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But ISPH has been killed on significantly pulling in Azasite targets - I guess all you need is about $20 MM of royalties annually to amortize and pay interest. But that is a lot!
Jon
It's not just ZGEN and RPRX but RIGL, ARNA, MYGN, IDEV, ELN, SEPR, IDIX (way back when), MEDX, ALKS, ISIS, .......
Bad bad market for bios and yes that probably leads to a lot of selling.
Jon
Strange he attacked MNTA and NBIX since I have seen very few posts on the latter here and dozens on the former. I would only add that NBIX would also appear to have 2+ years of cash and is trading at/below cash levels from year-end but certainly below cash at the current date, but barely. I own MNTA and am short 2.50 puts on NBIX out in May.
Jon
MNTA
Strange action Friday to Monday. Despite the stock falling hard and being 2 cents below the strike, 60% of my short calls in one account and 98% in another were exercised by the holders. I ended up with exactly 20% of my original shares. And then the stock gapped back up. Weird action. I had effectively doubled my positioning late last week with some option strategies so not too too bad, but still.
Jon
Zip,
I think your statements are consistent but it does seem Tysabri has grown on you a bit with the time since re-launch and lack of safety signals to date. Is that a correct statement? Does the Rituxan safety situation concern you at all - if memory serves it has its own cancer/pseudo-PML issues?
Jon
Thanks for the info. It surely does seem that some funds are liquidating these days. Someone was pounding several of the midcap/small bios pretty hard late Friday - MNTA and ARNA come to mind first.
Jon
True in the short run; however, the auction-rate loans must be repaid at some point. If not enough new buyers step up to the plate in future auctions, the loans will eventually have to be repaid by selling portfolio bonds for whatever they will bring.
Still not an NAV issue as they must be marked to market in NAV anyway. Now the selling itself could drop NAVs of all the funds, but that hits both levered and unlevered funds. The impact will be greater on the levered funds of course.
Jon
OT MNTA
Orbimed is out at this point.
Jon
NO. Own several thousand shares and sold 7.50 calls against it. Saw the huge spike. Was too expensive to buy the calls back so I doubled the share count by buying more. Now I own twice as much!
Jon
Also take a look at PANC and a few other cash poor bios.
Jon
The auction rate issues are probably not a NAV issue but are instead a dividend issue. The liability amount will not change but the cost of the liability will move to the cap impacting dividend flows. Most closed ends seem to have a cap currently in the low 4% area. It does add some risk though as many of these trade to a yield level. I would further add that many municipalities are expected to term out the debt and hence LT yields may rise from here as supply hits. This move could further hit muni prices. I saw this coming a few days back, saw my one closed end fund not go down and did nothing. It then lost 7% on Thursday. Stupid me! Should have sold and SHORTED!
Jon
Let me respond in more detail than some others.
1. As Dew and others have already covered, not approvable was only way to go to communicate message of what was needed. I guess they could have done it verbally but approvable was not an option.
2. Stock has not risen from this letter. It was 13, opened in mid to high 7s on the news and then sold into the 4s over the next few weeks. So, it is DOWN from pre-letter days. Also this is one of three key projects going with one entering advanced mid-stage trials (but still a long way from trial completions with IIBs and IIIs yet to go, and with IIIs likely requiring fairly large size). The other, Copaxone generic, continues to advance per management but must be discounted due to lack of communication on how they will launch around the base compound and lack of knowledge of the process. Then there are 2 other partnered generics which we know nothing about as well as a platform with new twists for other FOBs. Plus cash.
Jon
It is now sub-7.50 much to my chagrin as I expected to deliver shares into a covered call I sold and now own twice as much!
Jon
I also cannot see how Amphastar can claim the damages as they have an unapprovable product at this time. I guess the damages should go to payors?
Jon
But what are the damages if no one else can even get approved?
Jon
IDEV
Most of the value in the franchise is on the testosterone replacement drug. PDUFA is mid-summer if memory is right.
Jon
Strange that no date was given for a decision. Also strange this happened coming off of the committee meeting. Lastly, the option buyers got screwed here (but they probably had to be stupid to have used Jan options anyway).
Jon
I wanted to re-post on the odds. In old times, it would be 95-5 for approval. I may have over-stated the complete response odds. Let's call it 80-20 and not 70-30. Upside probably to $9-10 with downside to $2-3. Next event in next 1-2 months which will be the oral long term data. Will be a bigger mover of stock, assuming approval.
Jon
70/30 it gets approval. If not, look out below. Not huge upside with approval as real money is in longer term chronic oral dosing and enough doubts have been raised over short term safety issues with the IV formulation. Good drug with reasonable market but not a homerun.
Go look at the 20s high in MNTA - it came the day of the patent ruling against SNY. The stock spiked to low 20s and then reversed down 30% in a few hours with shorts pounding it. It bottomed a few weeks later in the high single digits, recovered to mid teens and then collapsed to 4s. The shorts get it right more often than not given all of the hurdles to success in BP.
And one could have played ZGEN correctly. It would have involved shorting the calls and shorting the puts noticing the noise of the longs and the noise of the bears. I was ready to pull trigger, but fresh off monoline guarantor losses, I held back.
Jon
EXEL
Clear leak there.
Jon
Thanks! Have a good weekend although I am rooting against the Pats!
Jon
May have ph II data on 899 later in year?
Jon
Dew,
Did they say if they would have data on Ph II for 899 this year or will it run over into next year? Also, wonder what good mono data would mean to stock in February. Good luck! TIA.
Jon
Same thing happened to me! I had account liquidity issues because I restrict my riskiest trading to moderate sized accouts and generally do not put more money in to meet margin calls when option strategies go awry! I was going to sell IDIX in one account given the 0% margin for it but I did not want to pick up the phone - more hassle living over in Asia but just laziness really!
Jon
Looming depression? Just kidding (I hope).
Jon
We had to remodel our apartment in HK to the tune of $100,000 USD for the very reason you mentioned, efficient space use. We carved a study off excess space in the bedroom as my second child took my study. Apts in HK generally do not have closets so we had to build in wardrobes, etc. If we had only taken care of the space issue, it probably would have only cost $10-15,000. But we also had to re-do 30 year old pipes as well as our balcony and floors. I think a lot of space use is local contracting.
Jon
I want to chime in quickly to say that size of house also is partly a function of urban/suburban/rural mix. Obviously apartment dwellers will have less space than others. In NYC for example, 1000 sq ft will cost you $1.5-2 MM along with a $1-2K monthly maintenance/tax bill. For that same money, you can probably get a 4-5000 sq ft house in many non-coastal areas.
I live in HK, have 1750 sq ft and a family of 4 with 2 full-time helpers (standard here for helpers). It is a bit cramped but we have enough room (barely). I would find it absolutely impossible to move up in size without moving to less desirable area given pricing. Most 2000 sq ft places in higher end areas are $2.5+ MM with rents of $8-10+ K per month. The problem here is that the number of properties with more than 1,000 sq ft is very small and rich foreigners are scooping them up as the USD depreciates (and with it the HKD) and as interest rates here go down with US rates. Apt prices have gone up 15% over the last month and a half on HK island.
I would suggest this is what many Americans love about US - room to get more space at less cost.
Jon
Wow - you really do think they have a pretty good shot quickly. Hope you are right!
Jon
OT PS Do you have a housing view right now and are you looking at anything?
I happen to think the market is more skittish than you do and rkrw nailed what I was saying by the way. There will always be doubt out there about someone else - might be reduced if deal is such that Teva/Ampha transfers its/their rights for 10% share and agrees to stop efforts, or something to such effect.
Jon
As requested, my thoughts on your analysis.
A. Expected. They may try to speed things up though given what is going on in generic land. Does raise question of resources as generics were supposed to fund M118.
B. No go until mid 2009 earliest.
C. Agreed unless they do a deal on M118 involving shares.
D. Agreed.
E. Disagree - actually agree as I think odds are ONLY one in three.
Case 1 Odds 10% (price $35 as you will never know that TEVA/Ampha got denied so always will be a discount)
Case 2 Odds 5% (price $20)
Case 3 Odds 85% (price $6-10 depending on market)
Case 4 Oddx 0% this year although I guess something analogous could come out of meeting (at most 5%) - initial price drop back to $5 or so
This puts my target range in $10-13 area. I put such low odds on all outcomes other than status quo given the politics, the slow timing to date, etc.
Jon
What is number 1? And kudos - you seemed highly interested in MNTA much of year but waited for your price unlike many of us.
Jon
Efficacy
Could be reason behind the SHO list appearance as these shares may have been removed from one or more of the smaller brokerages. As effective float/tradeable shares declines, there are by definition fewer shares to borrow (assuming Efficacy does not loan out to the small brokerages).
Jon
Agreed. I think they probably burn the cash in 18 months - stupid. Nice early move here today. Wish it had held - still under water a bit. Wish I had averaged down - story of my life.
Jon
NBIX is trading near cash.
Jon
>Poor pinvestment over on Ivillage<
Couldn’t have happened to a nicer guy… Pinvestment is an egregious pumper of every stock he’s ever touched, IMO. >>
You have not seen his and my heated exchanges over lunesta I guess!
Jon
Do you sleep? Take an indiplon - wait you can't!
It really looks to me that FDA has it out for these guys. For this not to come up earlier, ouch! I lost my money on this a long way back. I had no exposure. Poor pinvestment over on Ivillage though.
Jon
NBIX
Many on Ivillage are apparently speculating the press conference is to announce PFE as a re-partner along with approval. Yeah.......right. I don't think so. I agree with Dew and you here.
Jon
Icahn truly maxed his opportunity out of the old TWA. I was a banker to them a long time back and while he did not break laws, he went to the edge into extreme gray zones.
Jon
NBIX hosting cc tomorrow morning at 9 with no press release on what the answer is - curiouser and curiouser.
Jon