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>> impending short squeeze that never seems to happen.
Just to be clear, when I said "once-a-year" I meant once-a-year across the whole market, not for each stock. So that's why those impending squeezes never actually materialize.
I'd love to see an analysis of how stocks which are "hard to borrow" do on average. I'd bet they underperform their sectors.
Peter
>>"improperly used list"
How about "short squeeze?" Actual short squeezes are once-a-year affairs, maybe less. The most famous recent one I can think of was VW/Porsche:
http://www.nytimes.com/2008/10/30/business/worldbusiness/30iht-norris31.1.17372644.html?pagewanted=all&_r=0
Peter
>FGEN
This was their first Phase II. I suspect they must be saving the full phase II results for a higher impact journal.
Not a lot to be concluded from this paper other than the drug worked better than they expected, leading to a protocol revision to stay within the FDA's EPO-based limits on rate of increase in Hb.
It's notable that the highest EPO levels they saw were physiologic - that is they were comparable to what you see without intervention after acute bleeding or after moving to a high altitude.
Peter
>>In a marriage of equal partners, i would expect that.
Looks to me like Clovis is the one paying for the trial here. So maybe not exactly equal partners.
Peter
Seeing the diseases listed in his tweet below are 3rd-world diseases, hard to see a price-increase strategy here:
>>Spending a lot of time focusing on rare infections. African trypanosomiasis, schistosomiasis, Chagas. The world needs more treatments<<
But he's smart enough on the business side to have some sort of plan for the US too I would think.
Peter
Shrekli's new company gets significant financing - going after a significantly under-served area:
http://www.xconomy.com/new-york/2015/08/10/shkreli-leads-90m-round-for-new-startup-turing-pharma/
And Martin (perhaps understandably) didn't appreciate the title of this post:
http://www.fiercebiotech.com/story/shkrelis-turing-pharma-banks-90m-murky-funding-round/2015-08-10
>>"Further questions about the company's financials were met with a terse email from Shkreli asking FierceBiotech not to contact Turing again"<<
Peter
>>CELG partner implied values
Looks to me they start with the market cap of the collaborator, decide what proportion of that market cap is due to the particular drug being analyzed, and then derive a comparable value for CELG's share of the drug based on the profit split.
Peter
(OT)
This apparently could be a big deal:
>>The alpha penalty for upsizing is something that could presumably be negotiated with the FDA.
Maybe one of the stats gurus could chime in, but changing the size of the trial based on the degree of efficacy already shown (as opposed to number of events etc.) seems above and beyond a typical alpha spend calculation.
Peter
>>n case #2, the DSMB might recommend upsizing the enrollment
I think that would play havoc with the significance analysis. The case you describe is different from an upsizing following a power analysis.
Peter
>>FDA Clears First 3D Printed Prescription Drug
One of my friends was CEO of this company a few years back, and I got to try a one-gram calcium pill manufactured using this process. All I can say is it felt like a magic trick - I put the very big "pill" (which looked like a small hockey puck) on my tongue, took a small sip of water and the whole pill simply disappeared.
Peter
>>It is mind-boggling when a taxi company has a market cap of Lockheed, Lows or 3M corporations.
Think what their margins must be. Even better, think what their margins on new revenue must be - surely close to 100%.
The regulated taxi industry across the world is fighting a rearguard battle, but eventually it is a battle that they will surely lose most places.
Peter
>>FB paid 22B for WhatsApp
Looks to me like they knew what they were doing:
http://www.businessinsider.com/facebook-mobile-ads-responsible-for-all-growth-since-ipo-2015-7
Peter
Just to be clear on my position here, I do believe that if the overall market tanks the biotechs will tank along with it, and likely harder given they generally have a high beta.
(I am firmly convinced biotechs should not have as high a beta as they actually exhibit, but that's an altogether other discussion. )
Peter
>>rate of buyouts
This idea is complicated by the fact that there are three separate parameters in play:
- number of buyouts per unit time;
- size of buyouts (market caps of acquired companies);
- premiums (which are sometimes deceptive when a buyout has been rumoured for a while)
If I had to go with one number, I'd use the number of buyouts in a quarter times the size of the median acquisition in that quarter.
Peter
>>what would be the impact if any, if Fed raises interests later this year?
That's a very hard question indeed.
In analyzing the issue, let's try to separate fundamentals from investor sentiment (of course they are in reality closely related).
From a fundamental valuation viewpoint the key is what happens to long term rates once short rates start to rise. If long rates rise, then any long-term project becomes less valuable as does the discounted value of cash-flow streams. Both those would serve to depress biotech stock prices. But will long rates actually rise? There are arguments in both directions and I'm not smart enough to know how reality will play out.
The second issue is investor sentiment. The reality here is that any rate rise will be marginal, but that doesn't mean investors won't overreact in some way. I can't imagine a rates rise will be greeted with joy, so I suspect the danger is pretty much all on the downside.
I really don't know what the defensive plays are in response to a rate rise. Perhaps a stock like Wells Fargo.
Peter
>>A bubble burst in biotech stock prices -- why are we not now experiencing it?
There are several related phenomena at work here:
1. The big biotech stocks like GILD are making huge amounts of money
2. The FDA has been more cooperative in getting breakthrough-type drugs on the market more quickly
3. There is a much greater emphasis on rare diseases where there is much less competition, chances of success are higher and pricing is very good
4. More focus on biologics which tend to have a greater success rate and also much longer effective exclusivity
4. Perhaps most significantly there has been a steady stream of M&A - the big pharma are short pipeline and so they acquire late-stage biotechs
5. Exciting new science (like immuno-oncology).
5. Very low long-term interest rates that support investment in longer term projects.
My own view is that as long as M&A continues at this pace then we are not in a bubble. Once that starts to slow down, I would become much more cautious.
Peter
OT
>> take Q10 to hedge the secondary effects of Crestor?
I actually posted about this on SI - turns out Q10 doesn't ameliorate statin-induced muscle myalgia:
http://www.siliconinvestor.com/readmsg.aspx?msgid=30166741
(OT)
>>why the low HDL's
Assuming you've always had low HDL, chances are it's mostly genetic - not one single gene, but a bunch of smaller effects.
A complex genetic analysis published a few years ago suggests that genetically low HDL is not strongly correlated with heart disease at all, at least not in any straightforward manner.
Exercise (particularly high-intensity interval training) can increase HDL some. In one study krill oil raised HDL, but that study has not been replicated to my knowledge. Finally, avoiding metabolic syndrome is key.
Peter
(OT)
>>Slo Niacin
Bad idea in my view. Aside from potential liver issues with high-dose OTC niacin, Merck's large niacin trial (25k patients over 4 years) showed reduced LDL, increased HDL (sounds good, right?) but no decrease in cardiac events at all and marked adverse effects including increased diabetes. Some of the AE's could have come from the other ingredient designed to stop flushing, but likely the diabetes at least related to the niacin.
Other niacin trials have similarly not shown any actual improvements except for improved HDL, which is likely just a red herring here.
Peter
Actually I would have thought more chance of an intervention working in the females, so surprised they have been ignored to date.
Peter
>>how much patent protection will FG-3019 have left if it gets to market
Well it's a mab, so between the patent extension and the time it takes to make a biosimilar and get it approved, they will have decent period of effective exclusivity.
They also have some patent applications surrounding DMD, but who knows if those will hold up to prevent competitors:
https://www.google.com/patents/EP2448971A1?cl=en&dq=inassignee:%22Fibrogen,+Inc.%22+ctgf&hl=en&sa=X&ved=0CDgQ6AEwBDgUahUKEwizz63P3vzGAhVFJR4KHXfmBfo
Peter
>>fgen tried to get a broad patent preventing others from competing easily in the space, which doesnt sound like it is holding up too well (thus far)
has zero implications for roxadustat launch and commercialization
Yes, that's exactly right.
I don't actually know of a successful (in the sense of excluding other drugs from a whole field) broad "method" patent. Maybe they exist, but they are certainly not common.
This is the best example I know - Puma has a European patent (ex-Pfizer) for treating T790M mutations:
http://www.pumabiotechnology.com/pr20140206.html
Peter
>>FGEN - competition for cataract treatment
No, the FGEN approach is a treatment for damaged corneas, not cataracts (which involve the lens, not the cornea).
It is possible that this new drug (really a new application for an old drug) might improve cornea opacity too.
Peter
>>AKBA, which is a competitor of FGEN in the HIF arena, has seen its shares increase by 50% in the last month
There were some folks on twitter that were plugging some procedural victories by Akebia in some foreign patent suits as key. These patents if upheld might not allow Akebia freedom to operate, but some twitterati mistakenly thought they were relevant to FGEN's own drugs.
http://cdn.ca9.uscourts.gov/datastore/opinions/2015/07/16/15-15274.pdf
http://www.americanbankingnews.com/2015/06/04/brean-capital-reaffirms-buy-rating-for-akebia-therapeutics-akba/
Peter
>>NeuroPhage is seeking permission from the Meals and Drug Administration
LOL
>>did not once mention anything at all about new HCV regimens
The dog that didn't bark often reveals more than the dogs that bark.
Peter
(OT)
Results of the contest - DonShimoda wins by a nose, with a pick of 15:
http://www.siliconinvestor.com/readmsg.aspx?msgid=30156877
Peter
(OT)
>> who the other contestants are.
Mostly folks from SI so far - deciding just who they might be, and how they might think, is part of the puzzle here.
15 entrants so far - I'll post results tomorrow.
Peter
Some people have asked about what book - it's mentioned on SI, but I'll repost here:
>>This is a fun and easy-to-read book on the history of behavioral economics:
http://www.amazon.com/Misbehaving-Behavioral-Economics-Richard-Thaler-ebook/dp/B00NUB4GFQ/ref=tmm_kin_swatch_0?_encoding=UTF8&sr=1-1&qid=1437320967
I do have the impression that the field has kind of slowed down (haven't finished the book yet, so maybe Thaler deals with this).
Here's a discussion on recent developments (some relevant to investing):
http://noahpinionblog.blogspot.com/2014/02/behavioral-economics-vs-behavioral.html
Peter
(OT)
Here's a simple but interesting game (mentioned in a book I am reading) which is tangentially investment-related:
http://www.siliconinvestor.com/readmsg.aspx?msgid=30154889
PM me on SI or here with your entry.
Peter
>>Are you holding the stock until BO or after data is released?
I'm not now and never have been a shareholder - as I explained previously, I barely follow the stock - just responding to a post asking for my take on the situation.
So really any views of mine are not worth much here at all.
Peter
>>why they've been unable to make a deal this late in the game
In general I feel that big pharma are risk-averse - they prefer to pay up big for a de-risked compound later than pay much less now for one that still has binary risk. So (again without being familiar with the specifics here) I would tend not to read too much into the lack of a partner.
Peter
>>Synergy
Caveat here is that this is not a company I follow, and so my observations are inherently superficial.
Given the large size of the two trials (well over 1,000 patients in each trial) and clear positive results in the first one, I would say there should be a very good chance that the second trial would give similar positive results. I'm assuming the respective patient populations are similar (same countries etc.) - that's not a detail I know anything about.
In theory of course the p value by itself should tell you everything you need to know about the chances for a successful repeat, but I take a more jaundiced view - there are often hidden assumptions in trials that make me worry more about the repeatability of a small trial than about the repeatability of a big one.
Peter
Yes, if the FGEN drug flames out for any reason, these hepcidin-lowering drugs would be very interesting. But given they would pretty much always be given in the context of anemia, hard for me to see them getting traction if the HIF-drugs work out.
Fibrogen does have a set of other compounds they don't talk about much. I recall one was designed to upregulate VEGF as well, and there was talk of using it in the context of a MI.
BTW, came across this preclinical publication using a knockout mouse model:
New Trillium presentation confirms Phase 1 starts Q4. Surprise for me was the indication, which is lymphoma - I had kind of assumed AML, where the bulk of the preclinical data they have presented is. I think this is the first disclosure of their initial indication, unless I missed something from a previous presentation.
They do say there will be new preclinical data presented Q4, so I can maybe speculate they saw something exciting in lymphoma. One of their slides does show a massive macrophage assault on the LY1 line, which I believe is a DLCBL model. The phagocytosis index is higher in that LY1 model than in their other presented data, although I'm not sure how well one can compare across models.
Peter
>>you are rushing to judgement without looking at details
I'm not making a judgement on ZIOP at all - I have no position.
I am making a negative judgement on your claim that the stock will go up because "the shorts have to cover."
>>ZIOP 30 million shorts got to cover sooner or later.
That's a losing argument. Historically, stocks with very high short positions in my experience have (on average) done badly.
Peter
>>anti-IL-31
Very few cases of atopic dermatitis (which mostly occurs in children) warrant an ongoing systemic drug, let alone an expensive biologic.
Peter
>>Patients With Mild-to-Moderate Atopic Dermatitis
I'm going to predict that a topical JAK inhibitor will be the ultimate winner in this space.
Oral JAK apparently works magically in dogs with bad dermatitis:
http://news.zoetis.com/press-release/companion-animals/fda-approves-apoquel-oclacitinib-tablet-control-itch-and-inflammatio
Peter