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I want to puke every time I hear about Januvia becoming a multi-billion dollar blockbuster. The FDA gave Merk a gift when it hit NVS with an approvable letter while giving Merk the green light. I believe at last count Galvus has been approved in approximately 40 countries without running the additional trials that FDA requested.
Fortunately for NVS (but unfortunate for humanity as a whole)the American diet has spread to emerging markets and now China is seeing increasing diabetes rates. I guess this is an unfortunate side effect of the demographic tail wind we keep hearing about. Bottom line is NVS realized that Galvus could still be a blockbuster based on Europe and the rest of world. They decided not to fight the FDA when they were apparently picking favorites. I fear the FDA could do the same thing in the COPD market.
Sorry about the venting, Januvia vs. Galvus is a sore point with me.
FL
FL
I agree with the panic comment. 1st, the timing shows that the PR was released in an attempt to stem the sell off. 2nd, this appears no different than Teva's quick response to the m-enox on July 23, 2010 (i.e., that they anticipated approval for t-lovenox shortly). As previously discussed on this board, that PR was meant to create the inference that MNTA/Sandoz had not accomplished a difficult approval and that copaxone would require a much tougher approval. This was an attempt to undermine the competitions capabilities by indicating, big deal we will also have approval shortly.
Teva has also put out long term guidance which cannot be met without another 2-3 years dominance in the MS market. This looks much more fragile after yesterday. IMHO this does suggest that Teva is quick to roll out damage control PR's.
FL
Signed up and took a look at the Bedford Research report. Its about 8 pages long and contains technical analysis, various valuation metrics and a summary of management but nothing that screamed out to me the stock is a scam.
The Fool update their thouights based on recent financials. Nothing that really puts things into a new light.
I guess I'll need to accept that the conservative end of my portfolio NVS and XOM are offset by a stock so speculative it could make Worldcom look good.
http://www.fool.com/investing/international/2011/04/19/its-finally-time-to-buy-yongye.aspx
FL
Dew
While ABT has turned around lagging businesses (i.e., corrected problems with its diagnostics div) made a great acquisition from BASF to acquire rights to Humira) and made smart acquisitions to better position the company for vision care and genetics, I tend to think the spin off of Hospira was a mistake. What are your thoughts on this matter.
Regards
FL
The rationale part of me agrees 100%. If it is a legit company than why not go the IPO rout and have a investment banker bring it public. In that way their reputation is on the line to have vetted the company. The gambler says, the science seems to make sense, Motley Fool claims there is a real facility manufacturing the fluvic acid additive, the price has dropped so much it is worth a small speculation at a potentially huge market.
Thanks
FL
Correction - PE of 5 not 5%.
Thanks
FL
I've been looking for a good small cap way to invest this China improved diet food trend. I stumbled onto YONG which manufactures and fluvic acid soil and animal feed amendments for agriculture. Not knowing alot about these types of nutrients, I did some on-line research which appeared to support that fluvic acid is very beneficial to plants and animals. Funny that these additives are not marketed in this country.
Now the hard part is determining whether YONG is legitimate. Yong is a small cap Chinese reverse merger stock. Based on the Buisness Week article several months ago, I have steered clear of Reverse Merger Chinese Stocks, since it appears like the wild west. However, after watching the price get cut in half based on Seeking Alpha Articles packed with innuendo but little fact, I decided to establish a small position. KPMG has audited the annual reports and they have not noted anything unusual. Motley Fool claims that they have toured Yong's facilities, and they indicate that they are real.
Anyone out there have a good way of determing whether this company is real. There financial reports indicate that they are growing revenues at about 50% and have a PE of about 5%. However, with the fear of reverse merger stocks, Yong is getting pounded by the shorts.
Because it is so hard to determine what facts are real, I'm about ready to book a flight to China to do some on the ground research (i.e., look for their product at ag distributors, etc.). The science seems sound, the potential is huge but it could also be a fraud. Any other ideas of how the legitimacy can be determined?
FL
I don't necessarily believe that UBS had much if anything to do with the run today. Too often these guys look for any news announcement as an explanation.
The fact of the matter is that the NVS results are very easy to anticipate and they will be positive for MNTA. The daily volume is still low. If an institutional buyer wants to front run the announcement it is hard to put money to work without moving the needle significantly.
FL
For a company as large as teva, it is quite amazing the extent to which MNTA is influencing its share price.
FL
http://finance.yahoo.com/echarts?s=MNTA+Interactive#chart2:symbol=mnta;range=1y;compare=teva;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
At first glance they seem similar to the results from Gylenia. However, I believe that Marth made comments that Gylenia was not a good drug due to side effects. I thought he had alluded that Laquinimod would have a much cleaner SE profile. The elevated liver enzymes may be a problem when long term usage are considered. The fact these elevated enzyme levels were noted to be reversible suggest that they reversed when treatment with Laquinimod was suspended. Did any of the discontinuations occur as a result of abnormal enzyme levels?
In any case, Teva is under pressure to show that they have a blockbuster replacement for copaxone, so one has to take Marth's statements with a grain of salt (especially when they are made before clinical testing has been fully completed).
FL
I'm not referring to either of them having access to the double blinded results, rather I think they had enough in house testing/knowledge that they were likely to suspect that Lucentis might perform significantly better. I would suspect that lucentis was designed to overcome some of the issues that were identified in Avastin.
FL
Lucentis
Dew thanks for the follow up. I still think that Roche (and NVS for that matter)had an inkling of this outcome when they launched the DME Phase 3 trials.
FL
NVS keeps plugging away at trying to get into the HCV race.
I guess the space is too compelling despite the history of setbacks with IDIX and HGSI. Does anyone know whether the new drug class "cyclophilin inhibitor" has potential as a cocktail. The attached study looks like it was only evaluated in combination with the current SOC.
FL
http://www.novartis.com/newsroom/media-releases/en/2011/1502270.shtml
Seems like the other big lapse is that the article fails to recognize that reactor No. 3 is plutonium fueled and not uranium oxide.
FL
What if anything does this say about the likely outcome of the tials comparing Lucentis to Avastin.
I mean it seems like Roche is in a good position to know the positives and negatives of each drug, yet they chose to run expensive trials for the DME indication for Lucentis. Would Roche do this if they suspected that the trial outcome would show that Avastin would compare favorably to Lucentis?
FL
Would that entitle MNTA to the same split in the EU even if NVS was to bear the cost of clinical trials?
FL
If Sandoz did run trials to gain EU approval for generic copaxone would MNTA be entitled to anything from the EU sales as a collaborator. I thought part of the value of MNTA was the analytical tools they bring to the manufacturing process to verify the consistency of product.
Again more speculation, but if its not OK here then where?
FL
At this point it is all speculation. Mylan has publicly acknowledged that their version of copaxone is the same as an Indian knock off product currently on the market. They may know that it is unlikely to meet the high characterization bar that FDA has set for ANDA applications. As such, clinical testing could be the only hope of eventually winning approval.
Alternatively Sandoz could be the one running clinical trials. The EU requires them since there is no similar ANDA pathway in the EU. Just speculation at this point but I think we will know a lot more during the next few months.
FL
Based on CW presentation yesterday, I did not get the impression that that they were embarking on clinical trials or bioequivalence trials for that matter.
IMHO it is more likely that Mylan realizes that their ANDA will fall short of the mark and may be exploring the feasibility of launching clinical trials in anticipation of anticipated FDA issues. This is an unusual step for a generics company but may be necessary for one that wants to carve out a place in biogenerics but lacks the characterization skills of a MNTA.
FL
Yes
Got bounced to a replay at the start of the conference.
FL
Pollyvonwog
Thanks for the efforts to restore civility.
Seems like a lot of the TA discussion started to go downhill when analogies to MNTA's uptrend were related to Apple prior to the launch of the ipod. I can understand how, without some explanation, someone might infer that post was termed "dribble". My response to that is if one aspect of MNTA has been totally overlooked by Wall Street, it is the value of MNTA's intellectual property. How many posts on this and other boards seek solely to value MNTA on the basis of m-enox revenue or projected earnings with and without the Teva overhang. This appears to be the opposite of the late 90's when dot coms and some biotech valuations exploded without any earnings visibility.
To my knowledge, no other competitor has demonstrated the ability to reverse engineer a biologic and/or saccharide based drug to level necessary to meet FDA's recently developed ANDA requirements. From this standpoint MNTA's technology is unique making them an innovator in a manner similar to the way Apple innovated its way to a slew of products that launched its share price trajectory.
Tech analysis is widely accepted as a tool used by traders. From that standpoint a place should remain for it on this board. If a reader does not ascribe to its validity of TA, the option always exists to ignore these posts. I'd hope that we can avoid personal attacks. If we wanted to resort to that we could visit the Yahoo MB.
Thanks
FL
Tekor
Certainly TEVA is concerned by momentum shift. The price action on July 23, 2010 shows how vulnerable TEVA's franchise is to perceptions of MNTA having better technology. As Dew has indicated, some of this is likely a reaction to the #1 Generic drug Co. in the World being beat to the punch but more important to TEVA is the perception that MNTA possesses better capabilities in the reverse engineering of biologics and complex sugars. By claiming their own imminent approval of t-lovenox Teva is able to cast doubts on the uniqueness of MNTAs IP. This not only makes it easier to claim that copaxone is not vulnerable to a knock offs but might also make MNTA less attractive to major pharma as a follow on biologic partner.
Teva has been an expert at taking the momentum out of MNTA. The MNTA/Sandoz lawsuit is partially directed at restricting some of Teva's tools in this area. The fact that teva could spin the minor deficiency letter (bad news for them) to get MNTA to fall so far after TEVA had said in July that they expected approval of t-enx in a month is pretty amazing. That said I would bet that they cannot get indefinate mileage out of such statements.
I'd like to see your analogy of MNTA vs Apple play out (i.e., ramping to offer multiple products similar to Apple before the ipod). However, we are a long way from that at this point. In the mean time lets see how your short term prognostications play out.
Regards FL
Tekor
As I indicated, I like your analysis and the present fit to MNTA's short and long term uptrends. However, some of your postings make me think you are puting the cart in front of the horse. For instance:
___________________________________________________________
the approval of mEnoxaparin put MNTA's "potential" into an uptrend. With their "potential" in an uptrend the liklihood of mCopaxone approval is increased.
____________________________________________________________
In my mind this statement is similar to a superstitious baseball player that always eats scrambled eggs since he has been on a hitting streak since he started eating scrambled eggs. This works for him until it no longer works. You chose to start your 3-1-11 post TA in late 2007 since in retrospect you identified a trend that could be traced back that far. If you tried to apply it to early 2007 it no longer works. This is fine and it is how TA is performed. I believe it is a great tool but requires a cool intellect and flexibility to recognize when the trend is broken and the facts no longer line up.
I believe that m-copax approval is benefited by the technical re pore that MNTA has developed with FDA in successfully helping with the contaminated heparin crisis as well as completing the tenox approval process. This is likely to be reflected in your TA but IMHO the TA momentum should not not be confused with driving future events. This might be largely a semantics issue and ultimately the only thing that matters is whether the way you are applying these tools work for you.
That said I hope you will continue to post your analyses.
FL
Tekor
Thanks for spelling out your TA history with MNTA. I don't mean to speak for Dew, but I think his take was based on the fact that MNTA, like most biotech trading has tended to be very news driven. I respect your work and believe that at times technical analysis can provide a very useful indicator of market psychology. Similarly, options can also provide a good sentiment indicator. The problem with technical analysis is, that it works until it doesn't work anymore, and then enough data has to be reviewed until a new trend can be discerned.
I have to maintain that the technical analysis trends are independent of major news. As such,the TA trend has no bearing on copaxone approval by FDA etc. The inverse of course is not true.
That said, if TA works for you keep it up and feel free to share your observations. Hopefully, we are all intelligent enough to filter through the information and decide what facts or observations we want to use when making our investment decisions.
Regards
FL
I was glad that Shea called out the Teva's spin on the copax litigation schedule. Teva had to spin what they said would be a mid 2012 trial date to adjust for the scheduled Sept 2011 litigation date. The Teva press release earlier this week spins the trial date issue indicating that TEVA is anxious for the opportunity to defend their patents. This sounds alot better than "we are not going to be able to drag this out as long as we would like."
FL
I don't think the TEVA overhang extends back to 2005.Rather that was before Momenta had seriously demonstrated superior technology. The contaminated heparin and the ANDA application had not occurred so uncertainties about the technology existed without any TEVA overhang.
MNTA is presently getting no premium for intellectual property. In order to realize this premium they will need to show that they are more than a one trick m-enox pony. IMO validation will come in 2011 in the form of either copaxone or FOB partnership news.
FL
I believe the 2008 peak you discussed related to the filing of the m-enox application in Dec 2007 and FDA's acceptance of the ANDA application in July 2008, thus validating the pathway. The Tech analysis is interesting and a reasonable interpretation.
What amazes me is that TEVA was able to get continued traction at MNTAs expense with multiple claims or inferences that T-enox approval was right around the corner. I would have thought that after the July comments that approval would come within a month and the comment that approval would come by year end we would have seen TEVA experience a loss of credibility. I still think that their credibility will suffer at some point, however, I'm not sure how long it will take. I now believe that it will take a corroborating event(copaxone approval, major FOB partnership etc.) to shake these fears.
Thanks
FL
Thanks for the response Dew.
I don't claim to have any insights into Court determinations under HW. However, from what I have seen of the civil court system in general is that: they are very attuned to determining economic damages and that they are sensitive to the matter of standing. If Mnta/Sandoz was to clear the FDA approval hurdle, I think the court would view this as a change in standing and would be sensitive to the motions from NVS/Mnta for the need for immediacy of a determination. I don't think the court would be very tolerant of TEVA and possibly Mylan requesting delays. I don't know whether Mylan would claim that they need additional time, after all it would appear that their counsel would largely rely on the same arguments put forth by Mnta/Sandoz. So there might not need to be any reason for delay.
Has there ever been a HW patent determination case where the patent litigation was consolidated and then one of the plaintiffs received an approval from FDA? Was the court not receptive to the change in standing as a result of the approval? I'm not certain of precedents here but there would seem to be room for latitude from the court.
FL
I listened to the conf call while trying to get a report out. However, this statement by CW should have made more than a few Teva longs nervous.
" I will now discuss M356, our generic version of Teva’s Copaxone which we are developing in collaboration with Sandoz. The ANDA for this product was submitted in December 2007 and accepted for review in July 2008. So the FDA has been reviewing the ANDA for about two and a half years.
Recently the FDA indicated that ANDA reviews are averaging 26 months, so given the complexity of this review, the pace of the review while slower than we would like this consistent with their current timeline. Our ANDA is under after review of the agency and we are doing all we can to ensure it moves as quickly as possible.
We continue to believe that the information provided in our ANDA establishes equivalence between our product and Teva’s , we also strongly believe that the applications approval at a 505j. As a reminder Copaxone is a synthetic poly peptide mixture, so although it is chemically complex, a generic Copaxone will not have to face the sale supply chain issues inherent in our Enoxaparin program."
In short, the FDA could respond at any moment and the application should be free of the M-enox application "supply line" issues which resulted in considerable hang up with m-enox. Assuming that whatever comments that come out of the FDA review are in the form of a minor deficiency similar to what Teva received a few weeks ago for t-lovenox". As such, it is possible that MNTA and Sandoz could be holding a similar sword of Damocles over TEVA's head as they have done with the t-enox. That would be a nice vindication.
I don't know whether Sandoz would take a page out of the Teva playbook and launch at risk. This could depend on a number of factors (Markman Hearing feedback, litigation schedule etc.). Either way, I think FDA approval and the expiration of the HW 30 month stay would enable Sandoz to push for an much earlier trial date. Hypothetically speaking - would the court be less likely to entertain TEVAs numerous motions if an ANDA was approved? If discovery has been completed and Mylan has come up to speed could the case go forward in its present consolidated form on an expedited basis if an ANDA was approved? In the event of an approval or even a minor deficiency, it would seem that MNTA/Sandoz would have greater standing in the eyes of the court than Mylan. Could this result in the cases being disassociated if Mylan was not prepared to go forward?
I know there are a lot of postulating but it is not far fetched to believe that the court will be in a position where patent litigation remains the final hurdle.
FL
Another shot across big Pharma's bow.
In addition to patent expiration, generic competition, pricing pressures from governments implementing austerity programs, pipelines that are not churning out products like the bygone days, big pharma is also petrified of whistle blowers.
I realize this is not exactly new news, in fact I venture to say every major pharma has been stung by a government lawsuit based on insider whistle blower information. If there is one that has avoided the sting of a whistle blower then it ought to be a Biotech values quiz.
The recent trend is whistle blowers that turn in sales personnel for encouraging off label use. I guess there needs to be a demonstration that the company encouraged such tactics. Abbott's Depakote sales tactics appear to have crossed the line, at least in the Fed governments eyes. This has got to scare the hell out of Pharma given that they have recently gone through serious headcount reduction in their sales reps. If there is dirt out there don't be surprised if this prompts more whistle blower claims.
http://www.chicagotribune.com/business/ct-biz-0208-abbott--20110208,0,4718387.story
The Chinese are also known to be shrewd negotiators. Look at their history of locking up rare earth elements and natural resources. The fact that NVS could not secure 100% of this firm tells me that the Chinese wanted the opportunity to learn from this venture.
FL
Lets try that link again
Both NVS and the Chinese have been extremely quiet about this. I guess vaccines may be considered a matter of national security in China. My feeling is that the Chinese probably do not want to disclose the terms of the partnership. I'm sure NVS is offering a lot of technology in addition to the money in order to gain access to the Chinese market.
Any thoughts?
The first foreign investment in Chinese vaccine industry:
http://au.legalbusinessonline.com/deals/novartis-zhejiang-tianyuan-acquisition/2793
The relative timing of MNTA's downward slide is clearly tied to TEVA's press releases on T-enox. Both the big sell off in July-August and last weeks minor deficiency letter, have had a significant share price erosion effect.
What is amazing is that the same essential news by Teva can bring
MNTA down to its pre m-enox share price without damaging the credibility of Teva.
In July it was "any day"
In OCT it was by year end
In January it was "minor deficiency"
I wouldn't have thought to get more mileage from the same empty prognostications but they do.
FL
It is hard to get your arms around the currency issue since it is multifaceted. NVS is so geographically diverse, I'll bet less than 30% of its R&D and manufacturing costs are tied to the Swiss Franc. The switch a few years ago to reporting in US dollars provided only a brief tailwind. At some point it would seem like the curency issue would play to NVS favor as the global sales are converted over to weaker dollars. That assumes that at some point the $14 trillion in debt starts to weigh on the dollar.
Regards
FL
Menveo Vaccine approved for 2-10yr olds.
However, FDA issued a "Refuse to File Letter" for infant-2yr Olds. Sounds like a procedural issue since NVS indicated thay intend to resubmit within a couple of months.
FL
Let me see Pfe with shrinking Revs and R&D cuts at a PE of 9 or NVS with double digit rev growth and a 1.5% increase in R&D and a PE of 10. I'll take NVS but you can argue that they both are way undervalued. Both will benefit from the emerging market tailwind. NVS also benefits by being more diverse with better growth from Alcon, biogenerics and vaccines.
FL
Interesting biogeneric stat from the NVS call
NVS claimed on the call to have 50% of the existing biogeneric market by sales. Furthermore they stated that this market was growing at a 63% annualized rate. I assume that this includes m-enox.
FL
Unless I misinterpret the FDA guidance, the minor deficiency refers to the FDA's perceived time to review the deficiency's additional information. The guidance includes the following phrase
"Sterility assurance and/or microbiology issues that would likely take less than a full day to
review would generally fall into the minor amendment category. However, as stated
previously, the microbiology designation is determined by the chemistry review.:
If TEVA is experiencing issues with immunoginicity might it not be considered a minor deficiency according to the preceding statement. If Teva is capable of characterizing 100% of the junk in Lovenox then it is an easy or minor review for FDA. If Teva is not capable of characterizing everything, which has been the case to date, then the review goes on indefinately since the immunoginicity concerns remain.
This matter also goes to the heart of the MNTA lawsuit. Can TEVA answer the characterization question to demonstrate that there are no immunoginicity issues without violating MNTA's patents? This could play out over months or years. So it looks like it is possible that nothing has really changed (but MNTAs share price).
It looks like we are once again the victim of the Teva spin machine? If the deficiency was legitimately a minor issue, they would have provided more details on the specific nature of the deficiency.
FL
It may truly be minor but it is hard to judge whether there may be a patent infringement or other issue in it. Seems like if TEVA wanted to instill confidence they could post portions of the letter to and redact portions that need to remain confidential. Obviously it is to their advantage to remain obtuse, so I doubt whether they will provide many specifics.
FL
Question
Does minor deficiencies infer that the t-enox would be fully substitutable or is it possible for FDA to approve but not deem it to be fully substitutable for branded Lovenox?
FL