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You'd have to ask Biotechhedge he posted the excerpt and could tell you more about that drug Im sure.
That deal would make me ecstatic however I don't think its realistic. Thats would be quite a leap of faith for a drug who has nothing other than phase 1 under its belt. Dont' get me wrong I think things look good but that might be a little rich at this point. Now if the trial starts and we get a good result at the first interim results I think something like that deal you cited would be doable. I'd prefer to hold off partnering just a bit longer. Although I'd like to see a partner in the mid term
Ha HA I wouldn't want to go back through the S-3s either or even look at the K or Q back then to do the math, certainly not on a saturday. Whatever the number you are right there has been a significant increase in the amount of shares issued and outstanding since 2007. If I were to guess I'd say between 30 an 50 M sounds about right.
While there are more shares out there now there isn't anywhere close to 100 million more. There are only approximately 110 million shares issued and outstanding right now. The number did not go from 10 M to 110M since 2007 when they signed the agreement
Good point when they first signed the Merck Agreemend for Rida oh Defo or whatever they called it back then the stock went down. Could happen here although with all the coming catalysts I kinda doubt it.
Quite probably but not likely from this level. I would anticipate a run up going into the news and if we fail a retraction from that point. There was a significant run up of IMGN since feb and now with this "bad" news the retracement brings the stock back to that level.
What Im trying to say is I think ARIAD will be at a higher $ level by the time we get news on RIDA. If failure then definately a knee jerk reaction and a fall in stock price but I think it will be from a base in excess of where we are now. I don't see a sustained 35% reduction from here.
The operating margin of ARIAD included in that article is meaningless. I always laugh at those articles. They must be written by someone who has some filter out there and gets financial statistics without knowing anything about the qualitative reasons for them. In this instance due to the restructuring of the MERCK deal ariad was able to recognize revenue that had previously been deffered for accounting purposes (even though the cash had been received) and because there was no ongoing involvement of ARIAD in the RIDA development and thus the multiple elemement accounting rules were not longer applicable they were able to recognize the deferred revenue which made the operating margin seem astronomical.
how much lower do you think this thing goes. I would suspect that absent news we would have strong support at $3 as a floor in a market that continues downward. However, if the bottom falls out of the market in general I could see how going down to the mid to high mid 2s. Of course all of this discussion is moot if we have any positive event from RIDA or 534.
Interesting......
This market looks awful and I think people are correct when they speculate we could see continued down side in the macro environement but despite being too heavy into ARIAD already I will add to my position significantly if this thing dips below $3 in the near term.
Is that what you think happened yesterday some institutional investor decided to exit their position? Im just curious. The volume wasn't really that high.
If Succeed Succeeds my planned approach ( and this is of course dependent on where we go on price so I can't say it is what I will do for sure) would be to liquidate 25% of my position on the day of news (and likely price spike) then sell at the money puts (relatively short term probably about a 3 month term) then sell slightly (say 10-20% out) out of the money calls representing approximately 25% of my ARIAD portfolio ( with a short term likely 1 to 3 months) then re-evaluate.
Of course I only speculate doing this who knows what I will do given the facts and circumstances at the time.
Think it will hold through the day or retrace?
Anyone have a take on this early morning price action?
By that do you mean the event to trigger the final analysis will take place in Q4 or do you believe the event will take place the data will be analyzed and the determintion of or lack of statistical significance will be out to the public all within Q4?
Someone Correct me if Im wrong but I believe the thought is we should hear somethign about the 534 trial design etc in Q4 of 10 and we should expect the final interim analysis for RIDA in Q1 11. Other news such as a potential partner for 534 news etc is speculative as to the timing if any.
I see. Did you think there would be news out by august?
Just out of curiousity why are you buying ARIAD aug calls? Whats your strategy? I can see buying long term calls as a way to leverage your positions if you have expectation of positive events that will propel the stock price in the future. But short term call buying seems speculative given there is not certainty of any events in the near term as oppposed to if you bought a leap there is a great deal of certainty that we will have rida results before that expiration and probably news on 534 as well. You may have a strategy which is why I am honestly asking I just fail to understand it. I myself have been trading in options in ariad for about the last year however I've been the seller of puts. This way I keep the premium as the seller (as opposed to paying for the premium as the buyer). Selling puts is similar to buying calls in the sense that it is a bullish trade. However you pay for the option to transact and Im paid for it. Most of the puts I've sold have expired out of the money but the one time they were in teh money I effectively picked up more stock for less than I could have bought it at because I financed part of the transaction through the sale of the put.
I agree I think this will trend down too if the general market tanks (absent any ARIAD specific info.) I too am heavy ariad and would like to add more but given my current portfolio distribution its probably not the best Idea. If it drops to $3 I'll lightly add more and also sell some $3 september puts.
Im a CPA and I can say with a high degree of certainty that I woudl expect this to be converted to cash. The accounting rules often don't lead to accurate refelction of revenues (in my opinion mostly due to the accounting for multiple element arragements) earned by biotechs often causing deferred charges on the balance sheet when there exists no legal liability at all and thus its simply an accounting liability that will never result in an outflow of cash or the decrease in an asset. However, with the recognition of assets on the balance sheet they are quite clear. I would say Im 99% certain that this asset will result in the receipt of $18M of additional cash either directly or indirectly. Im just dumbfounded to understand what specifically it is for.
Interesting, well despite not knowing who the $18M is due from it would be my expectation that the receivable would be converted to cash in the near term given its classification and description in the balance sheet, which would give them $80M in cash less the $15M they need to maintain for the loan. Do you share this view?
I read their statements with regularity. The good news about the loan is despite being classified as current (due to the possibility of future covenant violations) scheduled payments are only $1M for the rest of the year and just over $4 Million over the next 18 months so it won't be a significant drain on cash. Additionally, the requirement to maintain $15M is true, however there are no restrictions on that cash other than it be maintained, as opposed to actually having restricted cash. Do you know who the $18M is due from on the balance sheet of the 6/30/2010 form 10-q? Its classified as "amounts due under license or collaboration agreements" From the disclosures it appeared to me that Merck paid the $50M plus the cost reimbursement from the modified license agreement. This asset is classified as current so its expected to be received within the next year. I assume it is from Merck but do you know what it is for?
Do you think its prudent to pursue this first indication without a partner then if the data is good partner and go for first line etc. Im sure if they could demonstrate success in this first trial it would substantially increase the value received when partnering. This wouldn't seem to be a bad plan to me.
Maybe if you would show less hostility in your posts people would react to them with less hostility. I think it should be obvious to most people that a secondary (for lack of better term) would be necessary if ARIAD is to go it alone on 534. The question is A) will they go alone and if so B) when would the timing of the secondary be. I think most people would be displeased with one now. 10,000,000 shares now nets them $30M which won't do enough to take things to the end game. Wait around awhile, get the trial started, get some RIDA results and the stock price could be much higher before ARIAD is out of cash. Personally I think the share price has significant upside. If the catalysts are positive and we see prices in the mid to high teens and ARIAD decides to issue 10,000,000 shares they would have my full support as I think it would be a prudent move to get 150,000,0000 give or take X given exact future share price. You may be correct in your speculation, after all we are all speculating. They may be looking to have a secondary now, but I don't see the logic in that, given that there is upward price movement in the stock, upcoming catalysts that could propel it further, and time left to be had. They have a built in safety net, i.e. partnering 534.
Just my thoughts. And by the way lets try to keep the tone of this board in check. Debate is great, but the tone of argument is counter productive.
The difference is you are being so vocal based on "feelings" and pushing them repeatedly. Don simply asked how you knew this. There is a difference
Your post is non sensical in terms of GAAP accounting or accounting for tax purposes. This is not meant as an attack but for clarity to anyone reading your post. All milestones will be booked as revenue for financial reporting for all RIDA milestones going forward as their is no ongoing involvement with respect to the development and thus no undelivered element that causes them to defer the recognition of revenue. As there are no direct costs to earning these milestones going forward those revenues directly impact earnings, i.e they are at 100% margin. Of course the company's combined finacial statements take into account all costs i.e. indirect costs or cost that are direct to other revneues. To the extent that revenues exceed costs they would be taxable. Companies don't pay income taxes on individual transactions (special circumstances no described in this email for simplicity purposes) they offset the transactions and pay income taxes to the extent they are profitable (tax planning strategies aside.) ARIAD has tax credits up the wazoo and won't be paying any taxes even if they are profitable for sometime.
Where are you seeing this. While I can see a significant open interest in calls and puts for ARIA august options I see virtually no activity today. The most significant activity I see today it what appears to be the closing out of 500 $2 January puts
Probably just taking off with the general market but time will tell.
Today was a great day, I hope we pause for a moment and close at $2.99 again tomorrow. I sold some $3 July puts a couple months ago and I would be just as happy if they get exercised tomorrow as I would be if they expire out of the money.
Don you might be right but I do believe if a takeover was initiated the board would do the right thing irrespective of Harvey's influence. They have a fiduciary responsibility and in today's day and age ignoring it can have too many legal implications. However Im the type of person who always believes people will do the right thing until Im proven wrong.
I agree with you. However, I think we can get to a share price higher than $15 per share but I don't think thats a sure thing. It is contingent upon positive events taking place. I also agree that $100 per share is not in the cards and not at all reasonable given our current fact set. That goes for the $65 poison pill price as well. I'd prefer to not be taken over and get to a share price somewhere in the 20s but if someone offered me $15 for my shares today before all the events are solidified I'd take it because a bird in hand is worth two in the bush or something like that :) The only thing I would disagree with you on is the calculation of market cap. Fully diluted at $100 per share the market cap would not be $130 billion. I haven't done the calc myself but something more along the line of $13 billion sounds about right. I think you added one too many zeros.
You are becoming increasingly negative. Do you think Rida is going to fail? There does seem to be quite a bit of potential catalysts for 2010 I think ignoring that or casting doubt on that is somewhat short sighted.
What does that mean in english.....
I never buy options anymore I only sell them. Looks like My ariad July $3 puts will get exercised this month ( or maybe not) I sold them around that market crash (in may ) when ariad was in the mid to high 3s, I never thought they'd get exercised. Probably a win win for me. I'll either keep the premium if they are not exercised, meaning ariad will close above 3 on July 16th or I will get some more ariad shares with a basis of 2.65. ($3 - my 35 cent premium) Either way works for me and is exactly why I sell options (specifically puts) in stocks I want to be invested in. I I've been burnt on buying calls. Options for me are kinda like gambling. I feel like the seller is the house (because they get the premium) and the buyer is the gambler. IN the end the house always comes out ahead.
Just my thoughts. Not sure given the unknown timing of the events if I'd be willing to pay the premium for calls but if you feel comfortable with the timing of events its certainly a way to leverage your investment.
ALL-
With respect to Fidelity I haven't tried to determine who is correct but I suspect its Biotech but who cares. Why are all of you spending so much time arguing about this. I think at this point you have agreed that collectively the related Fidelity parties didn't trip the poison pill (maybe you haven't but I thought you had reached that mutual agreement if not agree to disagree) So now its just a pissing contest of who's right. Who CARES! It doesn't matter. Someone be the bigger person and stop hitting reply and lets move on to a relevant topic.
Or you can continue to post weblinks to filings and use your calculators and make your calculations its your collective waste of time.
JB
Anyone have any thoughts on where this thing will bottom in the near term if no catalyst takes place. I would expect a continued downtrend through most of summer for the general markets and see no reason Ariad would buck the general market trend, unless of course we have some event that would cause us to do otherwise. I had thought that $3 would be our floor but its looking like that may not be the case. Just curious if anyone who has experience with any quantitative analysis has any more "scientific" thoughts.
What is the most advance other trial that rida is in right now. In other words if RIDA was to fail how long would we expect it to take for another PIII trial to be started with a different drug combo or for a different indication.
Hey thanks great to be here. Wow did the yahoo board go south quickly.
I like RIDA's chance for approval as well. Even if it fails its primary end point With all the trials its currently involved in and the massive amount of R&D being put into it by M I think some type of approval is in its future. Lets hope that its soon and that this P3 is successful.
Biotech hedge you are correct about one thing, RIDA is a gamble nothing in life is a sure thing. However your assertion that its a 50/50 gamble doesnt appear to be the "right" odds to me. I'd take those odds if you'd like to wager.