Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Your second analysis is equally as flawed because you mistakenly used the same (10%) volatility assumption for both ARIA and CPRX. fwiw, the market is currently pricing the ARIA option with a 60% implied volatility. If you actually run the black-scholes model using a 60% vix you'll come out at $4.50 which is basically where the last trade was done. The model is only as good as the inputs - basically garbage in, garbage out.
hi dough, yeah, like ARIA, CPRX's second drug, CPP115, is the ultimate value driver here. The big risk with CPP109 is that the phase 2a trial did not reach it's primary endpoint which makes the phase 2b trial all the more important. There are a couple of reasons why I'm willing to hold the stock now. First, digging a little deeper into the failed P2a trial, it appears the results reflected a poor trial design more than an actual failure of the drug itself. Fewer than 40% of patients took the correct dosage. The trial ended up being severely underpowered and consequently did not meet its endpoint. However, if you break out the results for the pts who did take the drug correctly, the trial would have met its endpoint.
Check your math. In your analysis you valued the warrant as if it were a "free" share of stock. This was a mistake. The warrant is simply a 5 year option with an assumed $1.30 strike. Using black-scholes, the current value of the warrant is around 30 cents. Since investors received half a warrant for each underlying share, the real value given up is around 15 cents and not the 1.15 your analysis assumed. So, no, I don't think it will trade at 77 cents, but if it does you can be assured I'll be adding to my position.
I might give your argument more weight if it weren't for the simple fact that the stock went UP 40% AFTER the director sold his shares. If you're right then we'll see Coelho file a Form 4 this week but I'm not holding my breath.
Thanks for asking but what I own and the price I own it at is my business but suffice it to say that I could care less about whether CPRX goes up or down 25 cents. I've always found trying to time the bottom to be a fools game. In the greater scheme of things whether I buy at a 25mm market cap or a 30mm market cap isn't going to make a bit of difference to me.
Best of luck trying to invest only in biotechs that don't need to raise $. That's a pretty small universe of very pricey stocks, lol.
Frankly, I'm impressed that the company has been able to get this far without having to issue any warrants. Can you name one other biotech with a similar market cap that hasn't issued warrants? I know I can't.
Also, I find the likelihood that a director sold shares at $1.25 just to save a dime on today's pricing of $1.15 to be remote. Of course, he knew a financing was coming...anyone with half a brain knew the company was going to raise cash before the end of the year.
bw, imo, the director's disposition and today's financing aren't connected (unless of course you think they misrepresented the 8k disclosure). All in all, I think today's financing is pretty much par for the course given the company's stage of development. Until you get the pipeline far enough along to negotiate a decent partnership deal, you have no alternative but to dilute. As far as I'm aware, this is the first time the company has issued warrants. Here's the most recent financings from the latest 10Q:
On June 2, 2008, the Company filed a shelf registration statement on Form S-3 (2008 Shelf Registration Statement) with the SEC to sell up to $30 million of common stock. This shelf registration was declared effective by the SEC on June 26, 2008. In September 2008, the Company sold 1,488,332 shares of its common stock at $3.00 per share pursuant to its 2008 Shelf Registration Statement and received gross proceeds of approximately $4.5 million before commissions and incurred expenses of approximately $377,000. In October 2009, the Company sold an additional 3,973,000 shares of its common stock under its 2008 Shelf Registration Statement at a price of $1.00 per share and received gross proceeds of approximately $4.0 million before commissions and incurred expenses of approximately $275,000. In August 2010, the Company sold an additional 1,351,352 shares of its common stock under its 2008 Shelf Registration Statement at a price of $1.11 per share to an institutional investor and received gross proceeds of approximately $1.5 million before commissions and incurred expenses of approximately $44,000.
On December 3, 2010, the Company filed a new shelf registration statement on Form S-3 (2010 Shelf Registration Statement) with the SEC to sell up to $30 million of common stock and common stock purchase warrants. This registration statement was declared effective by the SEC on December 15, 2010. During March 2011, the Company sold 2,259,943 shares of its common stock under its 2010 Shelf Registration Statement at a price of $1.12 per share and received gross proceeds of approximately $2.5 million before underwriting commission and other expenses totaling approximately $300,000.
Expected Milestones
Q4 2011
. Initiate CPP-115 U.S. Phase I(a) trial
. Initiate CPP-109 study for new indication
Q1 2012
. Results of CPP-115 U.S. Phase I(a) study
. Complete enrollment of CPP-109 U.S. Phase
II(b) cocaine trial
Q3 2012
. Initiate CPP-115 U.S. Phase I(b) study
Q4 2012
. Top-line results for CPP-109 U.S. Phase II(b)
cocaine trial
I've added this morning as well. Although the announcement didn't disclose how the funds will be used, I suspect they'll now be moving CPP115 to trial before year end. Also, a quick look at the financials indicates the company now has sufficient funding through the final read out of the CPP109 trial.
As an investor, my view of a company's management is a little more nuanced than simply whether they go to jail or not.
Yea, is it me, or does it seem like the ceo has gotten a lot smarter ever since he put $3.5 million of his own $ at risk, lol.
"a great job in negotiating the Merck deal"
Hardly. The original structure of the Merck deal is primarily why I avoided the stock for a couple of years even though I felt the pipeline had so much upside. Structuring a deal that required ariad to fund 50% of the rida development costs almost certainly resulted in unnecessary dilution while offering limited upside to shareholders in return.
The restructured terms (albeit with less upside but significantly less risk), imo, should have been negotiated from the beginning. Between the MRK deal, the millions wasted on legal fees, the unnecessary dilution, and having your coo, chief legal counsel and 5 board members (one left earlier in the year) resign, I think criticism of management is more than valid, imo. Fortunately, the company now has the compelling pipeline the ceo and all the early investors originally envisioned, and ultimately is what will continue to drive the market cap.
OT Germiest place in America? The gas pump
With flu season approaching, I thought this might be of interest.
A new study has found that the gas pump is the germiest, filthiest thing we touch in everyday life. That's according to Dr. Charles Gerba of the University of Arizona -- and he should know. A microbiologist, he's known by the nickname "Dr. Germ."
In research results released Tuesday, Gerba found that 71% of gas pump handles and 68% of corner mailbox handles are "highly contaminated" with the kinds of germs most associated with a high risk of illness. The study, reported in USA Today, says that 41% of ATM buttons and 43% of escalator rails are similarly teeming with germs.
Other highly contaminated places that many people probably never considered before, and now might fear using, are parking meters and kiosks, about 40% of which are fouled by germs. Crosswalk buttons and vending machines were tied at 35%.
As part of the study, hygienists swabbed suspected germ hotspots and then analyzed the findings. They used general industry sanitary standards as their benchmark, according to Gerba.
Gerba joined forces with Kimberly-Clark Professional's Healthy Work Place Project, a subsidiary of the manufacturer of tissues, hand sanitizer and the like. (The project's website says sick employees cost the average business about $1,320 per employee.)
So what are we supposed to do? Apparently, it's all about "hand hygiene" -- washing your hands throughout the day -- and wiping down your work station with a cleaning product (naturally) because a desktop, keyboard and computer mouse can be a breeding ground for germs, say the folks at Kimberly-Clark.
"As your computer boots up, wipe down your desk and mouse," Brad Reynolds, leader of Kimberly-Clark's Healthy Workplace Project, said in the USA Today article. He also advised swabbing conference tables between meetings.
http://latimesblogs.latimes.com/nationnow/2011/10/germiest-place-in-america-the-gas-pump.html
You're right. The last raise was exactly one year ago today. http://phx.corporate-ir.net/phoenix.zhtml?c=118422&p=irol-newsArticle&ID=1486799&highlight=
I remember it a bit differently. Between the directors revolt and the ceo's purchase, there were several financings. It was only after this additional dilution that Berger bought in at $1.75 pps.
Fyi, todays BIO Investor presentation is available for download.
http://ir.catalystpharma.com/redesign/events.cfm
I haven't listened yet but I did run through the slides. Perhaps I missed this in a previous presentation, but I noticed that the company is now estimating $1.5 billion peak revenue for front-line CML use, in addition to the $900mm second-line opportunity.
Sure, each situation needs to be assessed on its own merits but, in general, P2 results haven't been shown to be all that predictive of P3 success. The reality is that since 2007 the Phase III failure rate for new drugs has been around 50%. The # 1 reason (66%) is due to lack of efficacy. I'm fairly certain that these drugs all showed positive efficacy in their P2 trials as well ;)
"If a company ran few trials for one indication and kept going based on consistently good results in that narrow path, the bias is much, much smaller. "
Not necessarily. A post by Dew from a few years back found that "81% of phase III studies have lower response rates than preceding phase II studies" even though the P2 and P3 studies used identical chemotherapeutic regimens.
I've been following along as well and have been waiting patiently for the original poster to actual make his point.
I'm not sure that if this decision says more about Rida, specifically, or maintenance therapies in general. fwiw, I wasn't particularly surprised by the FDA's decision.
Comparison of Approval Times for Priority and Standard Review Drugs
Irregardless of how MRK proceeds with Rida, I'm just glad that ARIA off-loaded 50% of its development costs for a lower % of the topline (as opposed to the shared cost/bottomline royalty deal they originally structured). imo, this has allowed the company to retain control of two far more promising drugs - ponatinib and AP113 - without incurring additional dilution (so far).
The duration data released today really go a long way toward clarifying Ponatinib's commercial opportunity. Making a case for Ponatinib over sprycel or tasigna in 2nd line just got a whole lot easier. The 92% MCyr in patients with T315I mutation is jaw dropping and says a lot about the company's drug discovery capability. My guess is that many analysts are waiting for the anticipated first read on the PACE trial expected at ASH but, imo, today's data was possibly more important.
I'll have to go back and check to be sure, but, I believe Sprycel's MCyr was in the low 60% and Tasigna upper 50% (not sure if this was 12 or 24 months). Considering Ponatinib achieved 72% in what is arguably a more heavily pre-treated patient population is certainly impressive.
Revenue for imatinib in CML was estimated to be more than $3 billion in 2010.
Catalyst Pharmaceutical Partners Announces Presentation of Data Regarding CPP-115 at the American Chemical Society Annual Fall Meeting
CORAL GABLES, Fla., Aug. 31, 2011 (GLOBE NEWSWIRE) --Catalyst Pharmaceutical Partners, Inc. (Nasdaq:CPRX) today announced that Dr. Richard B. Silverman, a renowned expert in the field of rational drug design, on the biochemistry of GABA aminotransferase (GABA-AT), and the lead inventor on the team that invented CPP-115, gave a presentation entitled "CPP-115: A GABA Aminotransferase Inactivator and New Treatment for Drug Addiction and Epilepsy" at the American Chemical Society Annual Fall Meeting in Denver, Colorado on Monday, August 29, 2011.
The presentation discussed the medical relevance of GABA aminotransferase inactivators in the treatment of epilepsy and drug addiction, the history of the discovery of CPP-115, a detailed mechanistic analysis of GABA-AT inactivators, and a summary of CPP-115's pharmacological properties, including its superior visual safety profile and potency compared to vigabatrin. The data contained in Dr. Silverman's presentation is expected to be submitted for publication in a peer-reviewed journal in the future.
About Richard B. Silverman, Ph.D.
Dr. Silverman is the John Evans Professor of Chemistry at Northwestern University. He is the inventor of Pfizer's $3 billion/year Lyrica ® (pregabalin), marketed worldwide for the treatment of epilepsy, neuropathic pain, fibromyalgia, and (in Europe) for generalized anxiety disorder. He has received numerous awards, most recently the 2011 E.B. Hershberg Award for Important Discoveries in Medicinally Active Substances from the American Chemical Society, the 2009 Perkin Medal, from the Society of Chemical Industry, and, in 2009, was inducted into the American Chemical Society Medicinal Chemistry Hall of Fame; this year he also was named a Fellow of the American Chemical Society. Dr. Silverman holds 43 patents, has published over 280 peer-reviewed articles and has written four books over his 35-year career in academia.
About Catalyst Pharmaceutical Partners, Inc.
Catalyst Pharmaceutical Partners, Inc. is a development-stage biopharmaceutical company focused on the development and commercialization of prescription drugs targeting diseases of the central nervous system with a focus on the treatment of addiction and epilepsy. Catalyst has two products in development, and is currently evaluating its lead product and first-in-class GABA aminotransferase inhibitor candidate, CPP-109 (vigabatrin), for the treatment of cocaine addiction. CPP-109 has been granted "Fast Track" status by the U.S. Food & Drug Administration (FDA) for the treatment of cocaine addiction. Catalyst also expects to evaluate CPP-109 for the treatment of other addictions. Catalyst is also developing CPP-115, another GABA aminotransferase inhibitor that is more potent than vigabatrin and has reduced side effects (e.g., visual field defects, or VFDs) from those associated with vigabatrin. Catalyst is planning to develop CPP-115 for several indications, including drug addiction, epilepsy (initially infantile spasms) and for other selected central nervous disease indications. CPP-115 has been granted orphan-drug designation for the treatment of infantile spasms by the FDA. Catalyst believes that it controls all current intellectual property for drugs that have a mechanism of action related to the inhibition of GABA aminotransferase. For more information about Catalyst, go to www.catalystpharma.com.
Nice to see ariad start a ALL ph+ trial
http://www.clinicaltrials.gov/ct2/show/NCT01424982?term=ariad&lup_s=07%2F30%2F2011&lup_d=30
you haven't missed a thing. I stopped being a moderator just so I wouldn't have to read through all the superficial posts. ;)
yup, potentially having 2 approved drugs next year seems to be attracting interest ;)
What's going on? Selling by folks who don't know what they own because from a fundamental perspective the company is hitting on all cylinders (well at least 5 of 6, lol)
Dough,
Here's a link to the P2b trial:
http://clinicaltrials.gov/ct2/show/NCT01281202
btw, the company has partnered with the National Institute on Drug Abuse (NIDA)and the Department of Veterans Affairs who are picking up 75% of the trials' costs.
13 times. good to know. oh, not to complicate things further, but if one starts with 10k shares, sells half of them, and subsequently buys back 1/2 of their "new" position, they would end up with only 7500 shares(less taxes, commissions and potential missed gains). perhaps in the future, posters would be kind enough to identify whether they are talking about their "original" positions or their "new" positions so the rest of us can more easily follow along ;)
I've been in and out of CPRX a few times in the past but never felt that they were far enough along to warrant a core position. I really like the progress they have been making and, with 2 drugs in their pipeline, a $35mm market cap seems undervalued. fyi, Cowen recently started coverage with a "Outperform", so it looks like others are may be starting to take an interest as well.
fwiw, I'm taking advantage of the "debt crisis" turmoil to start a new position in CPRX. With the phase 2b trial well under way, the CPP115 trial about to start, and a possible partnership in the works I think there is sufficient upside potential to warrant the risk.
Aria2010 and Lax, this board's posts are now driven primarily by short-term trading which holds little interest for me. So, even though aria remains my largest holding, I, too, find myself completely bored with the daily machinations over intra-day price fluctuations.
and all this time I thought you were Clackson, lol.
BTH, I have no doubt that IR monitors all forms of social media (they wouldn't be doing their jobs if they aren't) but there is a far cry from monitoring to reading message boards "for research" let alone actively participating under an alias as some here seem to think.
What's your point?