Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
That’s the truth. Walking around looking at the gingerbread houses on Martha’s Vineyard yesterday evening, I was in a state of surprise that V could pose this level of continued regulatory risk to investors by the FDA. You’d think AMRN/EPA was Gregor Samsa metamorphosed.
Simply surreal to grant priority review and then all but claw most of that time back.
Thanks Zu! Its a big topic. -SK
James, that reminds me of that SNL skit - Kiss Me I'm Irish
LOL. No, probably not.
NO, JR Nelson and his team along with AMRN, are working very hard and laid this all out.
I've tried reading and learning about what they are describing since I find EVAPORATE rather intriguing. Doing my small part here to amplify a little bit of their strong efforts.
Huzzah to Japanese researchers & MDs like Dr. Ryo Nishio for laying the groundwork. Well, if you accept their findings and I didn't screw up my own understanding of EPA 101.
JL, thanks I'm working on your article - it's a good one.
And another on PTX3 which seems to point to the answers are yes or no, depending on when and where?!
www.ncbi.nlm.nih.gov/pmc/articles/PMC4995820/
Here are just a few of the numerous background Japanese studies that Dr. Nelson cites from which I'm surmising that less inflammatory macrophage cytokine secretions = less PTX3 of the heart variety (in the coronary sinus - CS) which points to lessening/disappearing of disease severity. An effect not really observed in the peripheral artery. Likewise, please feel to correct wherever I've mixed up my limited understanding.
www.jstage.jst.go.jp/article/circj/80/2/80_CJ-15-0813/_pdf
Below he cited Nishio that using ROC analysis a PTX3 cutoff value of 3.46 ng/ml predicted fibrous-cap thickness of <65 microns with 85.5% sensitivity & 68.3% specificity (EPA correlates).
www.atherosclerosis-journal.com/article/S0021-9150(14)00123-3/fulltext
www.ncbi.nlm.nih.gov/pubmed/24670266
Finally, OCT version - macrophage grade substantially down with EPA + rosuvastatin in the LINK-IT trial.
http://www.onlinejacc.org/content/71/11_Supplement/A1076
Zu, thanks. I think you’ve tracked their patents for years? Do they have them for pitavastatin + EPA EE as well? (EVAPORATE)
Perkins Coie is very large. Seed Barry is also big in IP here in Seattle.
To Zip’s point, I assume the statin concentrates in the EPA without increasing the capsule size? If so, then a slight bit of -convenience- value-add which might help compliance.
That's horrible Capt Beer. :-/ My thoughts are with y'all.
Yes, ORBAPU. Indeed, I've take family and friends there when they come to town. You can watch the seaplanes take-off and land on Lake Union. Also, if you rent an electric boat, you can putter over & tie-up on their dock while dining. It's a solid PNW owned chain. My favorite for seafood is Rays. Can. not. be. beat. Try the black cod (sablefish) - its a very oily fish, but the way they smoke it will bring out the seafood lover in you.
Any of the Tom Douglas restaurants will give you a foodie experience (like Cuoco) - I've met Tom on multiple occasions - he's a local area icon himself. A lot of his restaurants are around South Lake Union.
The downtown waterfront is a mess, Mets. They are still tearing up an elevated highway from the 1950's. But, should you venture there, Anthony's is a good choice or Aqua is another spendier, but even better option especially at sunset. For a view of the night skyline, Salty's in West Seattle is good (very expensive for what you get, because its all about the view). Walrus & Carpenter over in the Ballard neighborhood is good.
If you want steak, the Metropolitan is good (like a Smith & Wollensky). Matt's at the Market is by Pike Place (which is a zoo in the summer).
For pan-Asian (whatever the heck that really means), Wild Ginger is good. Lola's for French (but, Boston does French way better than Seattle). For sushi, Chiso or Tamura.
And I just have to, best Vietnamese in town is in Little Saigon at the Tamarind Tree (in the back of the shopping center). The shopping center is an absolute 3rd world dump. But, don't let that fool you. The food inside is the real deal. The coconut milk with sticky rice on the banana is super for dessert.
Enjoy! This is the right time of year to visit.
Chemist 2 - I dug out my ratio.
AA:EPA - 3.1:1
O6:O3 - 4.7:1
This was from back in Dec, after 3 weeks of taking 2g of OmegaVia/daily as some may recall b/c I posted to the board. I was trying to see if it would reduce arthritic LBP in my L5/S1 from a slight tear in the disc causing desiccation and a mild bulge w/o protrusion + mild to moderate hypertrophy in my L4-5 and L5-S1 posterior facets (and sacralization of the L5s).
However, that was when I started feeling the chest fluttering and it was very uncomfortable. So, I stopped completely and was back to normal. Now I take .5-1g 3 or so times per week. Plus, I eat seafood twice per week. When I had a check-up in early March I asked the internal medicine physician about EPA levels and V (just to see what she would say since she was new to me as my OB-GYN didn't have time to double as my PCP anymore). She raised an eyebrow at me and asked why I was asking. Big city docs...push back! She said to work on my "diet and exercise." Maybe, I'll get around to adding diet and exercise to my "to do" list for next week.
-------------------
Dr. Nelson did say that the Japanese (did) have 3x the EPA serum levels that Americans do - we are about 26 he said from too much oxidized fats in our diet. 20-30 years ago he said they had 95-100 when their big studies were done. Now, they are down into the 60's.
It's because the younger Japanese have been eating a more Western diet.
In regards to EVAPORATE, I think of AMRN's own version of an EPA meta-analysis as JR Nelson, and M Budoff, Wani and May's 2017 - "Potential Benefits of Eicosapentaenoic Acid on Atherosclerotic Plaques."
Zu and the board talked about it then see post # 101954. AMRN review of imaging modalities by Japanese Pyr rejected it for several reasons, like vegans don't have plaques, etc.
Again, JMH(uninformed)O, I think EVAPORATE's utility is about being able to "see" the changes and identify them with ever greater specificity, sensitivity, spatial resolution, etc. (both for clinician and patient). When a patient can visualize the changes, they may be more inclined to stick with the therapy. Like me with my back, my engagement factor went up when I saw the X-rays and MRIs. But, isn't there a cheap pill fix - I don't want to do yoga?! LOL.
An EPA:AA - cheap blood test will probably suffice for most. But, then you have all the various other imaging modalities which keep improving which provide visual proof that IPE therapy is working.
Dr. Nelson said his Dad had been an amateur astronomer. They admired William Herschel. I perked up when he was using astronomy as the gateway to understanding what was necessary to "see the improvements" from the various markers being influenced by EPA. Sidenote: last summer we'd gone out to the Goldendale Observatory when Mars was super close to Earth (and we purchased a starter Dobsonian telescope as well - night stargazing is fun to do with children).
Angiography/cardiac catheterization which Dr. Nelson said has been around for a long time is good to about 100 microns. What the human eye can see.
Then, you have IVUS. And IB-IVUS - integrated backscatter ultra-sound (measuring the amplitude changes of the infrared wavelengths that bounce back mathematically because they vary depending on the substance). The smaller the wavelength in the formula, the smaller the resolution between 2 points. I forgot the name of the formula he referenced.
Next there is OCT with a 10x improvement over ultra-sound in the ability to see the effects on the thin fibrous cap...OCT has a resolution down to about 4-20 microns.
What about nano-OCT?!
Macrophages with a scanning electron microscope at 4500x (more EPA = less PTX-3 produced by macrophages) -
The best scanning electron microscopes can magnify up to around 250,000x. But, now there are tabletop SEMs for amateur enthusiasts.
Here's a salmon scale at about 4500x:
NW icons under the microscope
JFM - Cichlids are great aquarium fish. This is an awesome classic, not on cichlids though, if you can find it - I bet your jaw will drop in amazement at the complexity of coral reef fish behavior!
To answer your question on algal oil, the main reason is that reactor-grown algal oil is 3x the cost of marine ingredients. The size of the market for consumers willing to pay that much extra for a piece of premium farmed salmon is limited. Veramaris, may have "capacity" to produce a lot of algal oil - but I would guess they will actually produce only about a third of it, due to market constraints. Also, almost entirely I believe farmed salmon are fed fishmeal from other species of fish. Salmon fishmeal tends to go into pet food because pet parents can't get enough of it for their fur babies. So, no Creutzfeldt-Jacob prion types of issues in farmed salmon.
Many people disagree on farmed vs wild salmon. Personally, I like the taste and texture of wild salmon better. I live in Seattle and its readily available here. Also, the nutritional profile of wild salmon is in most run-of-the-mill commercially available instances going to be better than farmed salmon.
However, on a strict O-3 comparative basis (setting aside all the other nutritional components) if farmed salmon were given feed with higher levels of EPA/DHA then they generally would have higher O-3 content.
Instead since the cost of marine ingredient feed inputs has gone steadily higher as output has decreased off the coast of Peru & Chile, the inclusion rate has fallen and more plant-based crop ingredients have filled the gap. Thus, the tested O-3 % in farmed salmon has fallen from about 12-14% to now about 6-7%, most especially from Norway sourced Atlantic salmon. Scottish & Chilean salmon farms still use more marine ingredients. Norway is starting to bring up their marine ingredient inclusion rate again.scottish vs norwegian farmed salmon
And then, what if the marine ingredients aren't even helping with higher EPA/DHA levels at some predictable conversion rate in their meat (beyond a certain point) given various genetic expression favoring this or that metabolic pathway in each distinct Atlantic salmon themselves?
ATL salmon EPA DHA and gene expression differences
So many mysteries still to be deciphered.
Greymatter - JL and I probably agree more than actually disagree with respect to the topic of krill. Krill feed on zoo and phyto-plankton which are synthesizing (making) the EPA, etc and then it bio-accumulates on up the marine food chain. I'm acknowledging our agreement in hindsight, but from different angles.
IMO, JL is coming at krill supplementation from the proper perspective of actual patients evaluating their LDL-C, etc. levels with their docs. If krill oil unadulterated, is inconsistent with the Friedewald Equation as he notes, then the level of benefit won't be there relative to EPA supplementation alone even if krill uptake is more readily bio-available. I get the "scam" reference in other words he cited with respect to lowering Trigs w/o raising LDL-C. That makes sense to me now.
The reference point I tend to focus on, is that there is EPA locked up in the krill oil waiting to be cracked open. To paraphrase Gertrude Stein, EPA is EPA is EPA.
Or if I were to put krill molecule parts into KevvyG-speak, we'd need to cut off the phosphate/choline heads and let the little liberated hydrophobic fatty acid EPA tails swim free. In other words, go down from the big molecular combination units to the little units. And then put the little units (EPA) into V.
I think Rimfrost and Aker are keeping each other busy right now. The Norwegian government last December said Rimfrost's process to produce krill oil was OK (versus Aker's process patents) and now Rimfrost has 2 trawlers down fishing for krill in Antarctica in 2019.
I still see oxidation differently. I bet a head-to-head comparison would show you'd need less tocopherol AOX added in krill vs fish oils. And, then this would vary yet again between which species of fish we are comparing from whatever natural AOX levels they have.
Only Zager & Evans do -
In the Year 2525
STS - Right, so not mission critical for either of them; small business units overshadowed by the primary businesses in terms of where their revenue comes from... - size does matter some times more than at other times, in many instances also in terms of negotiating power with customers. It's like in medicine, specialties that do procedures have more relative leverage than those that "consult" only.
My main point was - those two companies are bigger than AMRN. So, who's wagging who here, at this stage of AMRN's development?
Vertical integration - what level of integration are we talking about? I'm not defining it specifically as every single stage although many companies go that route (its more mgt strategy - and can even be in the variety of, let's bring it together and get bonuses...2 years later...hey let's break it up and get bonuses - See DowDupont-Corteva).
Securities - a lot of them are integrated as well...and as far as size- GS at $1.5T of assets under mgt vs Jefferies $47B...
Chevron/Exxon - what about them isn't integrated for the parts of the supply chain that are profitable to them? And farm other less profitable parts (for them) of it out to Schlumberger, etc?
Kellogg's a branded food company doesn't need to own the corn producing farms, because their manufacturing facilities are set up close to the corn growers, so they are enmeshed in the corn grower's ecosystem like co-ops, so no need to add grower risk to their company as they already have it indirectly through raw material costs. Also, see pg 2 Kellogg's raw materials
We enter into long-term contracts for the materials described in this section and purchase these items on the open
market, depending on our view of possible price fluctuations, supply levels, and our relative negotiating power.
Vertical integration is one of the options of strategic development for the mining companies. It results from specific needs of a basic company and means the takeover of an outside company involved in one part of the production chain. In the mining industry, the integration may concern mining–processing or mining–processing–metallurgical operations
Thanks Biochica - Yes, thanks. I wasn't here during Marine and Anchor. And so was going off what Dr. JR Nelson said about EVAPORATE and how they went about figuring out dosages from all of these prior studies compared to declining EPA:AA ratios in Japanese population, even since Jelis was done because they are eating less seafood. So, at some point the 1.8g/day for Japanese people might not be enough either. I'd have to look at my notes on what he said that decline has been. They evaluated American baseline EPA serum levels, too.
Chemist2 - that's awesome! Your wife's - ACK! I'll dig mine out and post - I sent away for it back this winter when North and I talked about it.
I'm going off all the well-documented Japan studies. It's practically in bright neon lights in Times Square. Except during mid-town power blackouts.
That's how AMRN knew to dose at 4g to begin with.
Expect more dosing meta-analyses to add to the pile of 33,000+ O-3 studies and counting.
Nuke'em - really? You had to go there! haha.
it's like my ex during PMS, couldn't hardly stand it...
Tasty, marketing collateral and buzz (such as it is) factor.
Use less spit. ;-P
Yes, Tasty - glad you keep track of all the CT detail and dates.
Right. Go with Trigs > 135 for expansion which captures the lion's share of the CVD market.
And see if can add later on, EPA:AA at 1.8:1 or whatever it is/may be. Forgetting at the moment.
Tasty: Indeed. That's exactly what I thought might happen with EVAPORATE. I said it earlier in an Ihub PM this morning. Phase IV confirmatory trial now. Cool.
To me, this is yet more good news.
AMRN is going to try and get EPA:AA added as a bio-marker. Even if the FDA doesn't allow that then AMRN gets:
1) More marketing collateral to convince the early majority (remember the innovation curve) - with visuals. We're all human; we like visuals.
2) Doctors' groups may appreciate the chance to build more business for their cardiovascular clinics with other tests. Instead of only a $300 office visit and writing a RX for V, Cards will now get to offer different confirmatory tests or confirm their social network status with more referrals for relevant patients = positive business development. Patients like to "see" the progress (reduction in stenosis, etc), if insurance will pay for the tests.
Doctors like tech as much as the rest of us. I suspect this will help propel sales of OCT equipment, etc. for wider adoption, too.
If there is a delay in EVAPORATE - it won't be because of a "clinical hold" - it will be because they couldn't get all the patients back in by the deadline. It's hard in the summer to corral patients. So, they'd have to go out another 9 months. No big deal.
Anyway, I wondered why anybody who was touting EVAPORATE as a reason for a "clinical hold" (due to MO as the placebo) would even CARE about EVAPORATE since it's replicating Japanese studies. And they don't think Japanese studies are worth the paper they are printed out on, right? LOL.
I continue to "hang in there" and am nibbling.
Right, STS we just talked about this, wasn't it last week? and that's what my point has been - for the smaller guys, AMRN has the easiest ability to tap the capital markets and build a program with them for expansion. In that sense the smaller API suppliers would be "beholden" to AMRN.
The big suppliers, just googled 2018 -
Nissui - converted into USD $7B +/- (from Yen) in revenue
BASF - EUR 68B 2018 revenue
BASF May 2019
And yes, BASF is integrated for certain stages, past the crude. Back in 2013 I think it was they bought Cognis for $3.84B (food grade O-3) to diversify out of just the industrial sector.
KD Pharma? Others?
Vertical integration is common in commodities...low margin/high volume.
Agree, it will be interesting to get a little more color -
Supply/acquisition ornamentation/reps/ads
See my post a few moments ago...
It's going to take a lot of fresh capital investment to get there. JMHO.
I know youz crazy. Shhhh. Don't tell anyone, but I've looked on the internet before at small tanks 13-20g size to try and grow different algae species at home - figured it would make for a good science fair project for the kiddo! Home brew.
Like an aquarium, same same, but different!
If 20,000-30,000 mt of algae oil production assumed previously, then Veramaris saying 15% of aquaculture oil (aq) needs should roughly pencil out as follows:
1,000,000 mt annual oil production +/-
750,000 mt = @ 75% to aq
---------
112,500 mt => claimed @ 15% of 75% aq demand, = new as of July 2019 additional algae oil when Veramaris eventually expands to use full Nebraska capacity
112,500 mt => yields approx. 45,000 mt total potential of 40% DHA in Veramaris new high yielding Blair, Nebraska tanks
----------------------------------
High yield EPA SCO species per Bimbo:
Nannochloropsis - 35%
Chlorella protothecoides - 37%
Yarrowia lipolytica - 51%
Porphyridium cruetum - 20%
Pavlova sp. - 18%
Euglenia gracilis - 16%
There's still a lot of know-how being figured out, that goes into making algae/SCOs work - as you can see from Veramaris, only beginning stages of getting commercial volumes and that's a DHA species. Bio-tech.
If you saw the Economist article I linked to a few weeks ago - then you begin to see how potentially this could all fit together in the next decade with the build-out of new not-found-in-nature enyzme extraction (designer proteins)...all done in the tanks: put as yet undesigned enzymes in a separate tank after grow-out...and handle most processing in one location.
Cool to think about for the future and how that would balance out our out-of-whack AA and sugar heavy diets. Space age! ;-D Plus, then you get KO potential, more costly than white table sugar still, but somewhat widely available - subject to algae sugar substrate inputs, energy costs, location, etc.
But, we aren't there yet as there is still a ton of commercial development work that needs a fresh infusion of capital post the algae fuel boom and bust cycle of 4-7 years ago (remember Uncle Sam as one of the investors?).
So, for now fish continue to be the- go to.
You're so funny! Can't get the grower out of you, eh?!
No, they don't beyond being somebody's hobby horse.
Better off going the algae bio-reactor route - at least 28 days to grow out vs 1-2 years. But, then I'm thinking you'd need a GMO algae to synthesize EPA.
This is part of the premise behind AQB - splice a gene from an ocean pout and a King Salmon into Atlantic Salmon to make it grow faster. Grow out then can be in 12 months instead of 18 months. You save all the costs of that extra 8 months plus you reduce the risks of if something bad happens at month 16 for example, after you've invested all that cost. I think they are supposed to have their first harvest next year. Will be interesting to see if they are successful.
Yes. Well, AMRN has been global (Scotland, France, Germany, Korea, Taiwan, Japan). In addition, I'd like to see them on the longer term timeline develop a domestic API supplier preferably as close to Catalent and Patheon gelcap plants as possible. Helps insulate from tariff tweet risk.
Imagine if JT at some point later this year says they have $1.3-$1.5B in supply secured/ability to tap for next year (a rough doubling from 2019) and even knowing that would include likely 6 months worth of inventory into 2021, if need be. Wouldn't that be cool?
If they go the route of a small API plant acquisition it gives them more leverage with other API suppliers, too.
I don't think you can ever truly control supply - you manage it (although I know it's how traders and analysts like to sound aggressive to ward off market evil spirits). You have to simply get used to the idea that it's an ocean crop, instead of a land crop. And follow Peru and Chilean politics...
They already source from the Scotland plant.
There are reasons for vertical integration yes - at least even with one API plant. It's indubitably a stronger position to be in than relying only on CMOs.
There's only so much EPA that is accessible.
Insulin has been my mental model. (KO has unlimited sugar to bottle since every nation on the planet with enough water grows sugar cane, beets, or corn which keeps the price depressed...EPA is supply limited.)
And absolutely, its going to be exciting days as I said the other day - I'm just waiting on Gwen's supply consortium PR.
I think the proper inducements ($) are in place to re-open that Kalundborg plant, now. ;-P The PR in May out of nowhere was all part of the negotiating I had figured.
Good job to the AMRN team!!
Totally agree JL with respect to GS.
I always do get and agree with the substance of your underlying message regarding drug reps and the changing roles.
I also know and balance everything I hear including that which I heard from the 2 reps here in the PNW back in Feb. They are a bit spread out for ideal coverage for all the follow-up needed with all the big (let alone small) practicing groups. And the PNW is a smaller market to boot. Not like SoCal or NoCal in terms of population in other words and that's just the West Coast. I understood it to be pretty much the reps have to do all the administrative work to get things set up and maintain contact/handle issues with the HMOs etc. But, I didn't really dig deep into this topic...
My impression definitely was as you say, that the Drs for example like at the NLA in Feb- like Dr. Mason (who I chatted with), Dr. Nelson and Dr. Miller are doing the actual sales job - and AMRN is there to set the stage. You always have the starring actors and the stage hands in any production is how I look at it.
Guess I was right back on July 2nd when I first called it, in a response to KCSven where I said the early guidance by mgt smacked of a secondary afoot.
I won't mention who said any posts talking of dilution should be deleted. Instead, maybe the posts should have been stickied! Anyway, I think this is a good move by management to make some big moves for 2020.
KCSven on July 2nd:
Cash flow positive is a surprise, might take risk of capital raise down a bit so that was positive surprise news.
Yes, I agree and think short covering today tells the tale. A pre-Q2 conference call guidance update, only a few weeks in advance of it? Well, ooooookay. That's good coordination by management and others for maximum impact.
In my post 6/13 #196664 already thought these revenue levels likely for 2019 ($400-$430m).
I still think they need to raise capital for what they will be attempting since obviously as others have pointed out, it's becoming clearer that no unofficial offers in price range BB wants for either the company or their shares.
1) more inventory for 2020 + supplier tiered pricing with expansion schemes going into effect
2) ads
3) more sales people.
Debt or equity is my question. I'm leaning toward they go for another secondary like the last one back on Nov 26th.
Parvalbumins are the most likely allergans in fish for some people. Tropomyosins would also be a possibility because fish eat copepods and those could be in their bellies when caught and rendered to oil. Tropomyosin allergies would be a bigger issue for krill oil.
I think you'd need to GC-MS (or NMR) the oil to see if there are some traces of the parvalbumin protein left. Technically, there shouldn't be much if any as that's the whole point of refining/concentrating: get rid of the proteins, etc. down to the lipid (PUFA) molecule you actually want - but somebody with an extreme sensitivity might likely react to even picogram or smaller trace amounts of the parvalbumin protein?.
Here are a few links for your further DD.
wikipedia parvalbumin
FDA Q&A food allergies
toxinology.nilu.no/Researchareas/Foodallergens/Factsheets/Fishallergens.aspx
very small 2008 St Louis fishoil allergan study
Take a look at what Schizochytrium is synthesizing...
And remember they said its non-GMO.
I like the bit about astronauts too. It's Space Age, Ma'!!
Oops, I meant Lima and Santiago of course.
Supply of crude? No, not anytime soon subject to the usual force majeure events (asteroids, earthquakes, tsunamis, populist elections, strikes, el Ninos).
Supply of API? No, too many unknowns for me except as WAGs, but I think AMRN's "got this" for now. I do view this as the most likely potential future pressure point that could surface - the timing depends on RX sales growth of course alongside pricing inducements/capacity shifting/building. That's a lot of unknown to attempt to quantify. 5000-10,000 mt??? of API capacity or the ability to develop those levels reasonably quickly, that's a big sales reach still for AMRN to hit for patients as an add-on to statins + the 6 month compliance rate to drop-off, right? With modeling being your jam, how do you estimate it - would you run multiple scenarios and take their average? You could run say 2000 mt, 5000 mt, 10,000 mt, 15,000 mt...fun modelling exercises with lots of plug #s and assumptions (how reliable are other biotech comps for KPIs because each one is so different?).
Not really, but I view it differently than some people. Shortages to me make it a "hot" commodity and could make it easier to get FDA alignment and action for supply chain growth and enhancement (from media pressure) when it reaches that stage. Plus, if they GIA they could acquire or invest in new technologies along a number of different fronts.
MRM - could be.
Wait. LBL, They are NOT vertically integrated down in Chile for anchoveta. There are some Seeking Alpha motortrend reviewers out there who are confused interpreting financial statements or corporate websites, I suppose. And who conflated their divisions with visits to their IR in Tokyo?...
They've completely gotten out of Argentina (forced out "due" to illegal fishing around the Falkland Islands a few years ago). They are still involved in Chile with the following: Salmones Antartica (salmon aquaculture) and Emdepes (hoki fishing). So, while they may be invested in some of the quota holders (? behind the scenes)...they are not directly anchoveta quota holders themselves. See Sernapesca website (Chile's NOAA, like IMARPE for Peru) for details. Foodcorp CL(Austevoll/Pelagia/Epax) is a Chilean anchoveta quota holder.
Yes, assuming GIA, how AMRN aligns themselves is a key component of the growth story. That's why I like the idea of them gathering their own HUMANINT and not relying on others exclusively. Doesn't have to be an office in Panama. Could be 2 AMRN managers separately, in both Lima and Peru reporting to somebody in NJ or a regional procurement VP. Tricky the timing because don't want the market to think "supply issues" instead of "structuring supply."
Also, a lot of PR being generated on algal oil from DSM/Evonik/Veramaris yesterday and today since their Blair, Nebraska plant has finally opened. More than a few inconsistencies in their claims - lots of pump to fill investor appetite for anything bio-reactor made. latest on Veramaris
Yesterday I also saw that Janet Woodcock was talking about various FDA trends with SVB Leerink's Geoffrey Porges in Boston on Tuesday. fierce pharma july 10 woodcock
Here's another article review on the interview from Endpoints -->
-------------
July 10, 2019 09:37 AM EDT Updated 10:21 AM by John Carroll
The FDA's Janet Woodcock talks about some big changes she's pushing for in drug development, and agency reviews
Janet Woodcock is perhaps the most influential regulator at the FDA. And when the head of CDER talks about the changes being made at the agency when it comes to clinical trial designs, or the need to reorganize for a specific disease arena, an assessment of the expansion of gene therapy or I/O, common development mistakes, and so on, you can be sure the industry pays attention to every word.
So it was with some eagerness that I opened up Geoffrey Porges’ summary of their recent conversation about the FDA. And I wasn’t disappointed. In a wide-ranging exchange with the SVB Leerink analyst, Woodcock discussed the growing importance of patient-reported outcomes in clinical trials, a campaign underway now to see if CROs would help spur more basket studies to compare drugs head-to-head, and much, much more.
And she’s offering some insights into the FDA’s thinking that could prevent a lot of setbacks in the future. At the risk of losing a lot of the nuance of his detailed review, here are the highlights I came away with. The italics are mine:
The FDA may still prefer the classic, randomized clinical trial, comparing a drug against a placebo as the purest way to determine a treatment effect, but Woodcock says that the patients enrolling for a study don’t like it at all. And neither do many of the developers. “In fact, the FDA recognizes that many patients do not want to potentially receive a placebo, and understands the difficult logistics industry could encounter with a placebo design. As a result, the FDA is supportive of non-inferiority and other trial protocols, such as dose comparisons and delayed start trials.”
Basket studies, testing multiple drugs in a head-to-head comparison, are a distinct favorite at the agency. But the developers tend to steer clear, preferring a single agent approach. “The FDA has reached out to the industry’s contract research organizations (CRO) to test the waters for feasibility, but Dr. Woodcock ultimately believes it will be patient groups that drive such a radical change.”
Where do biopharma companies fail most frequently? This is one of my favorites, which underscores several themes you’ll find in our coverage. Porges note on Woodcock’s remarks: “For the clinical deficiencies, it is most common to see companies push for biomarker endpoints that have not yet been validated as correlated to outcomes that matter for patients or physicians. Dr. Woodcock also offered that the clinical and regulatory teams at both large and small companies sometimes delude themselves into believing that further development of certain drugs, or indications, can be supported by retrospective subsets from prior studies. In many cases the FDA sees these post hoc analyses leading to erroneous conclusions.”
Woodcock voiced particular frustration with the way the booming immuno-oncology field handles trials. Notes Porges: “For example, she suggested they have primarily been used as dictated by the protocols of the original trials, but wondered if these agents that affect the immune system would be better used with upfront or intermittent dosing. She also expressed concern that adequate biomarkers and the time to onset of response is poorly understood. Finally, she opined that it is unclear whether all of the PD-[L]1 agents are truly different or just various iterations of each other. However, the FDA does not have the ability to answer these questions, many of which could reduce the value of these assets, without the buy in from industry.”
Patient-reported outcomes are a major theme now at the FDA. Woodcock discussed a coming guidance on trial design around patient-focused clinical design work. “The FDA hopes to combine these endpoints with more robust natural history studies to “conduct better trials that are more feasible and will be studying outcomes that matter most to patients. And [the FDA] is going to accept that kind of endpoint”. Dr. Woodcock also suggested many trials are designed without input from the patient community, which has led to difficult enrollment or high dropout rates.”
The recent surge of new approvals at the FDA is not seen as a temporary phenomenon. Regulators are prepping for a future with even more new drug OKs each year, particularly as fields like gene therapy expand rapidly And that requires some rethinking of the process. First, CBER may well be underfunded if the growth trend plays out. And the agency is examining how it reviews new drug/device combinations, to make sure it’s handled in the most effective manner. “(T)he shift towards multimodal interventions, such as drug-device combos, may require a restructuring at the FDA to better review these complex applications that span expertise and insight in different branches or divisions of the Agency.”
The reorganization of the FDA’s Office on New Drugs — which has to be cleared by lawmakers — includes a new office for neurosciences. While trial failures appear to dominate in this field (my comment), the agency sees a lot of similarity in the field related to pathways, drugs and targets. And there’s plenty of more work coming: “The FDA has pushed for this new division due to a recognition that neuroscience is an ‘up and coming’ field where we will see ‘tremendous advances’.”
Single arm studies for rare and serious diseases, using a historical comparison, sometimes make a lot of sense — and sometimes don’t. A lot depends on what regulators and experts know about the natural history of the disease and the availability of a good biomarker to test the drug against. That can work particularly well in advanced cases of drug-resistant cancer, because the regulators understand the way the disease typically progresses. In ALS, she uses as an example, that doesn’t work so well, but patients are also satisfied with small effects, which the agency wants to keep in mind.
There’s a lot more in Porges’ assessment. He is thorough. (<--end of Endpoints article)
Sept will also bring either a govt shutdown and/or 1 or 2 year budget deal.
And the market news cycle/hyperbole that attends all that commotion once everybody's back from summer vacation mode.
BioB already posted this tie-up last fall and the board talked about it back then. What's old is new again.
Juvenile anchoveta are considered to be < 12cm.
When an area has a preponderance of anchoveta defined I believe as > 80% smaller than 12cm, IMARPE institutes a mini-ban or temporary closure. Yeah, fish swim around. Nobody puts babies in the corner. So, 10 days later you could have a different school or new entrants in that specific zone which change the size composition and it re-opens. IMARPE "fixes" a max amount of juveniles that can be landed both in weight and #. Plus, conceivably you could have tactical closures where one company has more landings or inventory and has their tenders go target the babies to force a mini-ban. Oops, price just went up...
Stocks:
North-Central Peru - managed by Peru
Southern Peru/Northern Chile - managed by both Peru & Chile
Central-South Chile - "managed" by Chile
Fishing Sector, Peru:
Artisanal - can fish within 5 miles of coast (and I'm pretty sure beyond)
Industrial - can come in as close as 5-10 miles out from shore
The industrial fleet was complaining this winter because the fish were closer to shore and heading south into Chilean waters. The industrial guys wanted to fish closer in and then the artisanal fishermen complained saying "stay further out!"
Peru is (proudly) further along than Chile in managing their fisheries stocks. It's sadly ironic then that the fish seem to be chasing colder water and that southern stock seems to be migrating more into Chilean coastal waters.
I think it would be rather interesting if Gwen gussied up a PR at some point in the next year to the effect that AMRN had formed a supply consortium with say even just 1-2 of the largest suppliers in both Peru and Chile. AMRN could open a small office in Panama City, staff it with 2 Panamanians (not a Peruvian or a Chilean because they are distrustful of one another so you need a non-threatening 3rd nationality reporting to NJ.) Give any current brokers enough money to quietly stay on the sidelines. JT to BP (since it works for either BO or GIA) - "guys, I'm just guaranteeing security of supply."
Remember, Apple did this last year to much media fanfare. Apple & cobalt miners
Here's a look at how crude oil yields can vary from week to week using Chile as an example - size of fish, spawning condition, regional variations, water temps, etc.
Thanks Slim - the BS margin call has been corrected now on mine. But, they still need to correct the AMRN cost basis.
---------------------
Peru is trying to push the price up on fishmeal & crude oil with this news-lite. (help cover for less volume to sell b/c of lower quota, by getting a better price on the fishmeal and fishoil). Efficiencies drop with lots of juvenile mini-bans (temporary stops) on fishing and cause delays for deliveries. As I reported before - oil yields solid even though first season quota was down from LY.
See below as reported by Intrafish:
Peru's top execs lower full year fishmeal expectations
The 'challenging, unusual' first season affected landings, yield efficiencies and super prime fishmeal production, top executives from Tasa, Diamante and Exalmar told IntraFish.
by Lola Navarro
July 3rd, 2019 22:52 GMT Updated July 4th, 2019 15:54 GMT
The first Peruvian anchovy fishing season has been challenging, with high levels of juveniles causing multiple stops in harvesting, limiting yield and hampering production of super-prime fishmeal, executives at the industry's top companies told IntraFish.
Though vessels have been able to land so far around 90 percent of the total allowable catch (TAC) of the first fishing season, which was set at 2.1 million metric tons, oceanic currents pushed anchovy to both the north and south of the North-central region. Catch volumes reached peaks of upwards of 40,000 metric tons a day, but high juvenile volumes forced the Instituto del Mar del Peru (Imarpe) to enact multiple "mini ban" stops on harvesting.
Fishing vessels are in the middle of a 10-day ban, and waiting to see if Imarpe gives the green light to resume fishing and land the remainder of the quota.
“Fishing was polarized during the season, which lowers efficiencies,” Pablo Trapunsky, CEO of Pesquera Diamante, told IntraFish.
“But most importantly, the high volumes of juvenile affected the quality of the product, because it is difficult to extract protein when the fish is small. If we cannot produce high levels of super prime, this could affect the average price of fishmeal quite significantly.”
According to industry players, anchovy sizes in the north of the North-central, near the border with Ecuadorian waters, were bigger and had a higher fat content, but the fish migrating to the south, the Callao-Pisco area, was very small.
“It was an unusual season, the fishing bans have lowered daily average catch volumes, and all these factors made fishing difficult,” Raul Briceno, CFO with Exalmar, told IntraFish.
After loss-making years of 2015, 2016, and 2017 – marked by one of the worst El Ninos in the history of the fishery – 2018 was a welcome turning point. The industry had hoped conditions would allow for a stable period.
However, the 2.1 million metric ton total allowable catch (TAC) was 36 percent lower than the first season quota for 2018, bringing down expectations for full-year results.
“The lower TAC of the first season affected companies’ projections from very early on,” Trapunsky said.
“Once you get a quota that’s lower than you planned on, you know that the year is not going to bring the expected results.”
Purchasing shifts
Although demand is consistent and prices have remained similar to levels of the pre-season orders, there have been shifts on the purchasing side, experts said.
In China, rains in the south-eastern region have delayed the strong aquaculture production period.
In addition, some inventories of super prime in the country from the previous seasons have led Chinese producers to order less super prime, and more standard and Thailand quality fishmeal, Louis Rens, commercial vice president with Tasa, told IntraFish.
“In any case, all that is produced in Peru gets sold, and we managed to sell 100 percent of our production before other fishmeal companies,” Reins said.
In terms of fish oil, companies are reporting good yields of between 3-4 percent.
“Historically speaking, this is a very traditional year for fish oil quality,” Trapunsky said.
At the time of publication, companies planned to resume fishing following the current 10-day mini ban started on June 28.
“We are getting ready to getting back to fishing, if Imarpe and Produce reopen the season we could land nearly 100 percent of the quota,” said Rens.
Intrafish - Peru to re-open & finish on last 13% of 1st season quota
STS - journal entry errors by E*trade. Right, nothing I did utilized margin. I'll have to call them again tomorrow. Their system didn't reconcile the corrections last night.
They have the cost basis completely screwed up, see below. I guess they wanted me to be an honorary sub-$5er for the holiday. I'm not! But, they still need to fix their postings for this one account.
Also, about sales reps. The first week of June I drove over for a Tableau after-lunch event on embedded analytics (if unfamiliar w/Tableau - it's like fancy, creative excel charting) and was curious about the # of new account reps they had (all hires from 6 months to 1 year prior). The following week Salesforce announced the acquisition. Here's a quick recap from yesterday on how the two sides negotiated a value when they couldn't reach agreement on lots of the detail, 6 months hard negotiating
Happy July 4th to everyone!
Inv 838/Kev That's awesome and maybe AMRN will! A lot of positive catalysts heading into late Sept, that's for sure.
Kev - Indeed and apparently even when I was NOT using margin for my AMRN trade yesterday (& have not, will not use margin).
E*trade apologized and are working to clean up the mess they made of my account. Good lesson to me - they do make mistakes, but it's on me to ensure they fix them. Crazy.