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What does it mean that over the last 5 days, a ton of shares have been dumped and the SP is steady? Somebody is buying these shares by the truckload. Why?
JD
My 2 cents-worth. Don't invest in COR. Any rational investment strategy has to be based on information, and with respect to COR we don't have good information.
All of us who have lost our shirts made assumptions about the process by which a drug is brought to market: COR does experiments, and submits the data to the FDA for evaluation. The FDA considers the data from a scientific standpoint, and makes a ruling.
What went down suggests that these assumptions were wrong. The most benign interpretation (Neuro's), is that the FDA's decision was determined by politics (i.e. covering their *sses); others here have proposed more paranoid explanations. The one thing everybody agrees on though is that the process didn't work the way it was supposed to, but we don't even understand where the process broke down, and we're not likely to.
As a result, I think that it is impossible to make an informed decision wrt COR. It may go to $12 and above, it may go out of existence, but it's worse than betting on horses.
I hope your house makes it.
I don't think that COR has good prospects for a PIPE when the last warrants leave the warrant holder under water. Any deal they could get would be for a relatively small sum, and the terms would be much worse, and would crater the SP.
This means that COR can take the risky path of getting POC for AD or RD or whatever, with the goal of forming a partnership on more favorable terms, or enter into a less favorable partnership now, relinquishing a considerable portion of their IP at what may turn out to be fire-sale prices. I favor the latter course of action, because COR has enough compounds in the pipeline that they can still make their money. Right now the survival of the company is at stake, and should not be at the mercy of one or two studies that can go wrong for any number of reasons.
Tran's history with Lilly may increase the likelihood of a deal with that company, because Tran likely knows a fair amount about the cards Lilly is holding, and Lilly, which has its own in-house ampakine group, might be interested in comparing the efficacy/toxicity of COR's ampakines against their own. The deal would have to be very carefully vetted, because the possibility exists that Lilly would use COR's compounds to trouble-shoot their own, allowing them to bring their own modified compounds to market and cutting COR out of the profits.
I hope that when all is said and done, we'll at least have some idea about the specifics of the FDA's reasons for rejecting CX-717.
I don't think it is necessary to be totally paranoid either about the FDA or COR regarding this outcome. The phenomenon was seen at 70X the clinical dose, which to me suggests that a. It's not terribly meaningful clinically, and could well give rise to an artifactual signal; b. the FDA really didn't want to approve a new class of drugs for ADHD as the first indication.
I do suspect that COR's management was less than candid about the whole affair, since all along there were delays, silences and actions taken that belied their optimistic words: first there was the long delay between the CC announcing that the histology was due to artifact, and the actual submission of the data to the FDA; then there was the long delay between news from FDA's neurology division and the psychiatry submission; then there was the PIPE that telegraphed a lack of confidence in the IND submission, then there was the most recent CC, in which the focus was on a completely new indication, RD, finally there was the puzzling Rodman & Renshaw review of orphan disease indications being pursued by microcap biotechs, in which COR was played up (market outperform) while at the same time the bulk of their discussion focussed on ampakines as a treatment for ADHD, which is anything but an orphan indication (I am paranoid about that group, don't believe that its research and financial branches are independent, and don't rule out efforts at market manipulation).
Each of these ephemeral occurrences can be explained away, but they all can also be explained as resulting from some less than stellar news that was withheld from us. This bad news need not have amounted to much, given the FDA's extreme caution about new drugs, but I still feel that COR's management may have been less than fully transparent. I don't know what the standard is, so I don't know if this is sleazier than what everyone else does.
On the other side, at least in the past, Laughren appears to have been serving BP's rather than the public's interest. Mitigating factors here are that the regulatory environment was different, and the diseases being treated by the drugs were serious. Still, while I'm not convinced that the FDA is taking BP money and skewing the outcome, I am equally unconvinced that they're clean.
It's gray on both sides.
Iggs
Not too long ago you were castigating others for their lack of deference towards Stoll, and were strongly supportive of this stock. You provided some reasonable arguments for those positions. Now you've swung the other way, and are very critical of Stoll (Stool, Stole,...not you, but others). You emphasize the need for a new person at the helm as a solution to the problem. I'm not asking you to explain again why Stoll stinks, because ultimately all such efforts are 20/20 hindsight, and don't help us now.
I'm just wondering: the fundamentals being are what they are, why do you think that a new CEO would play such a fundamental role in the company's turn-around? Why do you think anyone of the caliber to turn this company around would be interested in the job? Above all, what should a new CEO do? Since I doubt you're going to liquidate your entire position this year, you must have given all this some thought. Because you're experienced and smart, I'd be grateful for your thoughts.
GFP, thanks for the details about the timelines you gave below. regarding the most recent post, I still think that the FDA objects to CX-717 or any other ampakine for ADHD on first principles, based on the fact that this is a new class of compounds. Insofar as this is right, the toxicology bar will be raised or lowered as a function of the indication and the way in which the drug is administered. Clearly, acute use is less of a problem, but for a disease like AD or an orphan indication (even better), the bar is lower. I think that the 70x clinical dose requirement for CX-717 may have been a missed signal to COR to back off on ADHD.
It's not clear to me that the IRB necessarily would take 6 months. It essentially replicates an active protocol, with less stringent provisions.
A lot of people are selling their shares, but all those shares are being bought. At least some of those who are buying see the growth potential.
In retrospect, I feel that my focus was too narrow: I was mesmerized by the histology result, the strong preliminary data, the company spin, and didn't think about the political liabilities associated with an ADHD IND, or the weak financial situation of the company in the event of a negative decision.
I think that I tend to be too narrow in my focus now too: the money situation is terrible, the pipeline is too slow for the cash flow, and financing will be fatal. Stepping back a bit, the company has a class of compounds that are well-tolerated in humans, and that generically have cognitive enhancing effects, with new, more powerful compounds in the pipeline. Meanwhile, the industry as a whole is IP-poor, and reaching the end of their patents. Thus, while COR is clearly in a very weak position, the people they are negotiating with should be quite motivated to make a deal.
I feel very strongly that COR needs partnerships -- even suboptimal partnerships -- to shepherd their drugs to market, and to provide cover when they go up against regulatory agencies. I'm not at all sure that dilutive financing will be an option by summer, given the tightening of credit markets.
Why wait until August to do another financing? What are the odds of another PIPE now, before shell-shocked longs have decided to cut their losses? The current price may represent the 12-month high, and realistically, the company needs money to carry them for at least 2 years if they want to have a chance of maintaining independence and bring in funds. If they do the PIPE in August, things could be much worse, both in terms of the company's SP, and the availability of funds.
gfp
Thanks for the detailed posts about this sinking ship. Do you have estimates on how long it will take for the PET study to be completed? At this point it really does look like a game of inches. If the company can obtain positive results before the money runs out, then maybe there's hope.
For better or worse, I think we're stuck with the management team in place, because I don't think they will be able to attract the kind of talent that could turn this thing around, and there isn't time to bring an outsider up to speed. Is it possible that Varney would take over from Stoll? How would this affect the company's prospects.
I'm not sure that your assumption that CX-717 is poisoned is correct. It all hinges on the FDA's reason for rejecting the compound. If they say "your data show that high doses of CX-717 cause histological anomalies that you can't explain" then the drug may well be dead. If they say "you have provided an adequate explanation for the histological anomalies associated with CX-717, but you haven't repeated those studies to corroborate the negative result" then it is possible that BPs may see the FDA's decision as resulting from caution.
I would be extremely grateful if others on this board could look at the timelines of the various projects/compounds that COR might pursue, in light of the money available. I think it is reasonable to assume that by August, another round of financing will be required. That means there are 10 months to return this company to viability. What are the mechanisms/options?
Jim
I'm not giving COR the benefit of the doubt, and found that there were valid grounds, based on first principles to turn COR down(new class of compunds; non-lethal indication; juvenile population; existing compounds). The problem I have is that Laughren appears to have a double standard: msg# 11463 documents cases where he minimized or ignored drugs' adverse effects on children, and these drugs were being brought to market by BP.
It could be that this is a trifecta: crappy compound; legitimate reasons for killing the study; and illegitimate reasons. My own feeling is that the legitimate reasons may have provided cover for some sleazy reasons, because there is no reason to assume that Laughren is incapable of such actions.
This is stupid. Neuro says what he thinks, and he's wrong a good bit of the time. I've never met anyone who isn't. There should be some hobo honor on this BB, since we've all been fleeced. Laughlin is the problem, not Neuro.
I don't think this is OT at all. It's one thing if Laughren has a uniformly high standard, which would reflect his role as gatekeeper and protector. The slides suggest that when drugs come from other companies, it's quite the opposite. This thing really does stink. He's knowingly approved drugs that don't work and that have terrible side-effects for non-life threatening diseases.
I'd be grateful if anyone could explain to me why I'm wrong. I don't like paranoia/cynicism.
>>RD and analgesia. The fact that opioid receptors can influence respiratory function 'downstream' does not mean it has to be a two-way street. The receptors CX717 hits for RD are not opioid receptors, and the animal studies showed no effect on analgesia. We can't be sure that is the same in humans yet, but downstream interventions do not necessarily affect upstream processes.
I didn't mean to imply that ampakines work on opioid receptors. Neurons involved in espiratory rhythm generation express opioid receptors, and their depression is a direct (not downstream) effect of opioid administration. They also express AMPA receptors, which is why this depression is reversed by ampakines.
Afferent pathways (at least with respect to these two receptor types) are analogous. So if ampakines rescue respiration, I don't see why they wouldn't also reduce analgesia.
Sanfilippo's thesis hinges on whether or not the FDA's decision was grounded in the science. So far, I've gone along with what COR has claimed, namely that the problems seen in the histological samples harvested from some animals exposed to 70X the clinical dose was due to artifact. If we're being misled on that count we're in a hopeless situation here, because we don't have access to valid information.
I think the FDA could have ruled against CX-717 sight-unseen, because it's an entirely new compound, because the drug would ultimately be taken by kids, and because it's not life-threatening. This is supported by the absurdity of a 70x dosing. Basically, I think that the rejection of cor's proposal says nothing about the compounds, and everything about the regulatory environment.
This article is useful though, because I think it represents the consensus of those who know anything at all about COR. SP is going to stay below a dollar until this consensus is replaced. This will require well-designed trials, and some unambiguous successes.
I think this is very good news. Among other things, it brings another pair of eyeballs to this mess.
This hiring may also partially explain the delay in the rollout of plan B. Dr. Tran is going to be instrumental in bringing this company around, and it's not clear to me when he received clearance to get the full story on all cor's compounds, and on its dealings with the FDA. Assuming that his input into plan B is recent, it seems correct to allow him the time to provide input and be part of the process, rather than receive marching orders.
That said, I think what Cor has to do is clear: it has to bring an ampakine to the clinic in the treatment of an orphan disorder. This is the ON ramp for new classes of compounds. My choice would be CX-717 for palliative treatment of ataxic breathing in Rett's Syndrome kids.
I think the RD indication is a long shot. Opioids induce respiratory depression by the same mechanism that they provide analgesia: they depress neurons that express the appropriate receptor. Ampakines counteract this depression effect across the board, so I think it will be tricky to work out a dosage that rescues breathing without eliminating analgesia. My sense is that it may end up being a kinder, gentler Naloxone, which is no small thing. It makes it less likely that the drug will be effective in the context of chronic pain, because any benefit to breathing may come with some loss of analgesia.
I'm selling enough shares to reach the ceiling of the tax benefit I can gain from that transaction for this year. I am planning on buying back 1/3 of what I sell. My thinking is that by doing this I reduce my cost basis, lock in my loss, and somewhat reduce my exposure.
Are there constraints on how soon I can buy back in?
TIA
Aiming4, your evidence for COR management's foresight undercuts your claim. They raised cash under unfavorable terms, and it isn't enough to make much of a difference. The notion that inlicensing might bail the company out has been almost uniformly seen as an utterly foolish course of action, since development of an inlicenced drug would come at the cost of ampakine development.
I've deleted a lengthy disquisition on why COR is dead meat, since this isn't particularly helpful. The focus should instead be on what the company HAS to do, namely:
>Provide the investment community with a robust development timeline, for indications likely to gain approval by the FDA (i.e. orphan/neurodegenerative/short term) that can be executed with the funds available within a year.
>Jettison the compound by compound partnership model. The company needs to focus on bringing any ampakine to market for any indication, and to do this, it needs to provide bigger entities the incentives to establish a partnership. The most attractive candidate is likely AZ.
>The company needs to engage in buyout negotiations.
I think all three of these tasks need to be undertaken in parallel. Development of a feasible in-house clinical program will constrain the scope of any partnership deal, and buyout negotiations will provide leverage to establish partnerships under acceptable terms. By the same token, credible in-house and partnership proposals will increase the company's perceived value in the event that a buyout begins to take shape.
To the extent that the first or second tasks are impracticable, the third task should be undertaken, with some realism about the company's value.
Unless we're all delusional about the promise of ampakines, I think that there has to be a way forward.
The latest warrants (due for feb) are priced at $2.65. Does this constitute the ceiling for the stock for the foreseeable future if the company isn't sold?
What about CX-717 to facilitate respiratory weaning in high-spinal paraplegics? I'm not a clinician, but I think this is a problem that currently is difficult to solve. This might be an indication that could be pursued in parallel to mitigation of opioid-induced RD. The possible advantage is that a cohort of these patients are otherwise healthy, and by the time they are in a position to be weaned from a respirator, their neurological condition is likely stable.
Basically, COR needs a pimp. The strategy pursued in the CX-717/ADHD debacle was to bring the process forward independently to a point where a BP partnership could be negotiated on terms most favorable to COR, and that didn't work. They need a BP partnership or a buyout now, and the terms will be unfavorable. By entering into a BP partnership prior to approval of an IND, and under terms less favorable to COR, the company hedges against the outcome we have witnessed, and in addition, may make a negative outcome less likely. BPs get treated differently by the FDA: there was animal data suggesting cardiovascular problems with vioxx, but these were disregarded.
This is an unattractive option, but I don't think that COR has the time or the money to shepherd its compounds to where they will generate revenues in the current regulatory environment.
Basically, COR is going to have to let go of some of its IP, either through a suboptimal but cash-generating (and SP-lifting) BP partnership, or through a buyout. The terms for another PIPE will gut the company if SP stays below 2, and the only things which would drive up SP are either some really good news in the clinic (unlikely, given the insubstantial human-subjects trials currently being envisioned), or a partnership. So basically they need (at least) a BP partnership (or buyout) to delay the need for a PIPE, and this partnership will (by boosting SP) also permit COR to negotiate a PIPE under terms that won't doom the company.
The only silver lining that I see is that COR will be negotiating from a position of weakness, but not abject weakness, because of their cash. As the money dwindles though, entities interested in the IP will weigh entering into a deal now against entering into a deal later, when the company is still further weakened, and more favorable terms can be obtained. This means that COR will likely have to move fast.
The whole thing brings to mind a quip by Woody Allen "Sex is like bridge, if you don't have a good partner, you'd better have a good hand". COR no longer has a good hand, at least not in the time frame that its finances force it to operate within. They need to find a partner, preferably big and rich.
The option to sell off the shares purchased as part of this summer's financing is due in feb. Does this guarantee a clamp on SP at their minimum sell price? What is the price at which they can sell?
I think that the FDA would kill any appeal, and then stomp on the corpse. They absolutely don't want to set the precedent of having successful appeals go through, because then every company that feels it didn't get a fair hearing (and there are plenty) would appeal, and their already disfunctional beurocracy would implode. High impact journals do this with badly reviewed papers, and most professors do this with badly worded/ambiguous questions.
I think ADHD was a strategic mistake, and I think the FDA's response is understandable. Ampakines are a completely new class of compounds, and ADHD is a non-fatal condition whose core users are the young. The FDA knows that even if the trial was for adult ADHD, if/when the drug came to market and was found to be effective, doctors would quickly be prescribing it to kids. The FDA knows that there are no trials that will effectively detect adverse effects of a new compound on 0.01% of the population, but with 17,000,000 potential users, 1/10000 is till 1700 potentially bad outcomes -- a political nightmare. I think that of all the conditions that ampakines might be able to treat, ADHD may have been the worst to start with.
What cor should have done, and needs to do, is work its way up the food chain. It needs to initiate trials for orphan indications (first and foremost Rett, Huntingtons) where the target population is small, and in desperate need of treatment. In parallel, it should pursue indications where the use is short-term (RD is the obvious candidate -- I just don't know what the trial design would be). After that, neurodegenerative diseases can be attacked, since the there are no effective treatments and the disease is fatal anyway, and then, after it has been established that ampakines are indeed safe and well-tolerated, drugs for non-fatal psychiatric diseases can be brought to market.
I've lost $50K, and feel like an idiot. In retrospect, what I've written above appears pretty obvious. Part of the problem is my daily habit of going to this board. The goal has been to gain information, but the result has been unfortunate group-think. The consensus views here (based on polled predictions) have been consistently wrong, the naysayers are more often shrill and paranoid than reasoned in their positions, and the responses of the rest of us are generally inappropriately hostile. If we are going to be helpful to one another, we need to be more tolerant of dissent, and more sensitive to the danger of self-reinforcing consensus.
The irony is that those who completely disregard the story, and just follow the gyrations of this highly volatile stock have probably made very good money. They buy when there's blood in the streets, and they dump on each uptick. If I had done that, I'd be ahead 30K and holding the same number of shares.
The big question now is whether cor can stay afloat long enough to bring in revenue by means other than dilutive financing.
Could this whole thing be a setup for a buy-out? What typically are the terms of a buy-out wrt shareholders of the bought company? The IP has to be worth more than it would cost to buy out cor.
TIA
Where's the bottom here? What are the criteria for delisting a stock? I'm trying to figure out what to do with my near-worthless holdings.
I feel sick. My condolences to everyone else out there who hold as much or more of this stock than I do. ADHD was the wrong indication to pursue. I hope that in the days ahead we will be provided with more information about what the FDA objected to. If the problems were substantive, then I feel we were misled. It's hard to see how the FDA would shut the whole thing down if it weren't substantial.
If the FDA rules against the CX-717, the stock will fall below a dollar. If the ruling is favorable, the stock will be worth at least $8. The odds are good that the FDA's ruling will be favorable (conservatively, 0.7). If you think of it as tiddly-winks instead of money, greed and fear (both bad) go out the window, and you can make a rational decision.
I think there is relatively little cor bashing on this board because those who think the way you do sell their shares and move on. The rational thing to do is sell stocks that don't make you money. I'm in the hole with you, but I'm in it recognizing that I'm choosing to be here. Everybody focuses on what an inept CEO Stoll is, but we may be an even bigger bunch of idiots for going long on this stock. Don't blame him, blame yourself.
PS have a little faith too: I'm in this because the science is solid and the upside is big. I'm hopeful that things will get considerably better in October.
I wouldn't unsubscribe now for anything! If 10/11 goes our way, this BB will be fun to read, and if it doesn't, it will be the equivalent of a room full of people who just snorted wasabi up their noses. I wouldn't want to miss that either. I have my life's savings on the line, but I can still find humor in all the American Buffalo meanderings here.
The problem is, at this stage in the process, any problem is a major problem. We lost a year because of an artifact associated with a 70x clinical dose. We're lucky water doesn't have to be cleared for approval by the FDA. My concern is that in putting together the 6' box, cor included data that could potentially raise flags. As other companies have found out the hard way, the things that can create problems can be pretty ridiculous. The fact that CX-717 cleared neurology is good, but it doesn't follow that psychiatry follow suit, since the issues that could hold things up could be minor.
I very very much hope you are right. I put these ideas out to get reasons for why they are wrong, and the reason you give is a good one. What we're left with as the last problematic unknown is how much of a hard-ass the psychiatry head is.
He did say that. If there were any more substantial problems, I very much doubt that he would have volunteered that information, regardless of whether or not the problem(s) were solved.
Paranoia, but here goes: two odd developments over the last few months: no prompt IND filing on the heels of the Neurology decision, and the foul share dilution. I'm concerned that in redoing the toxicology, they found problems that were sufficiently addressed to warrant a filing, but that took a whole lot more work than was expected (hence the delay). My paranoid streak makes me worried that the submission to psychiatry may not be the slam dunk we all assume it would be, and that this explains both the filing delay and the fund-raising.
I think the probability of a negative ruling at or near 10/11 is low, but I'm not convinced a green light is as probable as I would like it to be. I think there's a good chance that the FDA will send Cor back to the lab.
I didn't mean to say that an optimal deal was unlikely -- I don't know what the likelihood of that is. My point was that even if it wasn't optimal, the net effect of a deal will be big, and the suggestion that the FDA may countenance bringing ampakines to market much, much bigger. We focus on financing, but I see that as a symptom. The disease is a regulatory agency with a near-impossible agenda, insufficient funds, and a gun-shy attitude due to recent high-profile f-ups.
I think that worrying about tea-leaf reading of the CC in the context of the impact of the FDA's ruling on CX-717 is the wrong emphasis. For this company, everything hinges on the relatively rare outcome of the FDA allowing the first of a completely new class of compounds to make its way to market. I wish I could say that based on what we already know, a positive outcome for cor is likely. If the FDA does approve CX-717 for phIIb, a BP deal will be signed -- maybe not the optimal deal, but enough to legitimize the company and reduce the need for a dilutive financing.
The really important thing though, is that we will be that much closer to seeing an entirely new class of molecules approved for treatment of neurodegenerative/psychiatric indications. The first drug's approval will make subsequent applications easier, and as far as I know cor has the ampakine platform IP pretty well sowed up.
There may be plenty of short-term tactical reasons to get rid of this stock, but I don't think that the CC is particularly meaningful one way or another with respect to a decision to buy or sell this stock based on its IP value. If ampakines are brought to market, I would guess that most of the money made by investors will happen after Stoll has retired to his spread off Newport Beach. We live or die by the FDA.
Non-opioid analgesics may be around the corner, but the potential user base of opioid or opiate analgesics worldwide is so huge that there will be a market for ampakines in RD. The tox work on CX-516 is pretty much done, and CX-717 is close behind, and opioids/opiates are a known quantity.
It was neuro's idea, implicit in his question to stoll
I think that using CX-516 as the candidate drug to treat RD has the advantage of separating off discussions of RD outlicencing from discussions of ADHD outlicencing. Given the therapeutic timeframe of opioid-induced RD, CX-516's half-life would be fine.
There's central as well as peripheral apnea. You suffered from peripheral sleep apnea (airway collapse); this can be accompanied by (and may lead to) central apnea (i.e. respiratory rhythm generating network depression). It might be possible that at the right dosage, central apnea is mitigated without impacting sleep. In the same way, it is likely that at higher dosages, ampakines may counteract the desired analgesic effects of opioids.