrast to PI3K, targeting signaling downstream maybe has the potential to edge out the benefit/toxicity profile of PI3K inhibitors. AKT mutations specifically occur in about 3-5% of all cancers. Inhibitors targeting these mutations have been hit and miss in the clinic. Roche/Genentech (RHHYB) have produced several rounds of interesting data from ipatasertib, a small molecule AKT inhibitor targeting the AKT 1,2, and 3 isoforms. Ipatasertib was developed by Array Pharma, who has a successful track record developing and out-licensing kinase inhibitors. At AACR19, Roche highlighted data from a Phase 1b study showing a 73% response rate in advanced triple negative breast cancer (TNBC) patients treated in combination with Tecentriq. This comes in the wake of the FDA’s decision to grant Tecentriq accelerated approval in TNBC in combination with paclitaxel.
Ipatasertib is also undergoing a pivotal Phase 3 trial in TNBC in combination with paclitaxel. In the randomized, placebo-controlled phase 2 trial, LOTUS, ipatasertib + paclitaxel showed improved overall survival of 23.1 months vs 18.4 months in the placebo arm.
Where most of the PI3K under development, along with ipatasertib, are ATP-competitive drugs, both ARQ-092 and ARQ-751 are allosteric inhibitors, so-called because they bind to and inhibit AKT by affecting a part of the protein other than its “active site”. ArQule has a handful of single-agent partial responses to show in solid tumor patients treated with ARQ-092 or ARQ-751. These include breast cancer and endometrial cancer—patients with advanced disease that are highly refractory (~8 prior lines of therapy). Because of the advanced stage of these diseases, any activity should not be discounted. BUT, I have a hard time generating much excitement over a 5% clinical response rate.
My expectations for ArQule’s AKT program in oncology are modest. The clinical data has thus far been underwhelming, and the company is facing substantial competition from big pharma with deep pockets and more advanced products. ARQ 092/751 in oncology is a free chip at the roulette table—it has the potential to evolve into a much more valuable asset, although I wouldn’t stake a position on it. The company is wise to keep a seat at the table in oncology while prioritizing the AKT program development in overgrowth syndrome.
Overgrowth syndrome:
Proteus syndrome and PROS are both ultra-rare diseases caused by overactive mutations in the PI3K pathway. PROS (standing for "PI3K related overgrowth syndrome") represents a set of diseases resulting from gain of function mutations in the PI3K gene. Similarly, Proteus Syndrome (NASDAQ:PS) is caused by a somatic mutation in the AKT1 oncogene. Miransertib, as we have already seen, acts on AKT. PROS and Proteus Syndrome are a nasty pair of diseases. Surgery is the standard of care for both and there are no approved systemic therapies available for patients with overgrowth syndrome. Miransertib would be the first approved pharmacotherapeutic option in these patient populations.
Early results with miransertib have been compelling in PROS patients. ArQule measured responses to treatment using Lansky Performance Status, a measure of the functional status of a patient.
Source: Lansky Performance Status
6/8 patients treated with miransertib saw an improvement in Lansky PS, while 2/8 saw no deterioration. Using this metric, 20 points corresponds to the difference between a patient under critical care with moderate to severe restriction, and patient able to self-care, walk, and play.
Source: ASHG annual meeting presentation
Both PROS and Proteus Syndrome are very rare. In the US and EU, ArQule estimates there are potential 300-600 patients with PS and 3-6,000 with PROS. In my opinion, these numbers are overly optimistic. Li, Chang, and Akgumus estimate PROS at an incidence at <1 in 1,000,000 births. This estimate would yield a total market of closer to 300 patients in the US.
However, drug approvals have a history of increasing the prevalence of rare disease diagnosis. This comes with increased physician awareness and education, in part due to the availability of a novel systemic therapy, and also in part due to the effects of pharmaceutical marketing. ArQule has even quantified this effect in a review of rare disease launches, shown below.
Source: ArQule Presentation
While the market size is small, it is reasonable to predict some growth in the total addressable market due to increased awareness surrounding overgrowth syndrome and potential treatment options. My revenue forecasts for overgrowth syndrome are tempered, with annual patient treatment numbers in the double digits. There is a scenario where ArQule could exceed even the bull case I have forecast, by growing the total market sizing and achieving significant penetration in the rare disease community.
Pricing is a sore issue with rare diseases. ArQule has laid the foundation for a pricing model by observing the inverse relationship between price and prevalence. The smaller the market, the higher a price that is necessary to support a return to investors.
Source: ArQule Presentation
Based on the number of patients I expect they will be able to treat, I suspect that a price north of a million dollars per year is on the table.
Miransertib in rare disease indications is likely to attract a different type of partner, compared with an oncology program. I wouldn’t be surprised to see ArQule seek a partnership with a rare disease juggernaut like Alexion as an alternative to issuing dilutive equity offering in the next year. The company's core competencies are in kinase development, not rare diseases, making this candidate an excellent outlicensing opportunity.
The rare disease program also carries with it the potential to receive a priority review voucher from the FDA. In an article last year, I reviewed methodologies for valuing this type of program ("The Science of a Biotech Valuation"). The review vouchers comprise a bizarre program. On one hand, they incentivize drug development in rare and pediatric diseases. On the other, there is no requirement that they be applied to the program for which they were awarded. Further, they can be sold on the open market to another party. Historically, the review vouchers have fetched prices as high as $350 million.
One intriguing proposition if awarded would be for ArQule to apply priority review to a potential accelerated approval for ARQ-531, thus pre-empting competition to capture market share in CLL. The large market size and potential cash flow could support the underlying financial decision-making process in such a case.
Overall, I find the rare disease program attractive for a couple reasons:
Miransertib meets a significant unmet medical need in a patient population that could evolve into a substantial market.
There is a reasonable probability to generate near-term cash flow through execution of a licensing agreement or through the potential sale of a priority review voucher.
The program provides important diversification for the company's pipeline.
Overview of Intellectual Property Portfolio:
ArQule has a well-defined patent portfolio. In contrast to biologics, pharmaceutical patents tend to be more cut and dry. ArQule has issued patents for composition and matter for each of their assets, with patent expiry ranging from 2030-2039. The key patent for ARQ-531 expires at the end of the year in 2035, leaving the company with 13+ years of potential market exclusivity form a prospective 2020-2021 approval.
Source: Google patents
Program Timelines and Milestones:
The company sits on a number of key catalysts coming up in the remainder of this year. At the annual meeting of the European Hematology Association (EHA) in June, the company will release updated data for ARQ-531 and by the second half of this year, they expect to initiate registrational trials for ARQ-531 and miransertib in overgrowth syndrome.
Source: Synthesis of publically available information
Rationale for an M&A Premium
“Remember March, the Ides of March did not Julius bleed for Justice’s Sake”
In my last comprehensive valuation of Loxo Oncology, I declined to use an M+A premium. I did not see an acquisition as a probability at the price levels at the time of the writing. Generally, I think investors are easily drawn into thinking their investments are high probability acquisition targets. In reality, considering there are some 200+ publicly traded biotech and pharmaceutical companies with market capitalization of greater than $400 million, vs 5-10 historical acquisitions in this same cohort, an acquisition is relatively unlikely in absolute terms. Under an assumption of equal weight, there stands a raw probability of 2.5-5% that any given company is acquired. In this article, I will break with my own views on valuing M&A, and discuss why I believe ArQule deserves an acquisition premium.
As AbbVie prepares to undergo significant operational changes with the decline of the Humira franchise, the company will look to solidify their long-term position in heme-onc.
To drive home this point, I will highlight a case study of Novartis’ Gleevec (imatinib) franchise. Imatinib is one of the most effective cancer drugs ever developed. The drug targets the Bcr-Abl tyrosine kinase, in patients that have chronic myelogenous leukemia (CML) with a genetic alteration called Philadelphia chromosome. For many patients with CML, imatinib has turned their disease into a chronic, manageable condition. Accordingly, Gleevec has earned its place as one of the top-selling drugs of all time. Faced with the pending patent cliff for Gleevec, Novartis developed a more potent Bcr-Abl inhibitor, called nilotinib (Tasigna). In 2018, Tasigna achieved just shy of $1.8 billion in net sales for Novartis, mitigating the effects of Gleevec’s vacated sales and protecting market share in CML.
In 2018, AbbVie and Johnson and Johnson reported over $6 billion in combined global sales revenue for ibrutinib. AbbVie forecasts that this number will soon grow to $7 billion. Between venetoclax and ibrutinib, chronic lymphocytic leukemia has become a central feature of AbbVie’s business strategy. At the American Society of Hematology annual meeting in December 2018, the company reported strong results for ibrutinib in combination with rituximab vs FCR in a randomized clinical trial in younger patients with CLL. This now leaves AbbVie with a foothold in every single arm of a treatment algorithm for newly diagnosed multiple myeloma.
https://pbs.twimg.com/media/DsdQWN4X4AEKnLz.jpg
Source: Chronic Lymphocytic Leukemia Treatment Algorithm 2018
There are a few reasons that this provides a powerful business case for AbbVie:
The American Cancer Society estimates that roughly 21,000 patients are diagnosed in the United States with CLL each year.
The prognosis for CLL patients treated with ibrutinib is generally favorable to other more aggressive blood cancers such as acute lymphoblastic leukemia (NYSE:ALL) or non-Hodgkin’s Lymphoma (NHL), meaning that patients remain on treatment for a long time (O, Brien et al report an average treatment duration of 39 months in a 2018 study
AbbVie overwhelmingly controls the market share for first- and second-line CLL.
Many ABBV bulls point to hematology as the new core of the company in a post-Humira era. So how does this come back to ARQL?
Ibrutinib comes off-patent in 2026, leaving the franchise open to competition. For competitors, ARQ-531 could be a gateway into CLL. For AbbVie or JnJ, a next-generation product could keep generic erosion at bay. By contrast, ARQ-531 is patent-protected into 2035.
At worst, ARQ-531 is an ok drug in post-ibrutinib patients with C481S+ relapsed disease. I have previously established that this is a large market in its own right and that the drug could go on to do $500mn-$1bn plus in annualized sales in the relapsed setting alone. Pharma loves small molecule kinase inhibitors—they are well established, cheap to make, and easy to market.
At best, ARQ-531 has a shot at earlier lines of therapy. Reduced cardiotoxicity, or an incremental benefit in efficacy, would give AbbVie (or another suitor for that matter) a fresh product to champion in CLL. Throw in a rare disease program and a product candidate in oncology and ARQL starts to look real attractive as an industry target.
Putting the Pieces Together and Diving into a Valuation
As a reminder, I value each of ArQule’s lead programs based on the present value of future cash flow from that program. For each present value calculation, I use a discount rate of 10%. I account for uncertainty in each of these programs using scenario analysis. First, I calculate the present value of net revenue generated under three scenarios: bear, base, and bull cases. For each case, I state the key assumptions for the corresponding DCF model. Next, I generate a probability weight based on the technical and regulatory probability of success for that scenario. Finally, I calculate the expected value for that program using the associated probability weight.
You will notice that for each program the bear case is that the drug fails. Further, I have modeled a high probability that each drug is not approved.Biotech investing is RISKY and to assume otherwise is to ignore the reality of drug development. A strong investment makes sense of the potential risk by using an expected value calculation that takes into account a high probability of failure.
Scenario Analysis for Future Cash Flows
I have included a sample of the DCF statement used to generate cash flows for ARQ-531 and Derazantinib programs under base cases below. I have chosen not to include a terminal value calculation, despite the fact that ArQule’s patent portfolio exceeds the highlighted 10-year cash flow horizon. Due to the fast pace of innovation in biotech, I do not feel comfortable forecasting cash flows past 10 years. Each cash flow horizon is based on market sizes, market penetration, drug prices, royalties, and other revenues as discussed in the preceding analysis. Any other assumptions are commented as appropriate
Sample DCF Analysis
Next, I estimate the present value of operating and income expenses based on:
The company’s current financial operations
Pro forma expenses derived from the scenario analysis
Projected expenses are used to calculate the net present value (NYSE:NPV) of the combined programs. Cash + equivalents (less debt) are added back to reconcile enterprise value with an equity valuation.
Reconciling Cash Flow Analysis to a Price Target
Finally, I assess an M&A premium based on a 20% probability that the company is acquired within 18 months at a 70% premium to the equity valuation. This is based on a review of biotech M&A for the past two years.
Companies developing small molecule inhibitors have received beefy acquisition premiums. Even Loxo, who carried a hefty valuation into 2019, landed a 67% premium over their 30-day SMA.
Select Acquisition Premiums for Companies Developing Small Molecule Inhibitors
Source: SEC Schedule 14D/9
Acquisition Premiums, other Biotechs
Source: SEC Schedule 14D/9
After assessing an M&A premium, the resulting price target of $9.34 reflects a 68% premium to the company’s current share price of $5.56.
The breakdown of this price target is shown below. As promised, ARQ-531 presents the primary value driver for ArQule.
Et tu, ArQule?
ArQule is subject to the formidable gamut of risks that are standard in the biotechnology sector. These include the following:
Failure to receive full or partial regulatory approval for their product candidates, including ARQ-531.
Failure to successfully commercialize an approved product.
Failure to fund continued business development, research and development.
All things considered, I like how ArQule is positioned to navigate the biotech minefield.
Risk Mitigation
Failure to receive regulatory approval Multiple, independent franchises in oncology and rare disease minimize the downside from a worst-case scenario involving ARQ-531. Further, risk-adjusted cash flow analysis accounts for a HIGH probability of failure, standard to drug development.
Failure to successfully commercialize an approved product Protein kinase inhibitors are one of the most easily commercialized classes of drug in oncology. Market sizing for post-ibrutinib relapsed markets supports a commercially viable population for ARQ-531. Further, ArQule is positioned as first-to-market in CLL which may allow them to edge out their competitors.
Failure to finance operations ArQule has $100 million in the bank which should be sufficient to fund operations for the near future. Near-term milestones for derazantinib and a potential license for miransertib in rare disease provide non-dilutive sources of revenue.
My Takeaways:
ArQule has a long and heretofore unremarkable history of developing small molecule kinase drugs. With ARQ-531, I think they finally may have found a winner. The company is well-positioned to advance the product into the clinic ahead of their competition.
ARQ-531 is technically and competitively positioned as the strongest next-generation BTKi in post-ibrutinib patients, making it an attractive champion for ABBV/JNJ and competitors in hematology/oncology.
Near term opportunities for growth (derazantinib milestone payments, business development for miransertib in overgrowth syndrome) provide a runway for key catalysts in 2H19, including Ph1/2b data for ARQ-531 and miransertib, as well as the initiation of registrational trials in oncology and overgrowth syndrome.
A conservative fundamental valuation (10% discount rate, no terminal value calculation, and ~50% chances of COMPLETE failure for each candidate) still supports ARQL as being materially undervalued. This is consistent with a common-sense macro perspective of ArQule's ~$600mn market cap.
Despite the company's strong runup to start this year, I am happy to continue holding shares of this company below $10, prior to outcomes from any of the company's milestones in 2019.
tw0122
Hope you have already flipped this ETF & are waiting to reenter!
Verastem: A Speculative Buy
https://seekingalpha.com/article/4257144-verastem-speculative-buy
AT&T (NYSE:T) last posted its quarterly earnings results on Wednesday, April 24th. The technology company reported $0.86 EPS for the quarter, hitting the consensus estimate of $0.86. AT&T had a net margin of 11.34% and a return on equity of 13.47%. The company had revenue of $44.83 billion during the quarter, compared to analysts’ expectations of $45.20 billion. During the same quarter in the previous year, the business posted $0.85 EPS. The firm’s revenue was up 17.8% on a year-over-year basis.
A number of other research analysts have also commented on the company. Desjardins reiterated an “average” rating and set a $56.50 price target on shares of AT&T in a report on Friday, April 5th. Cowen reissued a “buy” rating and issued a $35.00 target price on shares of AT&T in a research report on Thursday, January 31st. Barclays set a $32.00 target price on shares of AT&T and gave the stock a “hold” rating in a research report on Friday, January 18th. Raymond James raised shares of AT&T from a “market perform” rating to an “outperform” rating and set a $34.00 target price on the stock in a research report on Friday, March 15th. They noted that the move was a valuation call. Finally, ValuEngine raised shares of AT&T from a “strong sell” rating to a “sell” rating in a research report on Wednesday, March 20th. Two investment analysts have rated the stock with a sell rating, ten have given a hold rating and twelve have issued a buy rating to the stock. AT&T has an average rating of “Hold” and an average price target of $36.26.
NYSE T traded up $0.48 on Friday, hitting $30.82. 258,065 shares of the stock were exchanged, compared to its average volume of 31,732,537. The company has a quick ratio of 0.80, a current ratio of 0.80 and a debt-to-equity ratio of 0.86. AT&T has a fifty-two week low of $26.80 and a fifty-two week high of $34.53. The stock has a market capitalization of $197.06 billion, a PE ratio of 8.74, a price-to-earnings-growth ratio of 1.35 and a beta of 0.59.
The firm also recently declared a quarterly dividend, which will be paid on Wednesday, May 1st. Stockholders of record on Wednesday, April 10th will be issued a dividend of $0.51 per share. The ex-dividend date is Tuesday, April 9th. This represents a $2.04 dividend on an annualized basis and a dividend yield of 6.62%. AT&T’s dividend payout ratio (DPR) is currently 57.95%.
In other news, CEO John T. Stankey sold 3,748 shares of the business’s stock in a transaction on Thursday, January 31st. The shares were sold at an average price of $29.84, for a total transaction of $111,840.32. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. 0.07% of the stock is currently owned by insiders.
A number of hedge funds have recently modified their holdings of T. Oregon Public Employees Retirement Fund lifted its holdings in AT&T by 6,759.6% during the 4th quarter. Oregon Public Employees Retirement Fund now owns 96,680,677 shares of the technology company’s stock worth $3,388,000 after purchasing an additional 95,271,251 shares during the last quarter. Norges Bank bought a new stake in shares of AT&T in the 4th quarter valued at about $2,077,198,000. BlackRock Inc. grew its position in shares of AT&T by 4.0% in the 4th quarter. BlackRock Inc. now owns 454,818,786 shares of the technology company’s stock valued at $12,980,526,000 after buying an additional 17,703,030 shares during the last quarter. Geode Capital Management LLC grew its position in shares of AT&T by 8.2% in the 4th quarter. Geode Capital Management LLC now owns 92,792,834 shares of the technology company’s stock valued at $2,643,990,000 after buying an additional 7,017,620 shares during the last quarter. Finally, Vanguard Group Inc grew its position in shares of AT&T by 0.6% in the 3rd quarter. Vanguard Group Inc now owns 531,005,481 shares of the technology company’s stock valued at $17,831,164,000 after buying an additional 3,379,045 shares during the last quarter. 64.51% of the stock is currently owned by institutional investors.
https://www.americanbankingnews.com/2019/04/26/att-inc-expected-to-post-fy2020-earnings-of-3-61-per-share-t.html
AT&T: The Market Is Wrong
https://seekingalpha.com/article/4256643-t-market-wrong
AT&T: A Lot Of Bad Priced In
https://seekingalpha.com/article/4256672-t-lot-bad-priced
No more than a case of sell the news.
This was a gift buying opportunity today and do not see a likely $29.00 bottom, plus now the stock has to fill the gap it made from being oversold.
Doing the same, been waiting for this overdone reaction to earnings. Scooped up 1500 so far, so the divey will be nice. GLTY
NEW YORK--(BUSINESS WIRE)--WarnerMedia, an operating company of AT&T (NYSE:T), has signed an agreement with an affiliate of Related Companies to sell its space at 30 Hudson Yards for approximately $2.2 billion. The transaction is expected to close in late second-quarter 2019.
WarnerMedia has an agreement to lease the space at 30 Hudson Yards through early 2034. AT&T will use proceeds from this transaction, along with additional planned sales of non-core assets, to reduce its debt.
Morningstar maintains $37 PT:
"We view AT&T’s start to 2019 somewhat more optimistically than the market seems to. While the wireless business and WarnerMedia performed about as we’d expected, the entertainment segment put up surprisingly strong margins. On a consolidated basis, cash flow was solid and the firm made nice progress in its effort to repay debt. Our view of AT&T is unchanged, and we don’t expect to materially alter our $37 fair value estimate. With the market’s negative reaction to earnings, we continue to view AT&T shares as undervalued.
AT&T reported a loss of 544,000 “premium” television customers (its combined satellite and U-verse subscribers) during the first quarter, a figure that appears to have benefited from 117,000 customers not disconnected as a result of a policy change. In any case, customer losses were, by far, the worst on record. The firm’s online television offering, DirecTV Now, also lost customers for the second consecutive quarter (83,000). On the flip side, AT&T easily bested our expectations for revenue per customer. While we remain bearish on the long-term potential of the television business, AT&T’s performance in the quarter far surpassed our expectations, as total television revenue declined only 2% year over year (we expected a 6% decline in 2019).
Total entertainment segment revenue declined 0.9%, the best result in more than a year. With relative revenue stability and continued cost cutting, AT&T also exceeded its promise to stabilize segment margins in 2019. We suspect that a sharp decline in satellite television customer installations, which entail significant upfront expense, played a significant role in cost cutting. If so, we appreciate the decision to absorb customer losses rather than chase uneconomical growth. Still, we expect changing customer habits and preferences will cause a persistent loss of television customers and declining profitability per customer, pressuring entertainment margins over the next several years".
The technicals for T are bullish with a possible trend reversal. The stock has support at $29.00 and resistance at $32.50. The company is next expected to report earnings late July. CFRA rates this stock 4 STARS (out of five) - buy.
RISK: The stock has to drop 3.9% to threaten the break even point. This trade rates 4 keys out of 5 - low relative risk.
CFRA research notes: CFRA Maintains Buy Opinion on Shares of AT&T Inc. We keep our 12-month target price at $35, 9.8x our '19 EPS estimate, a discount to its three-year forward average P/E at 12.0x. AT&T reported Q1 operating EPS of $0.86 vs $0.85, in line with the consensus. In the Mobility segment, revenues increased 1.2%, with 2.9% service growth partially offset by a 4.5% decline in equipment, due to slower phone upgrades. 80k postpaid phone net add came in well ahead of expectations, but we note this was most likely driven by aggressive promotional activity. Sales in the Entertainment Group fell 0.9%, with 544k premium TV net subscriber losses and 83k DIRECTV NOW losses due to the roll-off of promotional pricing. High-speed internet revenues increased 10.2%, on 45k broadband net adds. WarnerMedia revenues increased 3.3% on strong theatrical and television performance. Q1 was very mixed for AT&T; the company is delivering on debt reduction promises but faces considerable headwinds across most of its segments, which we don't see subsiding in Q2.
That's the old Management I remember. Nice deal to have the time to properly introduce Copiktra to the market while waiting for countries to open up and monies to continue the ongoing trials.
Verastem Oncology Announces Amendment to Refinance Hercules Loan Facility
New Terms Provide for Lower Interest Rate and Longer Interest-Only Payment Period
BOSTON--(BUSINESS WIRE)-- Verastem, Inc. (VSTM) operating as Verastem Oncology, (or the “Company”), focused on developing and commercializing medicines seeking to improve the survival and quality of life of cancer patients, today announced its entry into an amendment (the “Fourth Amendment”) to its existing Loan and Security Agreement with Hercules Capital, Inc. (HTGC) (“Hercules”), changing certain terms of the agreement and increasing the borrowing limit from $50 million to $75 million in financing. The increased loan facility proceeds will be available for the ongoing launch of COPIKTRA™ in the U.S., the Company’s other ongoing development programs, and for general corporate purposes, subject to certain conditions of funding.
“We are extremely pleased to execute this new amendment with Hercules as it effectively refinances our existing loan and implements more favorable terms which we believe are more in line with a commercial stage financing arrangement, including a lower overall interest rate and an extended repayment timeline,” said Rob Gagnon, Chief Financial Officer of the Company. “Collectively, the new terms provide greater financial flexibility as we continue to execute on the commercial rollout of COPIKTRA and advance our other pipeline programs. We are fortunate to have such a strong partnership with Hercules, and we appreciate their willingness to work with us to reframe the structure of earlier terms in a way that is helpful to the Company and its stakeholders.”
Under the prior agreement, the term loan provided for interest-only payments until May 1, 2019. Thereafter, amortization payments were to be payable monthly in twenty installments of principal and interest. Under the Fourth Amendment, the term loan will now mature on December 1, 2022 and provides for interest-only payments until April 1, 2021, which may be extended pursuant to the achievement of certain revenue metrics. In addition, this amendment lowers the interest rate by 175 basis points.
Per the terms of the Fourth Amendment, the Company may borrow up to an aggregate amount of $75.0 million, of which $35.0 million was outstanding as of the date of the Fourth Amendment (as a result of the $25.0 million of outstanding principal under the prior agreement and an additional $10.0 million being drawn by the Company on the date of the Fourth Amendment). The remaining $40.0 million of borrowing capacity may be drawn in multiple tranches, including $15.0 million upon Verastem Oncology generating certain pre-specified cumulative net product revenues, and $25.0 million available through December 31, 2021, subject to Hercules’ approval and certain pre-specified conditions.
https://seekingalpha.com/pr/17485248-verastem-oncology-announces-amendment-refinance-hercules-loan-facility
Some good consolidation plus oversold so buying in here. $3.00 a share has held in the past but on any chart level from 2 days to 1 year, we are way oversold.
U.S. rig count declines by 10 in Baker Hughes survey *****BOOM*****
Apr. 18, 2019 1:12 PM ET|About: The United States Brent Oil
The total count of active drilling rigs in the U.S. tumbled by 10 to 1,022 after falling by three in the previous week, says the latest weekly survey from Baker Hughes.
The oil rig count fell by 8 to 825 after gaining 2 a week ago, while gas rigs fell by 2 to 187.
https://seekingalpha.com/news/3452036-u-s-rig-count-declines-10-baker-hughes-survey
Looking good as the oil market consolidates the gains so adding a few more shares today getting ready for the next run....
Update on new study posted today for a Phase 2 Study of Umbralisib and Rituximab as Initial Therapy for Patients With Follicular Lymphoma and Marginal Zone Lymphoma
Brief Summary:
This research is being done to assess Umbralisib and Rituximab as a first line therapy for Follicular Lymphoma or Marginal Zone Lymphoma.
https://clinicaltrials.gov/ct2/show/NCT03919175
Dr. Shah on Overcoming Resistance to BTK Inhibitors in MCL
Bijal D. Shah, MD
Published: Tuesday, Apr 16, 2019
Don`t let the shorts shake you out, that`s teri game!!!!
Watch this new video:https://www.onclive.com/onclive-tv/dr-shah-on-overcoming-resistance-to-btk-inhibitors-in-mcl
Bijal D. Shah, MD, associate member, Department of Malignant Hematology, Moffitt Cancer Center, discusses overcoming resistance to BTK inhibitors in mantle cell lymphoma (MCL).
Ibrutinib (Imbruvica) and acalabrutinib (Calquence) are both FDA approved for patients with relapsed/refractory MCL, but it is not standard practice to give these agents consecutively. This is due in large part to the overlapping mechanisms that drive resistance to these BTK inhibitors, says Shah. Moreover, mutations like p53 tend to create a more aggressive disease, limiting physicians’ ability to salvage with another BTK inhibitor.
Ongoing research is looking at whether an alternative method of blocking the B-cell receptor can overcome resistance to BTK inhibition. For example, an ongoing trial is looking at the combination of duvelisib (Copiktra), a PI3K gamma and delta inhibitor, and the BCL-2 inhibitor venetoclax (Venclexta). The hope is that the combination can attack the B-cell receptor from a different angle, and in doing so indicate whether the downstream mutations are as pivotal in cancer proliferation as believed to be.
U.S. crude supply fell 3.1M barrels last week, API says
Apr. 16, 2019 4:50 PM ET Carl Surran, SA News Editor
The American Petroleum Institute reportedly shows a draw of 3.09M barrels of oil for the week ending April 12, vs. a build of 4.1M barrels in the previous week.
Gasoline inventories reportedly show a draw of 3.56M barrels, and distillate inventories show a build of 2.33M barrels, while Cushing inventories had a draw of 1.56M barrels.
Nymex crude recently was at $64.28/bbl in electronic trading, up from today's $64.05 settlement price.
https://seekingalpha.com/news/3451272-u-s-crude-supply-fell-3_1m-barrels-last-week-api-says
So we receive 2 ODD`s in a weeks time frame and this is how the market treats the stock. When they start reporting more positive trial data this BS will end so investors here need to contain their emotions as the company keeps delivering. It's all about time in this stock now, not time trading......
TG Therapeutics receives ODD for umbralisib for phosphoinositide-3-kinase (PI3K) delta inhibitor, umbralisib (TGR-1202), for the treatment of patients with all three types of marginal zone lymphoma (MZL): nodal, extranodal, and splenic MZL.
TG's umbralisib an Orphan Drug in U.S. for type of slow-growing NHL
Plus earlier these ODD`s:
TGTX granted 3 different ODDs (Orphan Drug Designation) for lymphoma by the FDA
-Treatment of nodal marginal zone lymphoma
-Treatment of splenic marginal zone lymphoma
-Treatment of extranodal marginal zone lymphoma
Also ArQule initiated at RBC Capital ArQule initiated with an Outperform at RBC Capital. RBC Capital analyst Gregory Renza initiated ArQule with an Outperform rating and a price target of $9. The analyst is positive on the company's "unique clinical portfolio of precision-based kinase inhibitors in oncology and orphan disease." Renza also expects that portfolio to appreciate over the year with additional clinical data for ARQ '531 inhibitor and progress on miransertib further de-risking the investment story.
Insiders still purchasing stock:
April 11, 2019, it was reported that a Director at Arqule (ARQL), Michael Loberg, exercised options to buy 10,000 ARQL shares at $3.87 a share, for a total transaction value of $38.7K. The options were close to expired and Michael Loberg retained stocks.
Following this transaction Michael Loberg’s holding in the company was increased by 6.15% to a total of $976.4K. Following Michael Loberg’s last ARQL Buy transaction on December 18, 2015, the stock climbed by 3.6%.
https://www.smarteranalyst.com/brief/a-director-at-arqule-is-exercising-options-2/?mod=mw_quote_news
TG Therapeutics Inc. (NASDAQ:TGTX)
TG Therapeutics is a clinical-stage oncology company, but it’s yet another that presents a potential opportunity. The company recently released positive data from a pivotal trial of Umbralisib, its lead clinical candidate. This asset is key!
One of the most successful cancer drugs seen in recent year is Imbruvica, a tyrosine kinase inhibitor from Bruton. A short while ago, the company’s product became the first chemotherapy-free treatment option for newly diagnosed patients with a common form of leukemia. Unfortunately, about a third of patients discontinued treatment. Umbralisib has shown to only have a 13% discontinuation rate and could prove to be a disruptive force in the market.
Moreover, like the others on the list above, TG Therapeutics has an impressive pipeline. It consists of two late-stage assets in four clinical development programs and six early-stage assets. The strong pipeline and the potential of Umbralisib leads me to believe that TG Therapeutics is a strong opportunity in the market.
https://www.gurufocus.com/news/845511/5-oncology-companies-that-are-set-to-run
Crude Fundamentals Are Now Bullish
https://seekingalpha.com/article/4253477-crude-fundamentals-now-bullish
Winning Bounce/Lag Momentum Stocks For Week 15 Of 2019 (4/8-4/12)
Leveraging and Comparing Next Week’s ETF Picks
So far this year, we have seen remarkable gains by Bounce Lag Momentum picks, by leveraged Dow 30 picks, and now we will look at gains possible through exchange-traded ultra funds (ETFs). If we are looking for quarterly gains in excess of 100%, it does not appear to me that we can reach that goal without some form of leveraging. Let’s compare what we have seen to be possible in the first quarter of 2019. The following table reports the best results by the BLM method, the Dow 30 method, and by using Ultra ETFs.
The implication of the above table is that ultra ETFs probably provide the greatest return for the least hassle. Based on this information, my ETF picks for next week are the Direxion Daily S&P Biotech Bull 3X Shares ETF (LABU), the VelocityShares 3x Long Crude ETN (UWT), the ProShares UltraPro 3x Crude Oil ETF (OILU), and the Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 3X Shares ETF (UBOT).
https://seekingalpha.com/article/4253434-winning-bounce-lag-momentum-stocks-week-15-2019-4-8minus-4-12
A top momentum play
George Budwell (TG Therapeutics): Shares of the pre-revenue biotech TG Therapeutics have more than doubled in value since the start of the year, thanks to a string of positive clinical updates for its blood cancer duo of umbralisib and ublituximab.
First up, a mid-stage trial evaluating umbralisib monotherapy for marginal zone lymphoma reportedly achieved its primary endpoint of overall response rate for all treated patients. The company, in turn, hopes to turn this mid-stage success into an accelerated approval in the U.S. by next year. TG is also slated to release more top-line data from this ongoing mid-stage later this year that could lead to rapid regulatory approvals for patients with follicular lymphoma and small lymphocytic lymphoma.
The big prize, however, is the upcoming late-stage readout for the combination of umbralisib and ublituximab (or U2 for short) in patients with chronic lymphocytic leukemia (CLL). TG's goal is to demonstrate that U2 produces a superior progression-free survival rate in CLL patients, compared to those receiving a cocktail of obinutuzumab plus chlorambucil. This next major clinical catalyst should come into play by no later than mid-2020.
What does this all mean? The key item is that TG seems poised to become a commercial-stage biotech within the next 12 to 16 months and that simple fact should keep the company's stock headed in the right direction. Now, a clinical setback is always a concern with these types of companies, but TG's blood cancer pipeline has been producing some truly impressive results of late. As a result, TG's stock arguably sports a rather intriguing risk-to-reward ratio right now.
https://www.msn.com/en-us/money/topstocks/3-top-biotech-stocks-to-buy-in-april/ar-BBVJb8A
How high will the Healthcare/Biotech sector go in 2019?
So what's the answer? My answer is very similar to the 2018 results. I expect we will see very strong gains continue into the first half of the year and taper off for this sector as they have every year since at least 2015. Many of the gains through the April to July seasonality period have been quite strong in the past and delivered a large percentage of the annual gains for stocks in this sector. As I continue with long positions in Healthcare and good gains in LABU year to date, I expect to participate in this effect until it is arbitraged away.
https://seekingalpha.com/article/4252996-healthcare-breakout-beat-2018-forecast-high-will-go-2019
Interview today with CEO Michael Weiss on TD Ameritrade network:
https://tdameritradenetwork.com/video/rB4AoWndGq-BaelyAfgD8w
Verastem initiated at Cantor Fitzgerald Cantor Fitzgerald starts Verastem with Overweight, $5 price target. Cantor Fitzgerald analyst Alethia Young started Verastem Oncology with an Overweight rating and $5 price target. The launch of the company's first drug, Copiktra, is in the early days and investor expectations remain very low for commercial potential, Young tells investors in a research note. The analyst sees an opportunity for Copiktra, due to unmet need in the 20,000 relapsed/refractory chronic lymphocytic leukemia/small lymphocytic lymphoma and follicular lymphoma patients. The market under appreciates the commercial potential for Copiktra, says the analyst.
https://thefly.com/news.php?symbol=VSTM
Single agent umbralisib effective for relapsed slow-growing lymphoma
MD Anderson Phase II trial shows drug well tolerated with high response rates for marginal zone lymphoma
MD Anderson News Release April 01, 2019
A study at The University of Texas MD Anderson Cancer Center revealed the investigational drug umbralisib as an effective treatment for patients with relapsed marginal zone lymphoma (MZL). Findings from the Phase II trial were presented by study co-lead Nathan Fowler, M.D., associate professor in the Department of Lymphoma & Myeloma, at the AACR Annual Meeting 2019 in Atlanta.
MZL is a low-grade non-Hodgkin lymphoma that accounts for 6 percent of all lymphoma diagnoses. Although it is treatable, many patients relapse, at which point few treatment options exist.
“Umbralisib is part of a new class of drugs that are quite active in low-grade lymphomas,” said Fowler. “These PI3K inhibitors have shown activity across a spectrum of low-grade lymphomas and are effective in shutting down some of the key signaling that is occurring with MZL.”
The research team reported 55 percent of patients who had at least six months of follow-up had a partial or complete response after receiving umbralisib, a small-molecule inhibitor that targets a signaling pathway linked to MZL cell growth and expansion. Felipe Samaniego, M.D., associate professor in Lymphoma & Myeloma, was co-lead for the study.
The trial enrolled 69 patients, with 38 patients responding favorably and progression-free survival was 71 percent after one year. The patients received umbralisib orally once a day.
“This study is ongoing and we have yet to reach a median duration of response, although most of the patients who received the drug remain in remission,” said Fowler.
The average MZL patient is diagnosed at about age 60 and is typically treated with a monoclonal antibody called rituximab either alone or in combination with chemotherapy.
“This disease is initially quite treatable with several good options for patients that result in high response rates,” said Fowler. “Unfortunately, for about 70 percent of these patients, relapse occurs and there are limited treatment options at that time. That relapse can occur within a year or it can take several years, but most patients will eventually stop responding to standard treatment.”
Fowler added that his team was specifically looking at patients who had failed several standard treatment options including chemotherapy or monoclonal antibodies. He is encouraged that there are several novel therapies for less common lymphomas such as MZL.
“At MD Anderson, we have been fortunate to lead the development of several of these targeted drugs in lymphoma,” he said. “Phase I studies conducted here with PI3K and BTK inhibitors has now resulted in Food and Drug Administration approval of many of these drugs across several types of lymphoma.”
Other institutions who participated in the study included Jagiellonian University, Krakow, Poland; the Institute of Hematology and Transfusion Medicine, Warsaw; Levine Cancer Institute, Charlotte, N.C.; the Sarah Cannon Research Institute, Chattanooga, Tenn.; King’s College Hospital NHS Foundation Trust, London; the Sara Cannon Research/Florida Cancer Specialists, Fort Myers, Fla.; John Theurer Cancer Center, Hackensack, N.J.; Copernicus Memorial Hospital, Lodz, Poland; Moffitt Cancer Center, Tampa, Fla.; Universitá Vita-Salute San Raffaele and IRCCS Istituto Scientifico San Raffaele, Milan; European Institute of Oncology, Milan; Rocky Mountain Cancer Center, Aurora, Colo.; Willamette Valley Cancer Institute, Eugene, Ore.; Compass Oncology, Vancouver, Wash.; Columbia University Medical Center, New York; Sir Charles Gairdner Hospital, Perth, Australia; TG Therapeutics, Inc., New York; and University of Bologna, Italy.
The study was funded by TG Therapeutics. Fowler serves on the scientific advisory board for TG Therapeutic. A complete list of disclosures is available in the AACR abstract.
https://www.mdanderson.org/newsroom/single-agent-umbralisib-effective-for-relapsed-slow-growing-lymphoma.h00-159301467.html?cmpid=twitter_newsroom_lymphoma_clinicaltrials
Nice $39.00 PT is looking about right:
Ladenburg Thalmann analyst Matthew Kaplan reiterated a Buy rating and raised his price target to $39 from $27on TG Therapeutics ...
https://www.streetinsider.com/Analyst+Comments/TG+Therapeutics+%28TGTX%29+PT+Jumps+To+%2439+At+Ladenburg+After+AACR+Data+Presentation/15327658.html