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AVII -- in a situation like this one, where CV deaths is so clearly the "centerpiece" secondary endpoint, and where demonstration of a significant benefit has an order of magnitude impact on perceptions of the drug, is it possible that an interim determination effectively becomes a determination on that single endpoint?
(Assuming, of course, that you were already massively stat sig on the primary endpoint, which you would be if the CV deaths endpoint were in play at all...)
Well, it's important to have someone loyal.
And I don't think we need to worry here. Pretty much the last thing he did as an "analyst" was pump Barry Honig's stock, Pershing Gold.
He is the RIGHT GUY for the job at RIOT!!!
I'm pretty excited, I have to say.
I'm expecting astounding things here!
Friday after the close is even possible!
Whatalane... I’m relying in others’ assessments of cohort comparability... if you have concerns about that, I’m sure they’re valid.
Yes, I agree, in a morbid sense -- the fact that outcomes for this population, generally, haven't improved since REDUCE-IT was designed is, all other things being equal, a positive indicator for the trial.
A mild positive -- an inconclusive positive -- but a positive nonetheless.
Yeah, really looking forward to Michael Ho's 3 month old consulting company hooking all those lawn mowers together -- and for only a $4 million consulting fee. What a steal!
Here's what they sound like when they're turned on...
PUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMPPUMP....
What a joke.
Sit tight, Pumpenstein...
The SEC train is about to roll into town!
What a RIOT!!!!
Here's sumpin' fun for you to look forward to:
SEC Party Coming Your Way
Targets have a limited amount of time to disclose the existence of an investigation...
Tick tock...
Not quite yet....
We’re getting closer....
I’ll let you know when.
Oh no it won't.
My bet is they're pumping into another offering. Maybe their last for quite awhile. It's hard to get offerings done when the SEC is investigating you...
MRM -- re placebo rate, a few years back I tried to model all that out, and make those kinds of presumptions, but the number of SWAG-type assumptions that are required to do that is high, and when that's the case, you introduce a BUTTLOAD of confirmation bias into the exercise.
I'll just say this about the rate of events -- it has raised no red flags -- nothing to make one worry that we're dead in the water here. But I think that's all we can say.
This is a custom trial population. It's *similar* to other big trials, but not the same. Given the combined vectors of population specifics, geographics, and trial timing, it is just not possible to say definitively anything like "this is how the placebo group will clearly perform".
You may be right about the 5.2% or more assumption about the placebo group, but I don't think modeling conclusions that include that assumption create any greater certainty about the outcome here.
Faith in the science remains one's strongest bull case here, if you are indeed a bull. Since I don't understand the science (really), I'm relying on the expertise of others. That's risky, of course, but I'm greedy. It's the price you pay for accessing leverage you don't really deserve...
Yeah, I read that... feels pretty optimistic to me, but I'm no expert on what folks in this space would consider to be a meaningful clinical benefit. 10% -- especially if accompanied by little or no impact on CV deaths -- seems negligible from a man-on-the-street perspective, though.
This is a good opportunity to understand the difference between statistical significance and clinical benefit. Very large trials can generate technically stat sig results, but that result can still represent a very minor clinical benefit.
As the number of events in a trial becomes VERY large, an insignificant difference in treatment effect becomes *statistically* significant.
My gut tells me the 15% threshold is a more reasonable threshold of meaningful clinical benefit. But that could be wrong.
Hopefully it's 30% and this whole discussion is moot!
I think we are definitely on to something here!
And talk about directly targeting the right population!
The correlation between excessive beer drinking and CVD has to be really high, I would think...
I think anything below 10% would be a disaster. The stat sig cutoff is around 9.5% -- something like that -- but the optics of less than 10% would be awful.
Between 10% and 15% is murkier, but still bad. Merely being stat sig on MACE events -- and probably showing little CV death impact -- well, I think we'd be lucky to hold the current price if that were the result.
The p-value of < .001 on MACE is really important -- that's around 15% RRR. And it's close to the AVII77 "two successful trial" standard of .025^2 = .000625 that the FDA claims is their general standard for approval.
I will say this, of course -- if we want to get rich here, we really need CV deaths to come in at an impressive level. Ideally p will be less than .01, and if it's less than .001? The sky is the limit!
Super basic discounted cash flow model:
- $1bn ramping $1bn per year to $5bn
- 75% gross margin and then 25% blended global tax rate
- Discount result at 8% per annum (cost of equity)
2019 1 0.75 0.5625 0.541265877
2020 2 1.5 1.125 1.002344217
2021 3 2.25 1.6875 1.392144746
2022 4 3 2.25 1.718697218
2023 5 3.75 2.8125 1.989232891
2024 5 3.75 2.8125 1.841882306
2025 5 3.75 2.8125 1.70544658
2026 5 3.75 2.8125 1.579117204
2027 5 3.75 2.8125 1.462145559
2028 5 3.75 2.8125 1.35383848
2029 5 3.75 2.8125 1.253554149
2030 5 3.75 2.8125 1.160698286
17.00036751
$17 billion. Not far off $50 per share.
$18 billion market cap does sound like a lot, doesn't it?
I do think you can get there on a discounted cash flow basis. Something like $1bn in sales ramping quickly to $5bn -- and then truncated after patent expiration (2030).
Also, if the "market cap" of bitcoin -- which is a complete joke -- can be $180 billion, then something that could extend lives for millions should easily be worth a tenth of that.
I do also think the most reliable strategy for crystalizing fair value post-(hopefully successful)-REDUCE-IT is to get bought.
Maybe they could make beer supplemented with EPA
It would increase uptake
Who wants to do stock price predictions?
I am so bored and have no idea how to make it until Q3.
Let's do first day after results/week after results/end of 2018/end of 2019
I'm going to go with $18/$25/$35/bought out at $50
Ready...... go!
Check out the legal address of Ingenium International LLC:
Ingenium business HQ
Ingenium International LLC = Michael Ho (Kairos)
So RIOT enters into a 12-month consulting contract with Ingenium International LLC for blockchain mining help and other blockchain stuff. $4 million contract!!!
SEC filing
Well, Ingenium International LLC was just set up in Tampa on 12/21/17... and one of the authorized persons is Michael Ho -- he was the CEO of Kairos Technology, recently acquired by RIOT:
Ingenium's Florida incorporation
Does this seem fishy to you???
Here's what I obviously want to believe -- management's estimate of expected event rates for placebo is perfect, so therefore the only explanation is that the Vascepa arm is outperforming.
But I know better than that now. An unbiased observer would say, "OR management's estimate was too heavy".
Trying to read tea leaves based on the rate of events arising is a bad idea. Confidence here should be based on knowledge of the science. It should not be based on "modeling".
(In terms of event pattern, since the exposure count drops by one every time someone has a first event, a constant year-by-year number of first events means an increase in the event rate. But until enrollment stopped, even that assessment gets complicated.)
MRM -- I don't have a model of the trial. I gave up on attempting those because they just end up being personal echo chambers -- confirmation bias machines.
I feel good about 15%+ RRR, but anyone who is SURE is naïve.
CV deaths is an SE, but I would not describe it as frosting on the cake. It could be the difference between a big drug, and a BLOCKBUSTER drug.
While we're obsessing about overall RRR, here's a reprise of some p-value breakpoints, on two key endpoints:
On the primary endpoint, here are the big breakpoints:
p < .001 RRR > 15%
p < .0001 RRR > 17.5%
p < .00001 RRR > 20%
This is because the sample size is so huge, of course. A low p-value for an endpoint with a huge n doesn't necessarily translate to an enormous clinical benefit.
Now, let's assume there are a total of 300 CV death events in the final data... (I forget what we were guesstimating...). Here are some key p-value breakpoints:
p < .05 RRR > 20%
p < .01 RRR > 26%
p < .001 RRR > 31.5%
So to be able to say ANYTHING about CV death impact, we need 20% reduction, and to be able to say something DEFINITIVE, we need a 31.5% reduction.
I think everyone here would likely agree that if we get a 31.5% reduction in CV death risk, the overall RRR will be at least that. For the hopelessly curious, see below the p-value that goes with a 31.5% RRR for the primary endpoint:
p = 0.00000000000003
It's possible this could be a hockey stick, where it craps around between here and 4 bucks into the first half of June, and then spikes like a mother the last two weeks of June.
(Like last time.)
This is referred to as a "bought deal" -- the broker bought the offering and is assuming the risk of placing the pile with buyers.
If this had been in the more usual format ("best efforts"), they'd have priced it and just taken a commission (concession), probably in the 5% to 7% range.
It essentially comes to the same thing, economically, since 3.41 is 93.4% of 3.65.
With a best efforts deal, they may have priced it higher (3.70 - 3.75) since they weren't holding the risk. That's the price of getting a bought deal.
JL -- while I do not agree that they needed more money now, at these prices, and I maintain that this is a (perhaps mild) bearish signal, I do agree with the price trajectory you outline into the R-IT results.
In the simplest terms, even if good results from R-IT on CV deaths (p < .01, call it) is a coin toss, that should mean a price of at least $8 before the announcement. Because if it fails, it's worth $1, and if it succeeds on these terms, it's worth at least $15. The average of those two is $8.
See everybody?
See how it's possible to respond rationally, add some counterpoint, agree in some ways and disagree in others?
This is what a chat board is supposed to be.
You guys don't deserve AVII77.
But I do. Thanks AVII.
Jesus, dude, just stop
This is like me trying to explain that too much peanut butter ruins a PB&J, and you telling me I'm a peanut butter racist.
This does not signal that management thinks R-IT will fail. It's not binary. A rational investor tries to calibrate confidence.
Can we please have an IQ test going forward on this board? Nothing severe -- just three digits required to go on rants or attack balanced posters?
This nitwit cheerleader/rabid schnauzer thing bores the crap out of me.
If you think the chances of an R-IT failure are at the meteor strike level, you're smoking something.
Before 9/30, results will be out. If they're good, the stock goes directly to at least $10. Probably higher. They could then do a secondary at a much higher, much less dilutive price.
You are saying they don't have 8 months of money right now. Is that true? If they don't, I'm wrong. If they do, then this is hedging bets. It's making sure AMRN survives an R-IT failure.
Oh stop
If I have a dollar, and borrow another one from my dad, and then go to the candy store and buy a one-dollar candy bar, which dollar did I spend on the candy.
That these investments will be made, I have no doubt. Management isn't "lying". Do they put red x's on the funds from the secondary and say, "Spend ONLY the red x dollars on the investments we listed"?
It's not about what they will spend money on. It's about how much they needed, at what cost in equity, at the moment.
It's embarrassing to have to respond to these eighth-grade-quality questions and rebukes.
Like I said, this is something I might well have decided to do myself were I running AMRN.
It is absolutely true that, if R-IT fails, and it could -- I don't think it will, but it could -- then this company would be completely on the ropes, and they'd be required to do a huge dilutive raise at $1 or so.
It's risk management, and good management teams tend to lean to the risk averse side -- for a lot of reasons, some corporate, some personal.
As I think more about it, I guess I have to concede that this was more likely than I thought it was (i.e. it was completely off my radar).
If they were SURE R-IT will succeed, they wouldn't have done it. They're not sure. But then again -- no intelligent person is SURE.
This isn't insidious biowreck -- it's not "pigs at the trough".
This is an effective management team. I've been cheering from the sidelines for years now. They've made lots of good decisions, and have kept this boat in solid sailing shape through stormy waters.
What this offering says it that AMRN management, like AVII, are "cautiously optimistic". They believe it is possible -- not theoretically, but practically -- that R-IT will lay an egg.
But they believe in EPA anyhow, and this offering will permit them to regroup and refocus if R-IT fails.
It doesn't make them horrible. If I were part of ARMN management, I might make the same decision. This isn't about laying blame -- it's about reading signals.
I agree that dilution is not the issue here, in the grand scheme of things...
It's the signaling. AMRN does not need the money. It is hedging its bets in case REDUCE-IT fails.
The stated uses of the money are BS. They have enough money, easily, to do all the things in anticipation of R-IT results, and if R-IT is a success, they could raise twice what they're raising now with tiny, tiny dilution.
It's a bearish signal. It's not a conclusive bearish signal. Rational investors take that into account in calibrating this play. And belittling that reaction is bad form.
Technically it isn't legal (Rule 105 prohibits short selling five days before the prelim prospectus release), but the SEC has been turning a blind eye to this crap forever.
In addition, if you just sell existing shares to replace them with cheaper ones, it's MUCH harder to detect.
This is participants in the offering shorting at current prices to lock in a profit over their buy price
SOP in the small biotech world -- legal insider trading
Total shocker, IMO
If you're looking for bearish signals -- here's a big one
This isn't about gearing up -- it's about hedging their bets -- extending the corporate runway in case R-IT is disappointing
Super duper NOT a fan of this decision
I am also "cautiously optimistic".
I'm also "lazy", "reckless", "impulsive", and "looking for a short cut out of the rat race".
As a result, I am "heavily overinvested", "way out over my skis", and "once again likely to get my face torn off".
This is the kind of exposure that happens to people who are "incapable of learning anything from experience".
Need some help
Anyone have any good coping mechanisms they could suggest?
It's going to be at least six months of thumb twiddling and yippety yapping until we get results.
I could go nuts in the interim without a good technique.
TIA for any suggestions.
xo
TGW