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space shuttle is coming together
http://i.usatoday.net/tech/graphics/iss_timeline/flash.htm
Atrial Fibrillation Compounds (ARYX vs. CRME)
I guess I shouldn't say better. It is apples to oranges because of the different endpoints. What you can tell, especially from the IV data, is that Vernalakant is not as efficacious as Amniodarone. The entire idea of ARYX is to keep the same efficacy as the parent drug which is Amiodarone but get rid of the toxicity. We won't see if ARYX's drug is as efficacious as Amiodarone until a larger trial is done.
If you look at the fact that since it looks like the IV is dead for a while the market cap of CRME was about 200 million with most of that value based on the oral vernalakant. ARYX's market cap was much lower and their drug has as good a shot to get a deal done. What I did like about the ARYX data is that the patients wore a holter monitor during the trial so the afib was detected by the monitor even if the patient didn't realize they had a recurrence. I don't think the Cardiome patients wore a monitor for their trial.
celgene
I knew Brian Gill when he was a I/R staffer for the Investor Relations Board. They are good at putting together lunches for 30 brokers that aren't interested in hearing about the company but are very interested in what is being served for lunch.
This job for Celgene was a huge step up for him.
THLD breakout on volume
what goes up eleven cents one day can go down eleven cents the next day
aryx
As you can see from the article below Xarelto will not be used for chronic use because the drug can't be monitored.
The drug ARYX is developing is to be used in long term use which is 80 percent of the market.
UPDATE 2-US panel backs anti-clot drug despite concerns
Thu Mar 19, 2009 7:13pm EDT
* FDA advisers: J&J, Bayer drug benefit outweighs risk
* Advisory panel votes 15-2 in favor of Xarelto
* Panelists caution against long-term use
* FDA approval decision due May 28
* Some analysts see possible delay in FDA final decision (Recasts first paragraph; adds comment, background)
By Susan Heavey
WASHINGTON, March 19 (Reuters) - Johnson & Johnson (JNJ.N: Quote, Profile, Research, Stock Buzz) and Bayer AG's (BAYG.DE: Quote, Profile, Research, Stock Buzz) anticoagulant drug Xarelto was backed by a U.S. advisory panel on Thursday despite concerns over possible side effects and worries about long-term use.
J&J is seeking marketing approval for the once-a-day pill, developed by Bayer, to prevent dangerous blood clots for up to 14 days in patients following knee replacement surgery and up to 35 days for hip replacements.
The U.S. Food and Drug Administration panel of outside advisers voted 15 to 2 in favor of Xarelto, but cited lingering concerns about possible liver damage and bleeding.
Panel chairman Michael Lincoff, of the Cleveland Clinic Foundation, said Xarelto is "still favorable" but that "there's a bit of caution." The drug is already used in Europe and Canada.
The FDA will weigh the panel's recommendation before making its final decision on the drug, also known by its generic name rivaroxaban. A decision is expected May 28. The agency usually, but not always, follows the advice of its panels.
If approved, Xarelto would be the first oral blood thinner approved in the United States since the widely-used drug warfarin was approved more than 50 years ago. It would also compete with Sanofi-Aventis SA's (SASY.PA: Quote, Profile, Research, Stock Buzz) (SNY.N: Quote, Profile, Research, Stock Buzz) injectable drug Lovenox, also known as enoxaparin.
While the market for knee and hip replacement patients is not huge, the company along with Bayer is studying possible other uses, such as stroke prevention, that would require patients to take the drug for longer periods of time.
LONG-TERM WORRIES
Some panelists were concerned doctors might go ahead and use Xarelto for longer than directed, or off-label uses, even though the drug's long-term effects are unclear.
"We should not rush into this. We should wait until we get more data," said Sidney Wolfe, the acting consumer representative on the panel and head of advocacy group Public Citizen's Health Research Group. He voted against the drug.
Some 800,000 patients in the United States undergo knee and hip replacements each year, the FDA and company said. Stroke strikes nearly as many Americans each year and the potential population for a stroke-prevention therapy could be much larger.
FDA staff scientists earlier raised a number of questions about the company's data, including the bleeding and liver risks as well as how J&J combined data from various studies.
"Any type of analysis with this kind of limitation can yield spurious results," FDA reviewer Qing Xu told the panel.
Panelist Sanjay Kaul, a Cedars-Sinai Health Institute cardiologist who voted against the drug, agreed the company's analysis was unconvincing. "I saw a risk-benefit (profile) that was a wash," he said.
J&J officials told the panel its studies showed Xarelto was more effective than enoxaparin, a benefit that far outweighed potential risks. It also said the drug was more convenient for patients because it was available as a single-dose daily pill and had fewer interactions with food and other medicines.
Warfarin, sold under the brandname Coumadin by Bristol-Myers Squibb Co (BMY.N: Quote, Profile, Research, Stock Buzz), is also take orally but can be difficult for doctors to find the right dose for patients and requires frequent blood tests.
Peter DiBattiste, head of cardiovascular treatments at J&J, told the panel Xarelto was "well-tolerated with modest increases in bleeding."
Other company representatives also said Xarelto was unlikely to have caused liver-related deaths seen in some of the studies. Long-term studies are underway, the company said.
John Senior, associate director for science in the FDA's Office of Surveillance and Epidemiology, said early data from one trial, called Atlas, "looks good... but I want to see more" before concerns about liver problems are eased.
Some analysts said they expect the FDA to delay approval despite the panel's recommendation.
The agency may ask for the final results of the Atlas study to be submitted before it makes a final decision on the application, Credit Suisse analysts wrote in a research note. If that was the case, the drug would not be approved until early 2010, they said.
But more importantly, the analysts said, the FDA panel's support "was reassuring so the product's potential in the longer-term indications... remains robust." (Editing by Bernard Orr and Tim Dobbyn)
Late-breaker status means clinical trial restults are important enough to warrant being highlighted in a larger, marquis venue at a scientific conference
late breaker doesn't mean it works.
medicure had a late breaker for mc-1
aryx
we shall see said the blind man
ARYX
I think the ARYX platform is very interesting. So far they seem to have proven their point that drugs with serious toxicity problem can be made safer with the same efficacy.
I do not thing their improved warfarin is a waste of time.
Physicians are not comfortable in a sizable segment of their patients (approximately 40%) in not being able to monitor the level of anticoagulation. These other agents cannot be monitored and they will have the same level of bleeds and thrombotic events as warfarin (not inferior). A large segment of patients will not be allowed to be on these non-monitorable therapies.
Physicians won’t know where the events are likely to occur until they do monitor.
Erbitux which I cited earlier as getting an RTF worked out very well for those who stuck around
if acorda needs to do another study the stock will get killed
Erbitux didn't get the rtf because of formatting problems
so I didn't change anything
I have always had a problem with using bird poison to increase walk speed in thousands of people and the drug also causes siezures.
it doesn't slow the progression of MS.
I don't believe any drug which has had a nda with a formatting issue has ever been approved.
I didn't make it a statement of fact. I said I couldn't find a case where a drug with a formatting issue was approved
you said that is just not true, which is pretty difinitive, so you must have found a case.
please tell me where a drug with a refuse to file letter because of formatting was eventually approved without more clinical data.
It’s notable is that in some of these cases, e.g. Indiplon from NBIX, the “formatting” problem was a harbinger of much bigger trouble down the line.
I agree, I don't believe any drug which has had a nda with a formatting issue has ever been approved.
Choked on Debt
This is David Broder, pretty liberal but can see both sides. David Brooks a conservative, he was afraid of Palin. I sent him an email which he didn't return, asking if he was happy with the Big O's budget.
This deficit will make things a lot worse than this recession.
Can you spell banana republic? The only thing that will save us is that other economies are in the crapper also. If they recover and we have this debt, we are in a lot of trouble.
Picture Germany before Hitler. Wagonfulls of deutch marks to pay for a loaf of bread because of the debt they accumulated to pay the reparations after world war one.
Is history repeating itself? We can avoid the catastrophe but Obama doesn't mind it. You see, when you need a wheel barrel of dollars to pay for a loaf of bread, it doesn't matter if you have four million dollars or 4000 dollars. It would only be the difference of being able to afford 5 loaves of bread or a hundred.
That is the definition of income distribution. People thought he would want to bring the lower classes up, but it will be easier to bring the wealthy down and make everyone dependent on the federal government to survive.
As Ollie used to say to Stanley, "Another fine mess you have gotten me into".
Momenta Pharmaceuticals, Inc. (MNTA) – [Outperform] – $446.2M Mkt. Cap – (Joseph Schwartz)
Positive Section 505(q) Read-Through: M-356 Safe for Continued FDA Review
View Document
• Bottom Line: The FDA rejected Teva's Citizen's Petition (CP) against MNTA's M-356 application. According to the new section 505(q), the FDA is required to respond to a CP within 180 days of submission and will deny an ANDA only if the agency believes the generic could harm the public safety. Therefore we view it as an incremental positive for MNTA that the FDA believes M-356 safe enough for continued review. Reiterate Outperform rating and $16 fair value in 12 months.
• Teva likely submitted the CP seeking to stall M-356 in its regulatory pathway leveraging section 505(q). Under the new guidelines governing "q" petitions, TEVA was probably hoping for its petition to have been "affirmed" and for MNTA's ANDA to have been "unaccepted."
• Now that the FDA has rejected Teva's CP, we anticipate it will file another CP as M-356 gets closer to its approval date. MNTA filed an ANDA with paragraph IV in Dec. 2007; the application was accepted for review by the FDA in Jul. 2008. Teva quickly filed a lawsuit against MNTA to protect its breadwinner Copaxone from generic competition.
• The purpose of section 505(q) is to identify generics unsafe for the public early in regulatory review. The 505(q) allows the company producing the branded product to protect its franchise while the FDA can save valuable time that would be spent reviewing an ultimately non-approvable generic application. The FDA's time constraints have caused a progressive backlog of CP since 2003 (see table on pg 3), for which the 180-day turnaround time is designed to address.
• MEDACorp consultants identified potential loopholes around the 7 Copaxone patents that may support the M-356 Paragraph IV ANDA. The first 5 patents are process patents and could simply be avoided by using a non-infringement claim if MNTA can synthesize copolymer-1, or the active ingredient in Copaxone, through a unique mechanism.
• The 2 composition-of-matter patents, '539 and '098, could be tackled either through a non-infringement or inequitable conduct claim. MNTA could base its paragraph IV on non-infringement since the Copaxone label includes copolymer-1 mixtures with average weights of 4-11 KDa, whereas the composition of matter patents only cover 4-9 KDa. Inequitable conduct also seems to apply since copolymer-1 had been thought useful in MS for decades prior to TEVA.
Aradigm great technology, extremely cheap
Aradigm reports 4Q 2008 results with a lower loss than expected. The Company reported a net loss of ($5.3) million, or ($0.10) per share which was $2.2 million lower than our estimate for a net loss of ($7.5) million, or ($0.14) per share. Aradigm reported $19.4 million in cash as of December 31, 2008, and with the recent completion of a financing in February with net proceeds of roughly $4.0 million, we estimate a February 2009 pro-forma cash of approximately $22 million ($0.23 per share). With a current monthly burn rate of approximately $1.5 million, we project it is enough cash to achieve significant developmental catalysts including a potential partnership for the ARD-3100 (inhaled liposomal ciprofloxacin-ILC), potential bronchiectasis or CF Phase IIb data
by 2010 and more progress with the AERx treprostinil program.
• In February, Aradigm reported top-line Phase II trial results indicate treatment of
bronchiectasis patients with its ILC was safe and well tolerated and resulted in a
statistically significant reduction in the level of bacterial infection in the lungs of these patients following 28-days of treatment. The positive top-line Phase II data reported from a 28- day open label study designed to examine the safety and efficacy of two dose strengths of ILC in 36 bronchiectasis patients indicate the treatment is safe and well-tolerated and it results in a highly statistically significant reduction in the bacterial load in these patients. Overall, we are impressed with the results reported as they confirmed the positive results with respect to safety and bacterial load reductions observed in the CF trial reported last year.
We recommend investors to take advantage of the current price weakness to purchase ARDM. At a market cap of $11 million and $22 million in cash as of February 2009, we do not believe the value for Aradigm’s pipeline including ILC or the inhaled Remodulin partnership is at all reflected in the current valuation. We strongly reiterate our BUY rating. The reduction of our price target to $3.30 from $6.00 is largely a function of the significant increase in the number of shares outstanding to 95 million from 54 million as a result of the recent 40 million share financing which was priced at $0.10 per share. Our price target is based on a 25x multiple of our 2012 fully-diluted EPS of $0.28 discounted back at 35% (see Table 2 below for details).
Insmed knows iplex doesn't work in als
geoff alan belongs in jail for selling it in als for over 200 grand.
It may work in mmd
it definitly works in rop. why doesn't he do trials in rop?
he would rather sell it where it doesn't work than get it approved for infants going blind.
he is an animal
I believe ARYX afib data looks better than crme's
ARYx Therapeutics, Inc. Provides Additional Data on Atrial Fibrillation Clinical Trial on ATI-2042
Monday January 12, 7:00 am ET
Washout Data and Secondary End Points Reinforce Top-Line Efficacy
FREMONT, Calif.--(BUSINESS WIRE)--ARYx Therapeutics, Inc. (NASDAQ:ARYX - News), a biopharmaceutical company, today announced further results from a Phase 2b clinical trial testing the safety and efficacy of its oral anti-arrhythmic therapy, ATI-2042, in patients with atrial fibrillation. This follows the December 18, 2008 press release reporting that ATI-2042 reached statistical significance at its primary end point in the two highest of three doses tested. Those results are now reinforced by these additional findings indicating, in part, that patients in the study quickly returned to their pre-treatment level of atrial fibrillation once the treatment ended. The complete safety results from this study are still not finalized and are expected by the end of March 2009.
“These additional results broaden our confidence about the effectiveness of ATI-2042. We believe these incremental data provide additional clinical evidence that ATI-2042 does not accumulate in the body which is known to be a major liability with the treatment of choice, amiodarone,” stated Dr. Paul Goddard, chairman and chief executive officer of ARYx Therapeutics. “Our product has been designed to be as effective as amiodarone in a broad atrial fibrillation patient population, including those with congestive heart failure, but without its known safety problems. These additional Phase 2b results should support our efforts to find the right partner for the full development and eventual commercialization of ATI-2042.”
Our Study Design and Analyses
The clinical trial, which enrolled 72 patients, was a multi-centered, randomized, double blind, placebo-controlled study of the efficacy and safety of ATI-2042 in patients with paroxysmal atrial fibrillation (PAF). Patients entering this study all had previously implanted permanent pacemakers with appropriate diagnostic and recording capabilities. These devices were used to collect comprehensive cardiac data, including the percentage of time each patient spent in atrial fibrillation (their “burden”), as well as other aspects of cardiac function that will be incorporated in the complete results analysis. Patients were entered into a baseline screening period of up to 30 days during which their burden was measured to establish if they were eligible for the trial. Qualifying subjects were randomized to receive twice-a-day (BID) oral doses of 200 mg, 400 mg, or 600 mg ATI-2042, or placebo for a treatment period of 12 weeks. This treatment period was followed by a further 4-week observation period; the “washout period.” During this washout period, no new antiarrythmic drugs were permitted. Each patient’s burden during the 12-week treatment period was measured and compared to their own baseline measurement. These results were then compared to the response in the placebo group.
As previously announced, the primary statistical efficacy analysis showed significance for ATI-2042 at the 400 mg (p=0.015) and 600 mg (p=0.005) doses. The atrial fibrillation burden in these two treatment groups was reduced from baseline by 54% and 75%, respectively. Subsequent to the release of these top-line results, additional data have been generated.
Our Washout Period Results
Data related to the level of atrial fibrillation burden that existed in the treated patients during the 4-week washout period is now available. At the end of the washout period, pacemakers were interrogated and the atrial fibrillation burden data were analyzed in the same way as the active treatment data. In each of the three ATI-2042 dose groups, the atrial fibrillation burden returned to essentially their baseline values within the one-month washout period. The washout data show no evidence of accumulation or of a rebound effect in the atrial fibrillation burden.
Additional Indication of Lack of Drug Accumulation
In this study, we utilized slit-lamp examinations to measure whether crystal deposits, so-called microdeposits, were formed in the patients’ eyes as a result of treatment with ATI-2042. These microdeposits are thought to be an indication of whether drug accumulation occurs. For example, published studies have shown these corneal microdeposits appear in approximately 90% of patients treated with amiodarone for 3 months (HL Green, et al. JACC 1983;2:1114). While the safety data is still blinded, a review of the over-all results of the slit-lamp eye examinations conducted on patients in this Phase 2b study reveal that, after up to three months of treatment, 56 of 57 patients were free of corneal microdeposits. Along with the washout period data, these slit-lamp examination results provide evidence of the lack of tissue accumulation of ATI-2042 and its metabolites.
Our Secondary Endpoint Results
In addition to providing measurement of atrial fibrillation burden, the pacemakers used in this Phase 2b trial also provided study data on the secondary efficacy endpoints such as the duration of atrial fibrillation episodes and the total number of atrial fibrillation episodes. A significant benefit in terms of reductions in both the number and duration of atrial fibrillation episodes was demonstrated in the 600 mg BID dose group. Commensurate with the reduced duration of atrial fibrillation there was a significant increase in the duration of normal sinus rhythm. The goal of anti-arrhythmic therapies is to maintain patients in normal sinus rhythm. These improvements in the secondary endpoints were supportive of the primary endpoint, and provide a plausible biological explanation for the established dose-dependent reduction in atrial fibrillation burden seen in this trial’s top-line results. We believe these full efficacy results help explain how ATI-2042 will be of clinical benefit to patients with atrial fibrillation.
Bill Haseltine should head the stimulus program.. He would be very effective at spending money and getting nothing accomplished
They have two years of cash if they do not spend any cash on trials
the anda has just been filed so they will not get approval until 2010 at the earliest
Is the reason you think the aryx warfarin will be a dud because you believe mnta has a better one?
DORB - <a modified generic steroid that can already be compounded by a hospital pharmacy>>
If you had watched the orBec panel meeting you would have seen that the compounded product doesn't time release the steroid in the proper manner so it doesn't work as well. It also tastes terrible so it is hard for people to injest whereas orBec is made up of easy to take tablets.
Once it would get approved the first treatment failure of someone that was given the compounded concoction would probably have a good lawsuit against the hospital for not using an FDA approved product. The hospital then would also have to readmit the patient and they would have to eat that retreatment because they only get paid for the transplant once. That would cost a hell of a lot more than twenty grand.
How come Osiris has the market cap it has, if the GVHD market is so small?
The other nice thing is that if orbec can treat the inflamation involved in GVHD it should work in radiation enteritis and Crohn's. A main treatment for Crohns is time released budesonide. Beclomethasone is 100 times more potent than budesonide so it should work much better.
Crohns is a blockbuster market. I like the expression keep it simple stupid. Wouldn't it be nice if something simple like time released beclomethesone worked.
I believe that Dor Biopharma has a much better chance of exhibiting good data based on the data below, than Osiris does. Below is a Jefferies report on Osiris' in their trial
https://jefferies.bluematrix.com/docs/pdf/72344.pdf
Osiris Therapeutics, Inc. [OSIR]
While its strong cash and GENZ partnership for the stem cell franchise
are positive for OSIR shares, we continue to view its first
controlled/randomized/double-blind study for Prochymal (Ph.III data
for steroid-refractory GvHD in 3Q09) as highly risky. Ahead of this
binary event, we view risk/reward as skewed towards downside.Ph3 steroid refractory GvHD data
for Prochymal in 3Q09 is next catalyst.
Dor BioPharma has reached an agreement with Sigma Tau that gives Dorb the cash to fund the phase 3 clinical trial for the treatment of Intestinal GVHD after stem cell transplant, that can lead to an approval of orBec in the United States and Europe. Dor will receive a 35 percent royalty on net sales in the United States. DorBiopharma retains the rights to orBec in the rest of the world. In orphan diseases Europe actually allows pricing equivalent to the United States, so the European Market size is probably the same or larger than the US market.
In November the company had less than a million dollars in the bank and a drug ready for phase 3 but without the resources or an agreement with the FDA on how to proceed.
Now the company has received an SPA from the FDA to reach an endpoint of Intestinal GVHD treatment failures at eighty days post randomization vs the standard of care (high dose predisone) which is not even approved. The P value needed in this one phase 3 trial is .05. In the prior phase 3 study the company reached this endpoint with a P value of 0.005. with a smaller number of patients. In my mind this means the clinical risk is very low. The company now has the resources to get the drug approved.
The primary endpoint is the treatment failure rate at Study Day 80. This endpoint was successfully measured as a secondary endpoint (p-value = 0.005) in the previous Phase 3 study as a key measure of durability following a 50-day course of treatment with orBec® (i.e., 30 days following cessation of treatment).
Other data from the prior phase 3 trial.
orBec® did achieve statistical significance in other key secondary endpoints such as the proportion of patients free of GVHD at Day 50 (p-value 0.05) and Day 80 (p-value 0.005)
The median time to treatment failure through Day 80 (p-value 0.0226),
A 66% reduction in mortality among patients randomized to orBec® at 200 days post-transplant with only 5 patient (8%) deaths in the orBec® group compared to 16 patient (24%) deaths in the placebo group (p-value 0.0139).
At one year post randomization in the pivotal Phase 3 trial, 18 patients (29%) in the orBec® group and 28 patients (42%) in the placebo group died within one year of randomization (46% reduction in mortality, hazard ratio 0.54, 95% CI: 0.30, 0.99, p=0.04, stratified log-rank test).
DOR is currently in a clinical trial studying orBec for the prevention of GVHD in stem cell transplants by giving orBec prior to transplant. The prevention market would be two to three times the size of the treatment market. This trial is fully funded by a grant from the NIH.
The company has the go ahead from the FDA start a trial with a slightly different formulation of oral beclomethasone in the treatment of radiation enteritis. Radiation enteritis is a condition in which the lining of the bowel becomes swollen and inflamed during or after radiation therapy to the abdomen, pelvis or rectum. Most tumors in the abdomen and pelvis need large doses, and almost all patients receiving radiation to the abdomen, pelvis or rectum will show signs of acute enteritis. There are over 100,000 patients in the United States annually who receive abdominal or pelvic external beam radiation treatment for cancer who are at risk of developing acute and chronic radiation enteritis. This trial has an excellent chance of getting government funding because of the unmet medical need and fast track status it has received from the FDA.
The company is also the world leader in the Ricin Bioterror threat, and grants and additional funding is anticipated shortly
insmed. now that they sold the plant to Merck who is going to make Iplex for them
They used to say they were the only ones to make it. The expertise and facility is sold
“This will increase the cost of the drugs and delay their approval.”
no it won't. It will stop future drug development in diabetes for a long time.
Dew...Pfizer should be convicted of the crime of bad management.....Geee
do you think the upgrade by Goldman has anything to do with investment
banking financing of the wyeth deal??......Oh my..is Goldman helping them
with the financing...wow thats a surprise....
Actually that is a surprise. CVTX hired Barclays to advise them on the Astellas proposal and Barclays suspended coverage of the stock.
If Goldman is involved in the merger than they should have suspended coverage of Pfizer.
Dr Bio, you're on a negative rampage these days.
I see a depression coming so i am starting early
Hands, who thinks LAR gets approved within the next year? I cannot see byetta getting a black label, and there should not be any problem with the monotherapy label for byetta, but dang, with the current FDA that is some real risky money betting on approvals like this that had to be considered near no-brainers for eventual approval.
Knowing that the fda has an extremely cautious stance on approvals of diabetes drugs and byetta has issues of its own, why did lilly and amlyn only use a couple of hundred people in the LAR study.
That was retarded.
FDA delays Lumizyme (Myozyme 2000L process) approval, citing CMC issues
They said on the conference call that they recieved the complete response letter on Friday. I know they have 3 business days to make announcements about material news but this news should have been released Friday after hours, but certainly before market open this morning.
Micheal Becker was an analyst at an unknown small research company. He was hired as the ceo of cytogen. His bio says he attended college somewhere but never said that he even graduated from college.
He ran Cytogen into the ground and then went to Vioquest until they ran out of money, and now he is writing at seeking alpa. His opinions are worth less than anyone's on this board.
For Buffett, It Was a Very Bad Year Article
Comments (72)
more in Earnings »By SCOTT PATTERSON
It would be interesting to find out if General Re used Moody's to rate their derivatives as triple A so they could off load them to unwitting buyers in Iceland.
The man considered by many to be the greatest investor of all time just had his worst year ever.
But the results released Saturday for Warren Buffett's company, Berkshire Hathaway Inc., also demonstrate how recently, and over time, the investor has positioned his far-flung empire to weather the financial storm.
Associated Press
Warren Buffett
Mr. Buffett, in his annual letter, read closely by shareholders and nonshareholders alike, reported Berkshire in 2008 lost 9.6% in book value per share, a common metric Berkshire uses to track performance. That marks the biggest decline since Mr. Buffett took over in 1965, when it was a family-run East Coast textile maker.
Mr. Buffett conceded he "did some dumb things." Among them: scooping up shares of oil giant ConocoPhillips when oil prices were near a high and investing $244 million in a pair of Irish banks that hit trouble, resulting in an 89% loss.
Berkshire shares fell nearly as much as the rest of the market last year, indicating that investors are worried about the company's ability to keep growing. In 2008, Berkshire's Class A stock fell 32%. This year, the shares are down nearly 19%, slightly better than the Dow Jones Industrial Average.
Yet many analysts were pleased that the decline in book value per share wasn't steeper. And Mr. Buffett's results also show he has made moves that have paid off and should continue to do so even if economic woes persist, as he predicts.
He limited his exposure to complex and potentially costly derivatives in his reinsurance unit, General Re Corp. He has $24.3 billion in cash that can be used to find bargains in a distressed market. And he's made several investments in preferred stock of firms such as Goldman Sachs Group Inc. that pay out steady income of 10% or more.
Annual Letter
Econ: Warren Buffett on the EconomyLetter Highlights: 'Did Some Dumb Things'Berkshire's annual letter to shareholders.More
Buffett Takes the Long View; Will Investors?
2/27/09Buffett to Invest in Swiss Re
2/06/09Buffett Helps Harley Refuel
2/04/09Berkshire Net Income Falls 77%
11/08/08"He's done a great job to prepare for this," said Paul Howard, an analyst at Langen McAlenney, a Hartford, Conn., research group, who rates Berkshire a "buy." "He's got good businesses that are generating a lot of cash, and he's going to continue to put that money to work."
Berkshire's substantial insurance holdings haven't needed to take the massive write-downs on toxic subprime securities that have plagued much of the financial industry in the past two years. One reason is Mr. Buffett's longstanding dislike of complex derivatives, which he famously called "financial weapons of mass destruction" in his 2002 shareholder letter and which he railed on again in his latest letter. He pushed General Re, the large reinsurance company Berkshire acquired in 1998, to disentangle itself from a vast web of derivatives -- financial instruments tied to the value of other securities, such as stocks or bonds -- over the course of five years, winding down its book of 23,218 derivatives contracts at a loss of about $400 million, he said in the letter. The losses may have been far more substantial if General Re had held onto to the contracts, Mr. Howard said.
"Upon leaving, our feelings about the business mirrored a line in a country song: 'I liked you better before I got to know you so well,'" Mr. Buffett wrote, referring to General Re's derivatives book.
Separately, Berkshire took a loss of $5.1 billion in the fourth quarter on several derivatives contracts entered into in recent years. The contracts, essentially insurance policies against long-term declines in U.S. and foreign stocks, expire in 15 or 20 years. Berkshire will have to pay out if the indexes are below where they stood when the deals were struck. The derivatives, whose current estimated value has to be reflected on Berkshire's books, are one reason the company reported a grim fourth quarter on Saturday -- its fifth year-over-year quarterly decline.
The $117 million quarterly gain it eked out in the quarter marked a 96% drop from last year's $2.95 billion in fourth-quarter net income.
Beyond commenting on Berkshire, Mr. Buffett shared his views on the broader economy and financial systems. He doesn't expect the economy to improve soon but did expect better times, eventually.
"Our country has faced far worse travails in the past," he said. "Without fail, however, we've overcome them." He declined to draw a correlation between stocks and economics, saying that while he was certain the economy would be "in shambles for 2009," that "does not tell us whether the stock market will rise or fall." He credited the government for stepping in with massive assistance last year, saying the intervention was "essential" to avoiding a total breakdown. But he cautioned there could be "unwelcome aftereffects," such as inflation.
He contended the "investment world has gone from underpricing risk to overpricing it," which he said is reflected by investor appetite for Treasury bonds. Future historians will comment on the Internet bubble of the 1990s and the housing bubble of the early 2000s, he said, but "the U.S. Treasury-bond bubble of late 2008 may be regarded as almost equally extraordinary."
Write to Scott Patterson at scott.patterson@wsj.com
Warren Buffet
Considering that everything he says is absorbed by the entire market because he has in depth knowlege of all of his investments and what is going on in the world.
I would like someone to tell me how he could own 20 percent of Moody's and not know that they were putting lipsick on a pig by rating sub prime cdo's with a triple A rating.
That is probably the largest reason we are in the mess we are in, and yet his hands remain clean.
If he didn't know what was going on he should have.
pfe
you feel Pfizer is cheap, but if you want to own Pfizer wouldn't you buy Wyeth?
PG has hired Goldman Sachs to sell its pharma business, according to the Financial Times. PG reportedly wants to get out of pharma so it can invest the sale proceeds in such “higher growth” businesses as detergents and deodorants!?!
we finally have the "real reason" P and G backed out of the deal with Nastech
The drug works better then anything shown to date. One trial is well below p < .01 which in some indications is enough for approval as a single trial. My theory is it will help some to some degree
I would have felt better if the second trial at least exhibited a trend, as opposed to a p value of .51
Feuerstein’s technical gaffes (SGP VRTX GPCB ITMN etc
He was a political science major which in and of itself shouldn't stop him from writing about biotechnology. I have always felt his idea generation was pretty much based on whether his hedge fund associates were long or short a particular idea, and his intention to help a particular friend make money
"Unfortunately due to the regulatory process, another 40,000 patients will die this year from PF while this application is submitted and reviewed by the FDA. We call on the FDA and the manufacturer to make every possible effort to expedite this process, so that more lives may possibly be saved,"
What is unfortunate is even if the drug is approved tomorrow 40,000 patients will die this year because the drug wasn't shown to be very effective.
breast implants had sagging sales
I didn't see the other posts about sagging sales
sorry
“The president believes that nobody is perfect, but that nobody is trying to hide anything,” Robert Gibbs, the president’s press secretary, said in an interview, adding, “I think Senator Daschle rightly is going to have to answer questions, but I think members will be satisfied with the answers that he gives and will understand that he’s the right man for the job.”
Keep this in mind in case you lose an IRS audit. It is nice to know that a defense of nobody is perfect will be acceptable to get you out of hot water.
Or does that only work for democrats. I will register as a democrat very shortly. Maybe one party rule has its advantages.
The king is dead, long live the king.
personally, I think we are going to end up engineering "new" cancers along the way to getting stem cell therapies, but the wall street ride on stem cells might be just what the doctor ordered to fuel a biotech bubble.
it may have the reverse effect. I don't believe stem cells will be very useful and if they are it won't be for 20 years. Investment into that area because of the hype, will suck needed capital from better, further advanced products into a black hole. Not good for investors or people in need of new medications. My feeling is the Government will use some of the stimulus package for biotech but most of that money will go to stem cell reseach because the democrats love that space, but again you won't see the results for 20 years.
This is not a stimulus package.
I didn’t think SeekingAlpha could get any dumber, but it just did.
That guy should win the Nobel prize for economics. What he basically said was that he bought a stock and it went down. He will now learn from his mistake and wait before he gets fooled again.
it was very thoughful
On the other hand, the addition of the word substantially in the quoted excerpt above tightens up the definition to some degree
of course it depends on who is determining what the word substantially means.