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BTH - Do you have one factual complaint about Rida's effectiveness in the SUCCEED trial?
Or, are you just going to keep making stuff up to complain about?
BTH - Gee, is it just possible that responsible clinicians are waiting for the results of the SUCCEED trial instead to creating specious arguements the way you do?
ARIA - PPS has moved up since Ariad's 10:15 webcast at the 21st Oppenheimer Conference today.
You sound way too nervous to hold this stock. The beta has increased recently. Just remember it swings both ways.
Kenyon - After all you excellent posts over the years, I'm kind of surprised to find you yammering a bit over this recent secondary. BTH's complaining about eveything that crosses his mind is a different matter with a different agenda that is not worth addressing.
As I have asked before on the msg board, what would have happened if HB had not issued the secondaries over the years that he did? Would your stock have been worth more. The general surprise and complaining about secondaries in Ariad as well as other development stage biotechs defies reason. It's as if no knows or wants to accept how the ball is moved forward. I also expected some kind of 534 partnership after what HB said. However, I realize that HB wasn't able to get the terms he wanted so he did the next best thing and saved any partnerships for a time when the value of 534 is more evident.
The other point about this and other Ariad secondaries is that they essentially buy time and time is translated into increased value of the underlying stock because the drug pipeline is significantly moved forward with each secondary. Nothing is lost with the secondary if the funds are well directed. Indeed, it can be argued that value is actually added with Ariad Everything would have been lost without the secondaries - it's just that simple. Partnerships that are badly timed can loose value to shareholders needlessly.
I am sure that you know that this is all part of the ABC's of biotech investing even though BTH wants to make a Greek tragedy out of it. There have been better financial climates for biotech secondaries than this one or 2008, but realities have to be accepted and dealt with as they come up (I know that you don't need that lecture either).
You can feel free to hammer HB for the way he has handled Rida - but I don't agree. The scenery and options that he has faced have changed significantly over the years - and, he has been working within a difficult financial climate. If HB has a clear failing, it is his public statements. HB often voices options that require a more optimistic scenario to unfold than actually materializes; and then, he has to act in seeming contradiction without making expansive explanations to the investing public that might put his actions in context. In that way, HB is probably more defensive than is helpful to his cause.
Teton - Right you are.
Anyone wanting to review the actual content of the Lockup Agreement can read the fine print in today's SEC filing of Ariad Prospectus Supplement numbered 424B5.
Hi lax20m - I agree with you. There is an additional point that is often missed when a secondary like this is issued. The additional money raised often turns out to add more value to the stock because of how the new funds are employed in the near term than the dilutive effect of the additional stock on the shareholder percentage of ownership.
Smeagol already pretty much made this point with respect to Ariad's preceding secondary in his post#2874.
BTH - You have made so many distorting and erroneous statements today about HB and Ariad that its hard to find a place to start that's really worthwhile addressing. So, I'll just settle for this one.
"And, '534 will not be 'newsworthy' until 2012?"
Well, when the the T315I arm of the trial ends in 2011, it will both important and very newsworthy.
NOLO - Nicely put. Sounds like your views could add some interesting substance.
NOLO - I agree on the $1BN+ but what does the plus amount to?
BTR - I think you are wrong about HB and the oncology company. It would be hard to believe that HB hasn't realized the limitations of Ariad's potential. It looked to me when he sold Rida that he knew that Ariad's place was firmly in the lab.
However, the price for admission that HB is asking from suitors to participate in the future of 534 might be higher than they are willing to pay.
The question is how realistic are his expectations of the future value of 534? How accurate are his projections for the potential earning power of this molecule? I suspect that HB himself may not have a really good grasp on the answers to these questions.
Therefore, we will have to wait and see what new targets emerge. Tolerating the ambiguity is taxing.
BXOF - Another question is - How much money will Ariad actually need to go through the first half of 2012?
Will $102 mil take Ariad through 1 1/2 years of patient registrations and trials for 534? What does the burn rate really look like all things considered?
So, is Ariad counting on the $65 mil that you mentioned coming into the picture during this time period?
BTH - Seems like I suddenly find myself on the same page as you.
What a surprise.
BTH - HB's PR machine has nothing to do with the price of the stock today.
The underwriters will be holding the floor under the stock at the issue price for a few days - an then .... it will begin to float back up.
BTR - Has the value of the franchise increased since those periods of time when additional stock was issued?
What would have happened if HB had not gotten additional funds through stock issuance?
How does the development stage biotech world really work?
wrking -Contrary to what you might think, I can't read HB's mind.
This new plan for issuance of stock does suggest that HB was unable to get the terms he wanted for 534; and, that he thinks that completing at least some of the 534 arms will get Ariad to a better bargaining position.
If there is some element of risk with SUCCEED, and admittedly there is some risk, then he can't afford to put Ariad in a worse bargaining position should the results not be up to expectations. HB, therefore, has to go with the Arid story that is at hand - the endo trial results just validated the proof of concept for Rida and theefore bodes well for SUCCEED and 534 is just around the corner with a powerful new molecule.
The whole value of 534 has yet to be unfolded, for example, there is the unproven possibility of it's use in Alzheimer's and other cancers. It may take them a while to maximize 534's potential uses to extract its full value. I think that HB is buying time to strengthen his bargaining position.
On the other hand, if HB waits too long, he might just get gobbled up.
wrking - You have reached the wrong conclusion about the SUCCEED trial.
There is a difference between a strategist and a gambler. HB is a strategist who is not going gamble his own money or ours on outcomes which may leave him a worse position to bargain because the right terms for 534 can't be reached yet.
There are a number of considerations at play and plenty of ammunition for those who are looking to complain about HB or Ariad or both.
The real question is what is the wisest move to make and when to make it considering the panoply of circumstances that could possibly be encountered as the various trials move forward. HB has apparently reached a conclusion about both.
Teton - Nothing is wrong with the pps picture of Ariad that a little more time and patience won't fix.
The market is not geared to our expectations. This is after all a time when institutions are rearranging their portfolios in addition to contending with redemptions.
I think that BTH may on occaision be afraid the HB will be come diltuional but beyond that I think the next 3 to 10 months of holding Ariad should prove rewarding to the patient.
BTH - It's good to hear that you are complaining about Merck and not Ariad.
Broker? What's a broker?
BTH - Thanks for the list. I understand you point.
However, my question was not sufficiently refined to address what I was actually intending to ask you. So, with your kind indulgence, my rephrased question goes is:
Do you have any evidence that Ridaforolimus is not working on any subset of sarcoma in the SUCCEED trial?
BTH - It just begs the question for you to say "I will not do your homework for you."
Since you assert that Ariad SUCCEED trial has certain inherent weaknesses based on your knowledge of how this mtor acts on subsets of sarcoma, it is up to you to prove your point. If you can't prove your assertions, we all have the right to conclude that they are not true.
I await your proof.
BTH - Do you have any evidence to prove that Ridaforolimus doesn't work on any one particular subset(sic) of soft tissue sarcoma or bone sarcoma?
Any takers on what is happening beyond the technicals?
Today Seeking Alpha has a rather nice summary of the Ariad-Merck-Ridaforolimus connection that is fundamentally positive.
Among other things, it repeats how much Ariad has benefited and stands to benefit from a successful outcome of P3.
BTH - Thanks for your efforts - I appreciate the greatly.
b-r A "This is a start up biotech"??? I know that you know better than that. A more apt description for Ariad would be a 'rapidly maturing development biotech'.
"Earnings will come when Ariad matures"??? The money Ariad received from Merck for the rights to most uses of Ridaforolimus was earnings in the truest sense of the word. Ariad invented and made Ridaforolimus.
Merck entered its first agreement with Ariad based on the market for Ridaforolimus and the potential earnings that represented. Merck calculated the earnings value - I am sure there are a few readers on this board who can show you just how these earnings estimates are computed based on the market share that this drug might have for every year until patent expiration. Merck then went on to buy most of the rights to Ridaforolimus based on their earnings calculations for the drug - for cash, milestone payments and royalties.
The same goes for ponatinib. This drug will sooner or later be partnered for a surprising amount of money that will also be counted as earnings. The fact that the money comes in big chunks and not quarterly increases doesn't diminish its quality as earnings.
The pipeline IS potential earnings - in the stock market that's the bottom line. Some of the earnings potential for Ariad has become clearer in recent weeks and promises to become even more so in the next 9 to 12 months.
BTH - Ariad most certainly is an earnings story.
Ariad has demonstrated its ability to develop an important molecule for which Merck has paid a great deal of money and will continue to pay royalties in the future when the FDA approves it.
The other molecules that Ariad is developing are also sources to of great potential future earnings - in fact, the only way to value Ariad is on it's potential future earnings. Up until now that has been difficult. Soon the earnings power will be more visible.
Hi Jan - Yes, you are right about the potential bullish aspect of put selling. However, Friday's action was little different - as I looked at the trades coming in it looked to me like there was probably one large buyer buyer. Some serious investors and institutional firms buy downside protection with puts. When they do this, they usually wait as long as is safe before buying to reduce the cost of the options price. In this case, they bought just over $1million options covering an equivalent amount of stock. The actual cost of the premium paid was minimal compared to a potential 1 to 2 point drop in the price of the stock if SUCCEED fails or other things go awry during the duration of the option. This premium for the insurance is rather small compared to the 5 - 10 point potential upside if SUCCEED comes in with significant results.
In sum, this type of buy is bullish not because someone is selling puts but rather because some is willing to pay a small premium to stay in the trade until the outcome is known.
iandy - I am counting heavily on Hb's self-interest - it's our best safe guard for great deals to come.
You have underestimated the value 534. Since you have waited this long, why not wait for T315i arm to run its course.
The longer it takes for a buy out - which will eventually come- the higher the price.
b-r Yes, I agree that HB has a great deal more skill in these situations than he is sometimes credited with. I think that he also more options than ever.
Possible partners, IMO, in order of potential PFE, NVS, AMGN & MRK.
The value of the up front money may depend on how it's structured.
A strait up front cash payment will probably result in less up front money than a sale of stock to a potential future takeover candidate. On the other hand, if HB sells $20 million shares between $12 - $20, that will hardly be experienced as dilution by shareholders even with the additional shares added to the float.
Delaying the 534 partnership beyond the SUCCEED trial outcome information would seem to me to be an indirect vote of confidence in Rida. I suspect that if there is even any potential uncertainty about the outcome of the SUCCEED trial, the partnership agreement for 534 will occur first.
Teton - You are right that, generally speaking, inflation is a monetary phenomenon; but, in addition, the velocity of money is a necessary condition though not a sufficient condition for inflation.
Sed - Well, well -
At last, someone who really does know something about how inflation develops. From what I understand, there is no significant increase in the velocity of money when the Fed is buying up the bad IOUs this way. For real inflation to take hold, a significant increase in the velocity of money is required.
With that said, Ariad looks better and better as interest rates drop and significant growth in the value of Ariad is just over the horizon.
FWIW, I'll eat my shorts if HB doesn't get more than $100 million up front for ponatinib. The value of this molecule is just starting to unfold.
2da - I think you have it about as right as it gets.
Your points about HB and way he is or isn't saying too much as well a his perceived behavior are thoughtfully reasoned - particularly since I agree with their potential .
I would not place any significance on this. You can, of course, do so if you wish. I just do not see it as a change of outlook. Sometimes there is no message in the tea leaves - just tea leaves
Rida is the past and now belongs to Merck. It is Merck's horn to toot. Ariad just gets to collect the cash. 534 is the present and a beautiful thing at that.
BTH - Your posts about Ariad are sometimes of value and sometimes just dead wrong. I have addressed both kinds of posts from you.
Disagreeing with you does not come out anger - feelings don't have anything to do with the facts. The facts speak for themselves if we let them.
Perhaps you don't want to address all the implications of what you write about Ariad. I don't own the truth just views about the what I think to be the facts. I try to looking at everything and I encourage others to do the same. The truth does set you free.
Sleep well.
BTH Here is how you are just dead wrong..
You write - "They must have some knowledge about the trial by now, and it's probably, literally, right on the edge of failure or success. "They do not have any more knowledge beyond what the second interim look gave them; and, we all have that. To say that Dr. Berger has any knowledge beyond this second interim look is just untrue unless you have the evidence. Since you can't show me the evidence, I justly conclude that your statement is dead wrong.
By the way, to say that Dr. Berger has information beyond the second interim about how the trial is going and that he is withholding this information is potentially slanderous since it implies a serious breach of his professional and fiduciary responsibilities that most likely has criminal implications.
You write - "The placebo arm is a huge problem for me." As I said to you before. I have addressed this complaint of yours and you never responded. Exactly what continues to be the "huge problem"?
You write - "I do not like the trial design at all." The P3 trial was designed to maximize the possibility of a favorable outcome for Ariad. Exactly what is wrong with that? Nothing. Therefore you are just dead wrong.
You write "The placebo arm is ahuge problem for me. the placebo arm
BTH - Your speculations about the the outcome of the P3 Rida trial are both wrong and misleading. You have nothing to substantiate these speculations. If you did, I am sure you would have said so.
To speculate about leakage gives the illusion of credibility without having to produce any evidence. Show me the evidence.
I have already addressed your absurd speculations about the placebo arm in an earlier response to you. Do I need to repeat it? You were dead silent.
BTH - Credit where it's due - nice.
My guess is that institutions are in the process of taking losses if they bought in the 4's and changing dance partners to see who will best secure their year end bonuses for 2010. It is September after all.
We'll see what happens Monday as result of this article - should be interesting. I would expect positive interest, increased volume, and lots of naysayers. Of course, the shorts will have their share of commentary. I, on the other hand, would have preferred Ariad to be ranked #1 so a I will just have to bear up under the disappointment.
That being said, today's NY Times has a front page article that bears indirectly on Ariad. Amy Harmon tells a moving story about two cousins with a specific type of melanoma that is responsive to Roche's PLX4032 and how the cousins have apparently wound up on different arms of a clinical trial that means one cousin will probably die sooner if he never receives the PLX4032.
Increased sensitivity to this issue may have played a role in the FDA's flexibility in helping to design the new registration trial for ponatinib (AP24534) trial with Ariad, particularly with respect to patients the T315I mutation.
It seems likely that pressure could develop in the near future on the FDA for earlier action on drugs that make a life and death difference.