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This board is very civil to its cheerleaders.
I'm saying that if you got a triple you didn't buy at the bottom. You bought a lot of shares near the bottom.
If you actually bought all your shares below 0.40 (pre-split) then that means that for most of the years when you were boosting this stock you were actually on the sidelines waiting for the stock to go lower. I doubt that was the case.
Don't get your panties in a knot.
I think I've made it clear that there are two entirely different probability calculations here. My own, seat of the pants estimate based upon what I see as the likelihood of success of each stage, and the objective probability implied by the market and calculated simply from the current price and the expected price if successful. The latter probability is lower than the former.
Actually, if you bought at the very bottom you'd have a quadruple (300% gain). I'm pretty sure nobody has a 4 banger yet -- nobody has the magical ability to buy all his shares at the very bottom.
I am in the black on my shares. But nobody is up 900% yet.
BTW, I actually just bought a few shares at 4.67, simply to get my share count at a multiple of 100. I've had an annoying odd lot ever since the stock split.
I believe this stock has about a 1 in 5 chance of getting a 10x or more gain, so it's a decent lottery ticket.
No doubt, but I'm certain you're not up 900%.
I don't know whether the "new" BTA will be any good but it can't be worse than it was under Patrick Cox. Cox's recommendations were mainly useful to someone needing lots of tax losses.
NNVC has not had a 910% gain. It's lowest price over the past year was about 1.25 after adjusting for the split. So the stock is up 300% from its bottom. But damn few people bought the bulk of their shares at the bottom. Some bought at $2 pre-split ($7 post split) years ago and are still waiting to get their money back.
There is an obvious similarity between NNVC and STSI -- both were recommended by Patrick Cox.
Yes, there were some tests in mice. I don't think they went through the sort of rigorous toxicity testing the FDA requires for clinical trials of pharmaceuticals, but OTOH I'm not aware of anyone using the stuff experiencing toxic effects. The problems Star Scientific is having aren't due to toxic effects from anatabline, they are due to a lack of evidence for efficacy, aside from the sort of "testimonials" you can get for any brand of snake oil.
Placebos produce remarkable results for a great many of the people who use them too.
Again, the rabbit eye tests were not for Flucide so are utterly irrelevant to the success of Flucide.
6,000 rats (or mice) just show that Flucide is a godsend to rodents with the flu, provided that anybody wants to spend the money to cure them.
Again, we don't know that Flucide works in people. Anatabine worked in mice too. Any probability of Flucide working is basically pulled out of a hat. We all have different hats. Continue to believe that NNVC is a sure thing if you want, I'll stick with 20% odds.
The "headline drug" for NNVC is Flucide, which has not been tested on rabbit eyes.
You seem to be implying that drugs only fail because of toxicity issues. Many drugs fail because they don't work in humans. Star Scientific was never able to provide convincing evidence that anatabine does anything useful in humans. I don't think toxicity was ever the issue.
There is still an excellent chance that Flucide doesn't work in humans. Judging by the price currently assigned to NNVC, the market seems to agree with me.
It is not a a matter of the owners being "chicken" about letting the stock price rise. There are two types of stocks that have huge volatility, making it easy to gain a fortune or lose one -- biotech start ups and junior mining stocks. Both go for many years at a time without any revenues. Both have their stock prices swing up and down based on wild fears and wild hopes, rather than tangible, quantifiable results. And for both types of companies management does the rational thing (from their point of view) during upswings -- they sell more shares. That's the only revenue they have, and it keeps the lights on for a few more years.
The only cure is for NNVC to do its clinical trials, which if successful will actually bring in revenue from a source other than selling stock.
Another Cox recommendation bites the dust.
The current editor of Breakthrough Technology, Stephen Petranek, has just recommended dumping Star Scientific, at 0.90. It was originally recommended at 3.48, when Patrick Cox ran the show.
The money quote:
I’ll put my feelings about Star’s research this way: I promise never to recommend a stock to you based on mouse studies. Mice are about the best affordable model for humans, but more often than not, promising results in mouse studies eventually fail.
Now what other biotech stock did Pat Cox recommend that has only tested its headline drug on rodents?
NNVC might turn out to be a winner. But the biggest risks are still ahead. The market is still pricing in about a 10% chance of success. Being the optimist I am, I continue to put the odds at about twice that.
Or down very fast. Crazy markets have a way of surprising people. For now, though, the floor at 4.50 looks pretty solid.
Well, we're now right back in the middle of the 5 month trading range. It looks like any sustainable rise in the stock price will have to be achieved the old fashioned way -- by getting actual results.
Yawn. The old "evil Interactive Brokers will cause NNVC to spike down because of their strict margin requirements on cheap stocks" claim that ZincFinger keeps making over and over.
Seriously, how many people both have significant shares of NNVC bought on margin and have those shares in an IB account?
I happen to have my NNVC shares in an IB account. The price could go to zero and I won't get a margin call. I'm not stupid.
Despite the retreat the stock price is still above the high end of the 5 month trading range. So we may yet see a permanent move to a higher price range. Certainly someone has gotten eager to own shares, even though I don't expect to see any more news that matters for several more months.
The top of the trading range is 5.75.
If we break through that we may have a sustainable uptrend.
But right now I'd say it's just random motion within the 5 month trading range of 4.50 to 5.75.
Well ICPT went up $170 today (61%) so I doubt any of its shareholders are looking at us NNVC guys and eating their hearts out.
I'm going to respond anyway. A stock price does generally reflect all currently available information. If a stock goes from $72 to $270 in a day that simply means that some new information has come in (such as a successful phase 2 trial).
So yes, a stock can be priced correctly at $72 one day and correctly at $270 the next. After all, a few days ago nobody knew whether that new liver drug was going to work.
I did not say anything patently untrue. If NNVC gets up front license fees it's only because the payer expects to get money from Flucide. The payer would offer nothing if he didn't expect Flucide approval. In the final analysis it doesn't matter whether it's NNVC or some licensee that gets the Flucide income, in all cases the current valuation of NNVC is dependent upon that income regardless of who the recipient is.
You continue to insist that we need to analyze how much energy that marble uses on every little bumper and bell.
I do know what I'm talking about. Even if licenses are purchased before Flucide is approved the amount that pharmaceutical companies pay for those licenses will in turn be based on their expectation of the value of Flucide after it is approved, combined with their estimation of the probability of approval at that time.
Ultimately it all comes down to approval, your attempts to obfuscate this fact notwithstanding.
Yes, there are lots of papers on how to estimate the risks and thus the valuation of drug candidates. I assume that the smarter people in the market have used those methodologies to decide what the fair price for NNVC stock is. And by looking at the current price we can see what the aggregate conclusion is: A 10% or less probability of success.
My analogy was right on target. Any intermediate value for the company (say, after successful tox tests but before phase 1 trials) is itself based upon the expected value of the company at that point, determined by the probability of success at that point and the value of the company after success is achieved. In all cases the value is ultimately determined by the fact that money will come in if and only if Flucide is approved. Indeed, supposed we assume a priori that Flucide will not succeed. It might pass the tox tests and the phase 1 trials, and even the phase 2 trials, but ultimately never gets approved. (Presumably God whispers this in our ears.) What would you value NNVC at then? I'd value it at 0, or something very close to that. I guess the value after approval is what matters after all.
We could attempt to come up with the probabilities of each step succeeding and chain them together. That is in fact what you have to do if you want to come up with your own independent estimate of the fair value of NNVC shares. But I'm asking a different question. Presumably the smart money has already done their calculations before deciding whether to buy NNVC shares and at what price, which implies that the smart money has come up with their own overall probability of success. My question is: What probability did the market come up with? Given that the market is currently willing to buy at about $5 a share but not very much above that, given that NNVC will be worth at least $50 a share if it succeeds, the implied probability is 10% (or less).
You're just trying to complicate a very simple thing. Again, all those intermediate steps -- tox studies, INDA filing, phase 1 trials, phase 2 trials, phase 3 trials (if needed) are all just steps to getting Flucide approved and have no value otherwise. So why try to calculate a chain of hard to determine valuations and probabilities when you can go straight to the end point where it's possible to set a reasonable valuation on the company?
Analogy: A 10 gram steel marble starts at a height of 10 meters above the floor and goes through a Rube Goldberg machine -- it rolls down a ramp, hits some bumpers, dings some bells, bounces off a little trampoline, rolls through some see saw things, dings more bells and gongs, and finally comes to halt at the floor.
How much energy was expended by the marble?
My method: Energy at start (all potential): h*g*m = 10 m * 9.8 m/s^2 * .01 kg = .98 joules.
Energy at end (the ball is at rest at height 0): 0 joules.
Energy expended: .98 joules.
Big Kahuna: I don't like your method. We have to look at the frictional losses on the ramp, the energy expenditure at each bumper, the energy needed to ding the bells, the frictional losses at the trampoline, etc. Of course it will take us weeks to even estimate any of these values.
That's why I'd do better in a physics class than you.
Yes, that's your problem. Even at your clearest, you just don't get it.
Write up your paper Puffer, we all want to see it.
"Errors in Elementary Expectation Calculations Due to Omission of Key Parameters"
Where is the evidence that there is a flaw in the basic formula for expected value?
Probability theorists will be eager to learn why their elementary formula for expected value is flawed. So Puffer, be sure to submit your results to an appropriate refereed publication.
An industry comparison of other early stage biotechs is irrelevant to my argument. Other companies might be priced lower because their value if they succeed is lower than for NNVC. Or it might be that the market gives them an even lower probability of success than for NNVC. The question was, is Arch's estimate of a 10% probability of success out of line with the current market valuation? I showed that it is not.
For the third time, you clearly do not understand what I was saying.
And it's cute how in your quote you left out the immediately following sentence.
Right now the options are so thinly traded that I doubt they'll have much of an effect on the price of NNVC at expiration. The biggest open interest is for the June $5 calls, with 292 contracts, corresponding to a mere 29,200 shares, a fraction of the daily trading volume. (And that's partly balanced by 114 puts at the same strike and expiration.) With the current mile wide bid/ask spreads on the options I doubt that trading volume in the options will pick up anytime soon.
Vaccines are a threat to NNVC, insofar as a better, more universal vaccine would be more widely used than the current vaccines. I myself do not generally bother to get a flu shot, because you need one every year and they always seem to be for last year's strain of flu. If there was one vaccine I could take that would protect me from the whatever strains of flu come along for the next several years I'd take it. So, a better vaccine means more people are vaccinated means fewer people get the flu means a smaller market for Flucide. There'll always be a need for treatment of people who have the flu, but a good vaccine could certainly shrink the size of that market.
There are two good reasons to look at the probability of getting Flucide to market. First, all intermediate results are relevant only insofar as they help get Flucide to market. Second, it's only after Flucide is available for sale that we have an objective way to value the company (based on expected sales and profit margins).
The simple fact is, that using any reasonable valuation for NNVC after Flucide approval, the current valuation shows that the market is placing the odds of getting approval at under 10%. You may believe that the market is wrong. I think it is myself. But Arch's views are not more pessimistic than the market's own implied probabilities.
Somehow I get the impression that you just are incapable of understanding my point. I deliberately used a low ball estimate of NNVC's post success valuation, as a higher value would only lower the implied probability of success.
I was not claiming that NNVC would be priced at 1x sales, although I did point out that given various competing drugs and vaccines now under development we don't know what those sales will be.
There's nothing contrived about my percentages. They are based upon elementary calculations of expected value. My point is that those odds are what is implied by the market price. You may feel that the market grossly underestimates the probability of success. I myself think it does somewhat. But the fact remains (and this is a fact, not an opinion) that the probability of success indicated by the current market valuation is less than Arch's own 10%.
You completely missed the point of the post you are responding to. Apparently you failed to read this part: "(plenty of people will jump in at this point and insist it will be much higher, but that will only strengthen my argument)."
I was showing that the current valuation is entirely consistent with Arch's view that Flucide has a 10% chance of success. Any higher estimation than $2.5 billion for NNVC's market value after Flucide approval gives a lower probability of success than 10%. If, for example, you believe that NNVC will be worth $10 billion after Flucide approval then the current valuation of under $250 million means that the market is assigning a probability of success of .25/10 = 2.5%. So if you are right about the final valuation after Flucide approval then the market is saying that Arch is an optimist.
BTW, there is nothing ridiculous about a company selling for 1x sales. Lots of businesses are priced in that range. To be sure, pharmaceutical firms generally are priced higher because they get higher margins on sales than other businesses. But you are still assuming you know how big the sales will be. By the time Flucide is on the market any of several competing products could enter the market as well, driving down the price substantially, and throwing a monkey wrench into your sales forecasts.
Ask Arch, not me.
Dr. Seymour has said he expects tox to begin in 1st quarter 2014. I take that to mean "end of March". Tox will be completed 6 months later (anybody who believed you could do tox in a couple of weeks had to be smoking something). So tox is expected to be done in 3rd quarter 2014. I take that to mean "end of September".
I think there's a fair chance tox will be completed this year. I'd be very surprised to see any clinical trials before 2015.