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Quiz - The software industry would be one possibility. A less obvious guess might be the extremely profitable porn industry - just a guess though.
Concerning EPIX - as I understand it, what appears to have happened is that the FDA had agreed to the Phase 3 trial design years ago, with enhanced MRA using Vasovist going against unenhanced MRA (which should have been an easy slam dunk). However, in the intervening years there's been a change in leadership/personnel at that division of the FDA, and now they've changed the rules and want a more stringent comparison. Another possibility is that the agency has an ax to grind with Epix or their partner Schering for some reason, or perhaps the FDA fears that the widespread use of enhanced MRA will help further bankrupt the Medicare system cost-wise. Either way, Epix is getting the shaft big time, and doctors and patients in the US will be denied a very useful new technology for no good reason. In addition to being a breakthrough diagnostic tool for vascular peripheral problems, Vasovist holds tremendous promise for early cancer detection (especially breast cancer) since it allows visualization of the vasculature surrounding early stage tumors.
Aiming, Concerning the calpain topic, one of my deepest fears would be that the 4 month delay in the 3 month animal tox studies might be due to toxic effects related to this calpain/spectrin phenomenon. However, a few weeks ago Neuro posted that he talked to Cortex, and it sounded like there wasn't anything to worry about - they apparently contracted out the 3 month animal tox studies, and the lab doing them has been slow, resulting in the delay.
The calpain phenomenon is a lingering gray area however, since there isn't much info available, and none of us Yahooers are really qualified to fully understand what info is available. In addition to being associated with the protein breakdown occuring after neurological trauma/damage/stress (as in stroke for example), calpain/spectrin elevation is also associated with Long Term Potentiation (LTP), which is the basis of normal memory formation - the process stimulated by Ampakines (as pointed out in Neuro's post and in the Lynch abstract). So the increase in calpain/spectrin activity from long term AMPA upregulation might not have anything to do with neural damage, but may merely be associated with the protein transformation / rebuilding which occurs during LTP.
The plot thickens however. The publication of the first calpain related paper last year created a stir on the Yahoo thread, prompting Neuro to contact Dr. Lynch and then post what he had learned (post 17204). Also, a YH poster (post 18096) said that he had asked Dr. Rogers about the calpain subject at the SHM, and apparently the author of that first paper had published it without first getting Dr. Lynch's OK, and Lynch and the author had a falling out as a result. Looking at the abstracts, Dr. Lynch seems to stress that elevation of calpain/spectrin is associated with normal LTP processes, while the other paper doesn't.
Anyway, things get even murkier, since we don't know definitively if the increase in calpain/spectrin activity is related to high or low impacts. The one calpian study uses CX-614 (a higher impact), but the abstract of the other study (Dr. Lynch's) indicates only that certain Ampakines increase calpain/spectrin activity, without specifying if they are high or low impact. Neuro's post after contacting Dr. Lynch indicates that the low impact CX-717 hadn't shown the deleterious effects one would expect from excessive calpian production. So the high impact CX-614 does significantly elevate calpain, while the low impact CX-717 doesn't.
Another abstract I found on glutamate toxicity / glutamate mediated cell death (implicated in many neurodegenerative diseases/injuries) outlines the process by which excess glutamte induces excitotoxicity, elevates calpain, thereby causing neuronal damage/apoptosis. We know that the high impact compounds developed so far generate varying degrees of excitotoxicity (calcium imbalance at the synapse), similar to the damaging glutamate toxicity seen after stroke. It's probably safe to say that a high impact compound that strongly induces excitotoxicity would very likely also induce calpain mediated neuronal damage eventually. The big question is whether this process might also occur after months/years of low impact dosing. Of course there hasn't been enough long term human data generated yet to answer this question. There has been some longer term dosing done in animals though, which may provide a clue. This would be a great question for the SHM.
Aiming, OT - Just in case you had any interest in Durect (the company providing the technology for Remoxy, and one of my recent stock picks for the long term), I found this article outlining some serious problems with the J+J Fentanyl patch (patients overdosing by placing too many patches too often). One of Durect's partnered programs is with Endo Pharma, for a smaller, longer acting Fentanyl patch (1/5 the size and lasting 7 days vrs 3 days). Of Durects's various programs, this is the 2nd most important to them (Remoxy is 3rd), so fallout from J+J's patch could possibly adversely affect Durect. I had a small position in Durect, but sold recently for other reasons (I figure it might continue consolidating lower after its big recent up move). Anyway, trouble with the J+J patch might also spell trouble for the Endo/Durect patch (the Durect version might present even more potential for misuse since it's smaller and more potent), so be extra wary if you're considering Durect. (That said, it'll probably double next week, since I sold my shares :o)
A Painkiller's Deadly Results
(Nov. 25) - There are new questions about whether the FDA has been too slow to take action on a pain-killing drug linked to more than 100 deaths and serious side effects.
CBS News correspondent Jerry Bowen reports the drug is Fentanyl, a powerful narcotic prescribed to millions of Americans.
It's the most popular pain patch on the market with four million prescriptions for Johnson & Johnson's Duragesic filled at pharmacies last year.
A patch that delivers Fentanyl – a narcotic many times more powerful than morphine to people suffering with chronic pain.
But the Los Angeles County Coroners Office reports a growing number of accidental over-doses by patients misusing the patch: 127 deaths over the last six years.
"They're not getting the relief that they want. Therefore they're slapping more patches on trying to get that instantaneous relief," says toxicologist Daniel Anderson. "What they don't realize is that most of these patches are to be applied over a three-day period."
Despite alerts from the L.A. County coroners lab as early as 2000, the FDA issued a health advisory just last July warning: "The directions for using the Fentanyl skin patch must be followed exactly to prevent death or other serious side effects from overdosing with Fentanyl."
Two Escapees Still On The Loose
Gang Leader Gets Clemency Hearing
Car Bombs Claim 10 Iraqi Civilians
A Painkiller's Deadly Results
Deadly Ride
It's a serious concern in Florida too where 115 deaths from Fentanyl poisoning were reported last year – most involving the patch.
Physicians say the problem is not the patch – but the patient – ignoring or not heeding warnings:
"When the physician first prescribes the patch to say, 'This isn't like candy, this isn't like one aspirin isn't working, I think I'll take a second one.' This is really potent medicine," says Dr. Lonnie Zeltzer, a pain management specialist
The patch underscores a broader issue regarding drug safety – the fact that neither the FDA nor the drug companies have a thorough system for monitoring the effects of a new medicine after it comes to market.
In this case, it's a deadly effect for patients who take far too much of a good thing in a desperate effort to ease their pain.
Copyright 2005, CBS Broadcasting Inc. All Rights Reserved.
One scenario that keep buzzing through my mind is that Cortex will start on a gradual ascent with each successive Phase 2a result, and then tumble when the BP deal is announced in the Spring, when the reality of what the post-deal landscape looks like for Cortex. Let's say that we get $35 mil in upfronts, but give up the backup compound CX-701, and lose access to the Sleep related orphan indications like Narcolepsy. That's a fairly realistic scenario, and it leaves Cortex in the following situation -
1) Low impacts - We're back at square one again, having to go through tox and Phase 1 all over (1 year delay).
2) High impacts - This is still an unproven approach safety-wise, and will take quite a while to get into Phase 1. There's a chance that a BP will want access to Cortex's lead high impact as part of the BP deal, though this would raise the price tag of the deal.
3) Orphan indications - Without Narcolepsy/Sleep related, it's slim pickins as far as orphans go. There's Fragile-X (probably needs a higher impact however), and memory loss post-ECT (a low impact would be fine here, but I wonder how attractive this is as an indication).
So anyway, the post-BP deal landscape doesn't look all that appealing as I see it. What we really need is to be able to carve out Narcolepsy/Sleep for ourselves, but as Neuro has said, that's very unlikely to happen with a large BP partner. Perhaps a mid-tier partner whose interested primarily in ADHD might allow it, who knows. Likewise, a large BP will probably want to take CX-701 as their own backup, while a mid-tier partner might not (?) Anyway, I'm gravitating toward thinking that a large BP may not be the ideal partner if it means losing Narcolepsy/Sleep and CX-701. Also, a mid-tier partner might be faster to move through clinical trials than a big lumbering BP.
Those still enamored with the idea of a government run healthcare system should read that article.
Aiming, Today's drop in PTIE underscores the wisdom of diversification within the bio sector. PTIE was down nearly 20%, but my 22 stock basket was down less than 1%. Of course the inverse would apply if there was a massive upside move in one particular stock (the benefit being watered down by diversification). However, from my experience with large concentrated positions, as soon as the stock starts to move up, the tendency is to start selling too early to avoid losing the sizable profit, and often this results in missing the bulk of the ensuing up move anyway. In the past for example, if I had 30,000 shares of Cortex bought at 2.05, I would nervously start selling around 2.20, and completely miss the move to the 2.50 to 3.00 range. I've done this several times. With smaller diversified positions, I can sit tight and capture the whole move, thereby making nearly as much as I would have with a massive position sold too early, and taking far less risk.
So far, the only way I've found to tame the emotional aspects of investing is through diversification. It also seems to have cured another bad habit - averaging down in a losing stock (the "throwing good money after bad" syndrome). Sometimes doubling down could turn out to be successful (with luck), but in doing so you are overloading your portfolio in a losing position - not a great habit to get into when viewed objectively. Today I was first tempted to buy more PTIE after the drop, but with Myriad and several other new stocks on my want list, I bought them instead, and just held my core 500 shares of PTIE for the longer term.
Anyway, in some ways it seems like how you invest is at least as important as what stocks one selects. Diversification provides the discipline, and helps ease the emotional roller coaster of this volatile sector.
BTW, I still like PTIE. I've always figured that one approval out of the 3 indications would be enough to make PTIE a successful company/investment. I see Remoxy as "in the bag", relatively speaking, and PTIE will soon have over $200 mil in cash. Oxytrex will need another, better designed, Phase 3. There is reason to be hopeful for Oxytrex - in the Conf call, they said that in patients over 50, Oxytrex had 75% fewer side effects than did Oxycodone (validating the similar excellent results from the first Phase 3). The mistake they made was in allowing younger patients into the trial (25-40 year olds) who most likely didn't have really severe osteoarthitis to start with, at least not severe enough for them to put up with opioid type side effects for very long. Barbier theorized that with Vioxx in trouble over the past year, many of the patients enrolled were formerly on Vioxx and figured they would give opioids a try. But they were insufficiently motivated to endure the side effects (remember the Servier CX-516 MCI trial).
Another positive to take away from the trial was that overall, the Oxytrex group did show 28% less physical dependence than did Oxycodone (though not statistically significant due to the reduced number of subjects). Still another positive was that Oxytrex showed somewhat better efficacy than Oxycodone (again not stat sig, but more than enough to satisfy the secondary non-inferiority endpoint). In fact, Oxytrex did show stat significantly better efficacy than placebo, while Oxycodone did not. With a better trial design, using only older over-50 patients, there's a good chance to see a successful result. Anyway, I plan to hold at least most of my core PTIE position. At the very least, Remoxy looks like a winner (that said, King might conceivably decide to try to renegotiate lower terms in the Remoxy deal, which is something King has apparently done in a past partnership deal. So that's something to watch out for).
Aiming, I added another name to my list - Myriad Genetics (MYGN). This looks like a very interesting company. They have a core "predictive medicine"/genetic testing business producing $100 mil/year in revenues and growing fast (predicting the success of various drug treatments based on genetics). They also have a promising drug pipeline, with Flurizan for AD (see below) and prostate cancer. Also some interesting earlier stage programs, and 12 strategic alliances with large pharmas. After a recent stock offering, they have approx $250 mil in cash, no debt, and the above mentioned $100 mil in revenues/year (which grew approx 50% over last year), all for a market cap around $700 mil or so adjusted for the recent 7 mil share offering. Here are some of their recent Flurizan AD results, which if replicated in the current Phase 3 could make it a blockbuster -
>>> Myriad Genetics' Follow-on Study of Flurizan Demonstrates Cognitive Improvement in Alzheimer's Disease
Tuesday November 15, 7:15 am ET
Flurizan Reverses Disease Course and Improves Cognitive Function in Follow-on
SALT LAKE CITY, Nov. 15 /PRNewswire-FirstCall/ -- Myriad Genetics, Inc. (Nasdaq: MYGN - News; www.myriad.com) announced today that an analysis of data from its Phase 2 follow-on study of Flurizan(TM) in patients with mild Alzheimer's disease showed that study participants improved as a group, regaining cognitive ability from months 12 through 18. Results of the 6-month follow-on study were presented today at the Neuroscience 2005 meeting in Washington, D.C., by Sandra E. Black, M.D., Professor of Neurology at the University of Toronto and lead investigator in Canada for the Phase 2 trial of Flurizan in patients with Alzheimer's disease.
The Phase 2 trial of Flurizan monitored patients with Alzheimer's disease for a period of 12 months. At the end of the 12-month period, the group of mild patients taking 800 mg twice daily showed an average decline from their baseline score at enrollment of 2.64 points on the Alzheimer's Disease Assessment Scale -- Cognitive Function Subscale (ADAS-cog). In contrast, the placebo group experienced a 3.78 point decline over the same 12 months. In the follow-on to the Phase 2, patients on Flurizan for three additional months regained 0.38 points to 2.27, an improvement of 14 percent, and by 18 months the average ADAS-cog score had further improved to 1.78 points, a total gain in cognition of 0.86 points. These data demonstrate an increase in cognition upon continued treatment that amounted to a 33% improvement over the follow-on period.
"The 18-month follow-on data are striking in that Flurizan-treated patients appear to be regaining cognitive functions like memory and thinking ability that they had previously lost to the disease," said Daniel Christensen, M.D., Clinical Professor of Neurology, Psychiatry and Pharmacology at the University of Utah. "This is a truly exciting finding in the development of a potential future treatment of Alzheimer's disease."
During months zero to 12, mild patients in the 800 mg BID dose group declined by a total of 1.27 points on the test that is considered a global measure of Alzheimer's disease, Clinical Dementia Rating -- Sum of Boxes (CDR-sb), for an average decline of 0.11 points per month. This compares with patients on placebo who declined 2.09 points during this 12-month period, or 0.17 points per month. Over the six-month follow-on period, patients declined 0.05 point per month, or 0.29 points in total. These data indicated an improvement in the rate of decline during the follow-on period to less than half the rate of decline in months 0 to 12. These same patients declined in the follow-on at a rate that was less than one third of the rate seen in the placebo group during the first 12 months.
Tested with the functional measure of Alzheimer's disease, ADCS-ADL (Alzheimer's Disease Cooperative Study -- Activities of Daily Living), mild patients in the 800 mg BID group demonstrated a 5.4 point decline over 12 months, for a rate of 0.45 points per month. The placebo group declined 8.09 points during the same period, for a rate of 0.67 points per month. During months 12 through 18, the rate of decline in ADCS-ADL among patients on 800 mg twice-daily Flurizan continued at 0.47 points per month, a similarly reduced rate as seen in the first 12 months.
"The follow-on data are very encouraging to our clinical development program with Flurizan in mild Alzheimer's disease," said Adrian Hobden, Ph.D., President of Myriad Pharmaceuticals, Inc. "This result is consistent with the compound's mechanism of action. We look forward to completing enrollment in the Phase 3 trial in order to confirm the efficacy of Flurizan in a larger patient population."
About the Phase 2 Follow-on Study of Flurizan
After completion of Myriad's 12-month Phase 2 trial of Flurizan, study participants in Canada were given the option to continue in a follow-on study. A total of 81% of those participants opted to join the follow-on study. Those participants who had previously received placebo during the Phase 2 trial were randomized into the 400 mg BID group or the 800 mg BID group. Participants who were taking Flurizan in the initial Phase 2 trial continued on the same dose that they had been receiving. However, neither patients and their caregivers, nor their doctors, know which arm of the study the patients are in.
About Myriad's Phase 3 Trial of Flurizan in Alzheimer's Disease
Based on the positive Phase 2 results, Myriad is enrolling patients with mild Alzheimer's disease for a Phase 3 trial, at 130 centers across the United States. This enrollment is proceeding on schedule. The Phase 3 trial is a double blind, placebo-controlled trial. Patients will be randomized into one of two treatment arms, receiving either 800 mg of Flurizan or placebo twice daily for the duration of the 12-month trial period. The study is designed to determine Flurizan's ability to reduce the rate of cognitive decline and activities of daily living in patients with mild Alzheimer's disease, as measured by the ADAS-cog test and the change in ADCS-ADL, respectively. Information on participation is available by calling (888) 459-4888 or emailing mjackson@myriad.com .
About Flurizan
Flurizan is the first in a new class of drug candidates known as Selective Amyloid beta-42 Lowering Agents (SALAs). Flurizan lowered levels of Abeta42 in cellular assays and animal models. Abeta42 is the primary constituent of senile plaque that accumulates in the brain of patients with Alzheimer's disease. It is thought to be the key initiator of Alzheimer's disease, since Abeta42 has the greatest tendency to aggregate, cause neuronal damage and initiate amyloid deposits in the brain. Most genetic mutations that cause early-onset Alzheimer's disease appear to do so by increasing production of Abeta42. Myriad believes that Flurizan is the first well-tolerated drug candidate that inhibits the production of Abeta42 to be evaluated in a clinical trial for the treatment of Alzheimer's disease.
About Myriad
Myriad Genetics, Inc. is a biopharmaceutical company focused on the development and marketing of novel healthcare products. The Company develops and markets predictive medicine products, and is developing and intends to market therapeutic products. Myriad's news and other information are available on the Company's Web site at www.myriad.com.
Flurizan is a trademark of Myriad Genetics, Inc. in the United States and other countries. <<<<<
Aiming, I think Daviddal's speculation that a 3-way mega deal is responsible for the TURNS trial delay is perhaps some wishful thinking on his part. The real reason for the delay probably has to do with continued wrangling between Organon and TURNS/NIMH over who controls the database, as was outlined in that Wall Street Journal article.
Abksmin's idea seems to be that there could be a mega deal cooking, but it will be a long drawn out process since the BP will naturally want to advance only the best compound - CX-717, instead of Org-24448 (drawn out since Cortex owns CX-717, while Organon owns the Schizo/Depression indication rights).
Before talking about 3 or 4-way "mega deals" however, we first need to see the Phase 2a data, since these results will demonstrate just what we have with CX-717, and are the key prerequisite for any BP deal, regular or mega. The way I see it, there's a very high probability that the results will be on the positive side, the question being just HOW positive (ambiguous, decent, good, really good, phenomenal, etc)? If ADHD kicks butt (which is quite possible considering the high dose is 800 mg BID), then Cortex may get an acceptable offer right away from a BP with a special interest in ADHD. Stoll would then have to decide whether to accept that offer or wait a month or two for the AD and/or Shift Work results in hopes of an even better offer from a BP interested in those indications. However, if ADHD bombs out because the trial design was flawed (for example the 800 mg BID causes a ton of dropouts, and 200 mg BID is too low to show effect), then we'll have to rely only on the AD and Shift Work data to attract a BP partner. So everything depends on how strong the data is for each indication - that will ultimately determine the extent of BP interest.
The good thing is that we'll start getting this data soon, in January (ADHD), and it's going to be fun to watch this unfold (also somewhat nerve wracking). Clear activity in ADHD, and this stock could really start moving. Longs and shorts will be taking their positions in the days and weeks leading up to the results, so the YH board should get lively. As thinly traded as Cortex is, a relatively small number of individuals or a hedge fund or two could temporarily manipulate the price downward right before the results (we've seen this type of activity before). I'll be keeping at least some dry powder available for such a scenario.
Aiming, Well, I added one additional name, MedImmune, which looks like a solid pick for the longer term. I took a half position in Durect, figuring it might consolidate a bit more after its recent move up. Anyway, at the risk of being redundant, here's my updated list of 21 stocks for the longer term (which is actually starting to look more like a mutual fund. Actually there's an absence of bio mutual funds out there that specialize in small + mid caps. I think John Hancock has one but it has a 5% load as I recall) -
Abgenix
Atherogenics
Biomarin
Celgene
Cortex
Cubist
Discovery Labs
Durect
Exelixis
Genzyme
Gilead
Idenix
Kos Pharma
Medarex
MedImmune
MGI Pharma
Protein Design Labs
Pain Therapeutics
Synomyx
Teva
Vertex
I'm still evaluating some others, so will keep you posted. This is fun...
Aiming, Looking more closely, it looks like Duragesic went generic earlier this year, so I guess the $2 Bil projections will have to be downsized a bit..
I'm finding that having smaller positions spread across a basket of stocks is the only way I can "stay the course". Looking at the many variables involved in picking bio stocks (the esoteric science, the risks of clinical failure, one's own lack of knowledge, faulty judgement, bad timing, etc), I figure I better spread the money around. Today for example, my Gilead position was up 7.5%, which helped counterbalance 3 other stocks which were each down 2.5%. This sector is so volatile that a diversified approach is the only way I can remain invested. The other factor is that I keep finding more good companies to buy.
That said, I'm still tempted to go nuts and try for the big score - betting it all on one big winner. The only stock I know well enough to place a huge bet on is Cortex, and the time may soon be approaching to do just that. I lost a lot in the 2000-2002 bear market, and a big score would really help (I bet big in early 2003 in the Rydex Velocity Fund (2 x Nasdaq) and did very well, but I'm still way in the hole). Anyway, I'm very confident in the upcoming CX-717 results, so it's tempting to bet the whole bundle and either get rich or end up a dumpster dude. But with my luck however, CX-717 will suddenly show massive toxicity, and it'll be the dumpster for me.
Here's the full text version of the Deadwyler sleep deprivation primate paper -
http://biology.plosjournals.org/perlserv/?request=get-document&doi=10.1371/journal.pbio.0030299
Concerning Durect again, I should have added that they'll have approx $90 mil in cash at year end (having wisely used their recent runup to raise some additional money). Also, concerning their Sufentanil transdermal patch product, it is 1/5th the size of Duragesic (important since these patches tend to irritate the skin, and a new site is needed for each new patch (cancer patients and patients with long term pain often use these patches for months on end). Even more importantly, Durect's Sufentanil lasts for 7 days vrs only 3 days for Duragesic. It's amazing that investors assume they need a company with a new cancer drug to have a blockbuster, when something like Duragesic sells over $2 Bil/year.
Aiming, FWIW, I added 2 more names to my list of stocks for the longer term (now up to 20). In addition to Durect, I also added Medarex (a no brainer for the longer term).
BTW, concerning Durect, I see that in the Sufentanil program with Endo Pharma, Durect gets a big 30-40% royalty on US/Canada sales, and Durect retains the full rights to the rest of the world. Sufentanil is targeting the $2.2 Bil Duragesic market (J+J), where J+J gets approx $1.4 Bil in the US/Canada, and a surprisingly huge $800 mil/year outside the US! So bottom line, Durect will have numerous huge revenue sources - 1) their in-house long acting Bupivicaine program (Bil+), 2) the partnered Sufentanil program (Bil/year potential also), and 3) the Remoxy and other PTIE/King program royalties, and those from the Voyager AD program. And long-acting Bupivicaine, Sufentanil, and Remoxy are all programs that are extremely likely to be approved and strongly accepted by physicians. I really like Durect, and their management seems very sharp.
Aiming, The full term Lilly uses is "AMPA Receptor Potentiator" or ARP, which might produce slightly different results on the search engine.
BTW, I was digging further into Durect (DRRX), the company providing the technology for Remoxy. They look interesting, though they had a big runup recently, followed by a stock offering which brought the stock back down a bit. I'm not in a hurry to buy them just yet, since they may continue to consolidate for a while, but they do look interesting. They have several other licensing deals similar to the one with PTIE, which yield them milestones and eventual royalties. Their own in-house program is the most potentially lucrative though - an ultra long acting anesthetic for post-surgical pain management. The market for such a product is surprisingly huge, estimated at approx $1.8 Bil/year (assuming 25 mil annual post-surgery procedures, a 30% market penetration, and a price of $250). The Durect version of Bupivicaine provides continuous post-op pain relief for 2-3 DAYS, thereby drastically reducing the need for opioid pain meds (thus avoiding their side effects), and reducing hospital stays considerably (thus saving hospitals/insurers many thousands of dollars). Physicians get fewer post-op phone calls since there's little/no post-op pain. Nausea and vomiting from opioids is greatly reduced. This looks like a clear winner all around, and a very high reward/low risk program. The Phase 3 should be starting soon, and this product is owned completely by Durect and could be a blockbuster ($1.8 Bil/year potential, all owned by Durect, and even a fraction of that would be make Durect a great investment).
Durect also has various licensing deals for products utilizing some of their other novel drug delivery technologies, not only to PTIE for Remoxy (whose deal with King Pharma should generate several more abuse-resistant programs using Durect's technology), but to others like Endo Pharma (a 7 day transdermal Sufentanil patch which is 1/5 the size of existing Fentanyl patches - these are commonly used by oncologists and pain specialists). Also a deal with Voyager for an implantable AD drug (in Phase 3). Anyway, Durect looks like a company to keep an eye on. I'll be watching for a suitable entry point to take a modest position (alas, all my positions are "modest").
Dew, So I take it your Teva profits won't be going into COR? Just don't bet it all on the goats :o)
You mentioned Kos a while back - I only have a modest position, but it seems amazing that a company with 2005 estimated revenues of $735 mil, with $320 mil in cash (and growing internally by $61 mil in Q3, and $141 mil in the last 3 quarters), and overall revenue growth of around 50%, could still have a market cap under $3 Bil. Kos settled with Barr Labs last Spring, which reportedly will prevent generic competition for Niaspan and Advicor until 2013 (after which Barr will have to pay royalties to Kos). Kos also has Azmacort, plus several approved blood pressure meds recently acquired from Biovail (Cardizem, Teventen). With free cashflow of several hundred million/year and growing, Kos should be able to continue funding its growth year after year.
Dew, Any hints on where you're putting your Teva profits? Thanks.
Quiz - I'd guess either Koch or Cargill, depending on which is growing faster, probably Koch. Actually, the most profitable private corporation in the world by far is the US Federal Reserve System. I remember 10-15 years ago on Wall St Week, Louis Rukeyser said that the privately owned Fed had profits of $30 billion that year (representing the biggest ripoff in history, but that's another story). The profits are distributed to the many member banks.
Dew, >>When all is said and done, I wonder if a single-payer government plan wouldn’t have been more cost-effective<<
When has government ever been "cost effective"?
Dew, Concerning Imclone, just wondering about the rationale for a possible buyout? I see they're heavily dependent on Erbitux, with most of their efforts going toward expanding its indications. Otherwise the pipeline looks thin/early stage. They have a lot of cash (over 750 mil), and no debt, so with the Erbitux franchise facing significant competition soon, wouldn't it seem logical for them to diversify by acquiring some late stage programs? Perhaps getting a new CEO is part of an overall strategy to achieve that, rather than the idea that Lynch was an obstacle to a buyout. Just curious what evidence there is that the board may want to sell out rather than continue on building the company? Thanks Dew.
Thanks Midas, eom.
Midas, I'd be very interested in your current stock list if you would be willing to share it. I too am always on the lookout for the next potential "gem", and would greatly appreciate some new ideas.
Here's my current list of 18 stocks for the longer term -
Abgenix
Atherogenics
Biomarin
Celgene
Cortex
Cubist
Discovery Labs
Exelixis
Genzyme
Gilead
Idenix
Kos Pharma
MGI Pharma
Protein Design Labs
Pain Therapeutics
Senomyx
Teva
Vertex
Durect (DRRX) is a new one I've been looking at recently (the company providing the technology for Remoxy).
Comments on my list (pro and con) greatly appreciated!
Aiming, I didn't make much with only 250 shares, but I guess it's better than my usual losses. I think I've finally found a way to make money in this sector though, with my roughly equally weighted basket of 18 bio stocks, which allows me to - 1) stay the course/sleep at night, 2) neutralize the effects of the inevitable individual stock blowups, 3) participate in broad market moves, and 4) hopefully benefit from good stock picking (only time will tell about that last point however :o)
Something tells me we might have a broad market rally over the next several months, so I figure I'll try to participate in that and then jump into Cortex big afterward. The timelines for Cortex keep getting drawn out, and one of the worst feelings in the world is sitting with a dud while the entire market is rallying. But it is very tough not to buy when COR dips into the $2.05 range. When I buy big at $2.05 though will be the time it finally decides to plunge to $1.50 - that much you can bank on :o)
Dew, Any idea as to how much of a premium Imclone would fetch in a buyout scenario? Thanks.
Aiming, Concerning PTIE, disregard what I said in that last post about the possible need for a Phase 2 on a new Remoxy formulation. Some of the articles today confirmed that they're going into the 2nd Phase 3 in January, and plan to file for approval in '07. (I still need to listen to the Conf call). But it looks like we can lay the formulation question to rest once and for all (and King wouldn't have done the deal if the formulation was severely screwed up). The King deal includes not only Remoxy but potentially some other abuse-resistant opioids, so the reference to Phase 2 in the press release refers to any newer compounds (with PTIE bringing them through Phase 2, and King taking over for Phase 3).
The other thing that was bothering me was the seemingly low royalty rate (15% on the first Bil in sales and 20% thereafter). Rstor1 over on the other thread pointed out however that King will pay for the marketing and manufacturing costs (plus the royalty due Durect), so the deal is really closer to a 50/50 split when you get to the bottom line.
I still haven't gotten any answers on the Oxytrex endpoint question (the change from superiority in pain relief to reduced dependence/tolerance), and whether the FDA has approved this change. But I figure Barbier must have consulted with the FDA to get the endpoint changed, and so must have at least a verbal OK from them (I guess).
Anyway, bottom line, after selling my meager 250 shares at $9.10 this morning, I reloaded with 500 shares in the afternoon at $8.42, which for me represents a full long term position (since I now own 17 other stocks, I have them spread out pretty thin :o) King shareholders apparently think they overpaid for Remoxy, and their share price dropped today. One article said they felt they paid $150 mil too much (the total deal was for up to $400 mil). Their loss is our gain :o)
I figure with this deal in place, most of the long term risk is out of the stock, and it's still VERY cheap considering the blockbuster potential of Remoxy. There's still some short term risk with the Oxytrex and PTI-901 data coming out soon, but with Remoxy cruising toward approval, the fallout from an Oxytrex or PTI-901 failure next month will be muted. The upside from an Oxytrex or PTI-901 success is gigantic however, so you have to like the risk/reward here.
With the recent news on P-mab, I feel the same about Abgenix, so I've just added them to my portfolio of stocks for the longer term (now up to 18 stocks).
Rstor1, Yes, figuring that PTIE won't have to pay for manufacturing, marketing, and royalties to Durect, and the deal looks a lot better. Thanks for the input!
Rstor1, The King deal has nothing to do with Oxytrex. My question was whether the Oxytrex endpoint change has been given the OK by the FDA? The October press release only said that the change was submitted, and said nothing about whether the FDA has agreed to base their approval on the new lowered endpoints.
Concerning Remoxy, in your previous post you said that the combination of the 15-20% royalty plus having King pay the Durect royalty would equate to PTIE and King effectively splitting the revenues from Remoxy. But even with King paying the Durect royalty, the split is still very onesided - approx 25/75.
The $150 mil in upfronts was great, but I don't like PTIE giving away 75% of future revenues from a blockbuster like Remoxy. Remoxy can be a Bil+ drug, and its chances for approval are very high. PTIE just gave up $750 mil or more/year in revenues, and Remoxy was the one sure thing in their pipeline.
Rstor1 - Concerning PTIE, do you know the % royalty that Durect is entitled to on Remoxy? Also, is there any evidence that the FDA has accepted the new lowered endpoints for the 2nd Oxytrex Phase 3? Thanks!
Aiming, OT- PTIE - The Remoxy deal has nice upfronts ($150 mil) but the royalty rates aren't great (only 15% of the first 1 Bil in sales, and 20% thereafter). If Remoxy turns out to be a Bil/year drug, PTIE loses out on $800 mil/year in revenues. Another potential problem is that in the fine print of the press release they say that "Pain Therapeutics will retain sole control of drug development activities THROUGH PHASE 2. The companies will jointly manage Phase 3." So that may indicate that there is in fact a new formulation which will have to go back to Phase 2 (there have been questions about the need for a re-formulation of Remoxy for some time). Anyway, I took profits on my measly 250 shares at $9.10, and will have to plan a new strategy going forward. With the Oxytrex and PTI-901 results looming in the next several weeks, things should be lively, but with the price up there is added danger. Barbier will undoubtedly declare victory in the Oxytrex trial, as long as efficacy is at least equivalent to Oxycodone. Whether or not it's actually a victory will depend on the FDA, and we still don't know if they've accepted the new endpoints. PTI-901 of course is a total wildcard.
Thanks Dew. OT - In addition to Teva and Elbit, are there some other Israeli companies that you particularly like for the longer term? I owned Checkpoint Software at one time, and a mutual fund that invested in Israeli companies back in the late 1990's. Thanks for any input.
Dew, Yes, good point. BTW, do you have a link to that new I-Hub board covering Israeli companies? I'm interested in getting more info on Elbit. Any other boards you would recommend that cover them? I was wondering how with revenues near 1 Bil, their market cap is only ~1 Bil? They look like an extremely interesting company. Thanks.
Aiming, The timeline of February for AD and Feb/March for Shift Work are just estimates by me (Dr. Stoll said "Q1"). In yesterday's presentation, Dr. Stoll said that ADHD enrollment had been completed, and he expects the last patients to complete the trial by year end, with results coming out in Q1. So I figure January is likely for the ADHD results.
In addition to Cubist, another stock you might want to check out is Biomarin. It's something of a turnaround story - after a major acquisition blunder (Orapred) by the previous CEO, they now have new management and the pipeline looks very interesting. They've had an orphan drug business model (ala Genzyme), and have several approved drugs (Aldurazyme - 50/50 venture with Genzyme, and the recently approved Naglazyme which they own 100% of). The near term driver going forward is Phenoptin for PKU (phenylketonuria), a larger and more lucrative orphan indication. These orphan programs move along very quickly, and they expect the Phase 3 results around late March. This trial looks like a virtual slam dunk, since the only patients in the Phase 3 are those who responded well in the earlier Phase 2 (the same PKU patients who were in the Phase 2 moved right into Phase 3, but poor-responders in the Phase 2 were excluded from the Phase 3. This sounds like cheating, but that's how the trial was designed with the FDA, and it has to do with the nature of PKU and Phenoptin). The big wildcard is that Phenoptin (also known as 6RBH4) deficiency is also implicated in vascular disorders, including those associated with diabetes and cardiovascular disease generally (listen to the last several presentations for the mechanisms involved - very interesting). So it looks like Phenoptin is a shoe-in for approval for PKU (a lucrative orphan indication), and if the vascular trials look good (vascular Phase 2 initiates in mid-06), the upside is absolutely gigantic. Anyway, it looks like one to watch closely over the next several years.
Aiming, Yes, in the longer term it probably won't matter that much if you get in at 2.05 or 1.75. One problem I have is that to really load up on Cortex, I'll have to sell something else, and that makes waiting easier. Also in favor of waiting has been the steady timeline slippage for the Phase 2a results, now to Q1 (I'm now figuring ADHD results in January, AD results in February, and Shift Work in February or March). Another factor is the possibility of a pre-results decline like we've seen before (perhaps engineered / manipulated), coupled with some year end tax selling. So I don't see a compelling reason to buy big before year end. An out of the blue BP offer would be a reason, but no BP is going to make an offer prior to seeing the 3 month tox data, and that isn't due til closer to year end. On the other hand, since Cortex trades as thinly as it does, it wouldn't take much buying to push it back to the $2.50 range at any time. If just one mutual fund or a decent size investor or two want in, then up she goes. Of course on the other hand, a wannabe long could also torpedo us down to $1.50 to get a better entry point. Oh well, I figure I'll wait a while before getting back in big.
PTIE -- Upon further reflection, I reduced my PTIE position even more, to a mere 250 shares. There was conveniently no Q3 Conf call (the only stock I follow that didn't have one). They have a CIBC presentation tomorrow at 1:30, but of course the Q+A won't be webcast. The analysts are really going to grill Barbier on the Oxytrex endpoint question. Will the FDA be amenable to changing it at this late stage? Who knows. At this point, management has close to zero credibility IMO. The thing is, I still like Remoxy, and Oxytrex does have a lot going for it too (reduced tolerance, dependence, side effects). Management's lack of credibility makes it very tough to own this stock though.
Imclone -- goes back on my B-list. I never really liked the stock, but was swayed by everyone calling it a takeover play.
Genzyme, Gilead, and Teva -- these do look very good, though as Dew said, they aren't cheap at these levels.
Dew, The fact remains that if one needs a comprehensive overview of a neuro related sector/sub-sector on which to base further research, NI is an excellent place to find it. Just read that issue on the current Schizophrenia programs - where else can one find all that detailed info organized in one place? I'm not kissing up to Neuro, but merely stating a fact. Yes, his stock recommendations/price targets are more subjective, but the detailed overview of the programs he presents is very useful.
Face it Dew, as smart as you are (very smart), you are still a generalist trying following the entire bio sector. Dr. Tracy is a specialist focusing only on the neuro sector, so his depth of knowledge there is greater than almost anyone else.
Sure, his stock recommendations may not always be spot on perfect (PARS for example), but whose are?
Thanks Dew, eom.
Aiming, Peregrine is mentioned over on this avian flu related board, but in a negative way. Thanks to Dew for bringing this board to my attention.
http://www.investorshub.com/boards/board.asp?board_id=3227
Dew, board, Sorry if this has already been discussed, but any ideas out there on avian flu related stocks? Novavax and Vical are often mentioned, as well as Gilead, and of course Chiron is being acquired. I thought Novavax looked somewhat interesting, and they also have some other product lines. Thanks for any input.
The next time Dew comes cruising by this thread, perhaps he'll give us some insights on ESLT and GPCB, which are two companies he mentions in his I-Hub profile. ESLT is an Israeli high tech company which looks extremely interesting. GPCB looks like a German biotech involved with Spectrum Pharma on their cancer drug Satraplin. I'd be very interested in getting Dew's take on these and on any other stocks he currently likes.
Aiming, I haven't had a chance to dig into Peregrine yet, but I did add several names to my growing list of longer term holdings (now up to 18). The new additions are Imclone (possible buyout target), and several larger caps I've liked for a long time - Genzyme and Gilead, plus the generic company Teva (very well run company and they're buying competitor Ivax). I'm beginning to see the logic in some of Dew's picks (I think he likes Teva and Imclone).
Here's my updated list of 18 stocks for the longer haul -
Atherogenics
Biomarin
Celgene
Cortex
Cubist
Discovery Labs
Exelixis
Genzyme
Gilead
Idenix
Imclone
Kos Pharma
MGI Pharma
Protein Design Labs
Pain Therapeutics
Senomyx
Teva
Vertex
I'm still getting up to speed on some of these, like Exelixis and Idenix. I'm re-evaluating my previous pick of Medicis. PTIE is also "on the bubble", but I figure is probably still worth a modest position.
It takes a while to get a feel for so many companies, but on days like today when there's a broad market advance, having a well diversified portfolio sure seems like a great idea. If Cortex should have one of its temporary pre-data drops under $2, I'll be backing up the truck. Cubist is one I really like also - their antibiotic Cubicin is ramping up sales faster than any IV antibiotic in US history (it works against resistant staph aureus), and it should get expanded approval for bacteremia and endocarditis next year (it's already in use for these indications off label).
Now if I could only work up the nerve to nibble on GTCB :o) I still have grave doubts about more delays, but you never know. I'm going to have to check out some of Dew's other picks. Dendreon I looked at years ago, but decided to stay away from cancer vaccine companies, along with the gene therapy and stem cell areas.
Aiming, Dr. Stoll hasn't said anything new about an interim analysis. He'll probably give an update on all the trials at the R+R Conf next week.
Peregrine does look interesting, though they have less cash than Cortex (~16 mil), and they have a ton of shares outstanding (~ 170 mil or so). The share price is only a dollar, but the market cap is already somewhat high due to all the outstanding shares. Looks like they're probably going to have to raise some money soon. The idea of a monoclonal antibody attacking the abnormally positioned cell wall lipids associated with tumor vasculature makes some sense, but I'll have to research into how the same compound also works against viruses. That program looks very early stage, so I don't see how it could impact the avian flu problem in the near term. I'll have to check them out more thoroughly though. I wonder if Dew has an opinion on the stock?
Aiming, Thanks for re-posting that message over on Yahoo. Concerning PTIE, I only have 425 shares, so I haven't been following it as closely as some other stocks. However, the recent press release seemed very confusing. It sounded like they've changed, or are trying to change, the endpoint in the Oxytrex trial from superiority to reduced side effects (physical dependence). The press release appears deceptive to me, since they never actually say that they're changing the endpoint, but use a pseudo Q+A format to state that the endpoint is reduced physical dependence, leaving it up to the reader to remember that it was previously superiority. To make matters worse, we come away not really knowing if the change in the endpoint was approved by the FDA or not ("the final analysis plan for this study was submitted to the FDA in early October ... the "prospectively defined" primary endpoint is reduction in physical depepdence and withdrawal symptoms..). That would seem to indicate that perhaps the FDA hasn't yet approved the change in the endpoint.
A hell of a way to run a railroad! It looks like that guy over on the Yahoo PTIE board ("Dunno") may be onto something with his harse criticism of PTIE management. I haven't followed the company for that long, but if this is typical of how they operate, I would be very cautious. The confusion over the Remoxy formulation is another red flag.
That said, they still might stumble through and ultimately get an approval, in spite of themselves. The stock is very cheap, and a small position in PTIE might still make sense, but I wouldn't make more than a token bet on a company whose management appears to be deceptive.
Anyone else having trouble posting on Yahoo? Looks like I must be blacklisted or something - haven't been able to post on any Yahoo board for a week or so.