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Shaking out the last of yesterday's day traders before heading higher, it's like trying to kick shit off of your shoe before continuing on your journey.
I joke... some of my best friends are day traders.
Dude, if these guys have what they say they have - a new way to treat autoimmune disorders almost across the board - then this is going to be a $10B company ($75 per share or so, fully diluted) within 24 months.
And if, during that time, it turns out that they also have what they say they have in Antisense (and they've been pretty clear that they believe they have it) then it will soon be many multiples of that.
The sooner you're in, the better. Likely by a lot.
Not even close. I happen to have that one bookmarked so I can remember where to find it. Happy to help though.
Healey, check the link below, p. 25, in the paragraph that begins (in bold) "we have two significant shareholders." It's an 8K filed on Feb 7, 2014. There are several distinct docs in this filing, and maybe more than one p25. Just use the "find" function on your computer and type in Baker.
This paragraph describes two sets of appx 20mm warrants, each exercisable at a different price - but fundamentally pre-paid.
The other significant shareholder is Pillar Investments, which has representation on the IDRA board, and which is operating under a similar (4.9%-19.99% voting rights limits) agreement with the company regarding their holdings.
http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001193125-14-035495.txt&FilePath=\2014\02\05\&CoName=IDERA+PHARMACEUTICALS%2C+INC.&FormType=8-K&RcvdDate=2%2F5%2F2014&pdf=
Here's the link to prospectus describing Baker Bros warrant deal. Note that they (as is Pillar) are entitled to be paid for their entire 40mm share + position in the event of a takeover.
This was set up - it seems to me - both to limit the power of these two major holders, and also as some protection against a takeover before the company can fulfill its true value.
The only downside that I see here is that while these are warrants, they are essentially, if not exactly shares in existence, so you need to figure market cap based on something more like 150mm shares, rather than the 70+ million "common shares" outstanding. But we can worry about that later, after the exposion.
See pages S-44 through S-46 for the warrant/Baker stuff.
bit.ly/1gbyl7T
And here's the full link, just in case the above ceases to function.
http://ir.iderapharma.com/phoenix.zhtml?c=208904&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTkzNjQ0NDEmRFNFUT0wJlNFUT0wJlNRREVTQz1TRUNUSU9OX0VOVElSRSZzdWJzaWQ9NTc%3d#supprom668677_9
Hi Seel. Let me assure you that despite the decrease in the number of actual voting shares owned in the 4th quarter of 2013, the Bakers have done nothing but increase their stake in this company over the course of the past 9 months (covering three secondary offerings.)
The Baker Brothers own a combination of 3+ million (voting) shares and 40,000,000 pre-paid warrants that, if exercised, would give them a 40% ownership stake in IDRA. The warrants are pre-paid, meaning, for example, that in the last offering, instead of paying $4 per share, they paid $3.99 per warrant, with each one exercisable for a penny.
The Bakers are operating under an agreement with IDRA'a board to keep their common stock (voting rights) under 5% of the company. They would be allowed, with 60 days prior written notice to the IDRA board, to exercise enough warrants to own 19.99% of the common shares (voting rights) of the company, but never more at any one time.
This means that the Bakers, in an effort to own as much of the company as they can at this early stage - while staying on good terms with the board (two members of which are part of Pillar Investments, the other major IDRA stakeholder, which is operating under a similar agreement) that they were willing to tie their money up in the company in a very illiquid arrangement. They will not be able to unwind this investment quickly under any circumstances. This is a hugely bullish indicator.
The arrangement is noted by the company in one of the February 5th SEC filings, which you can look up (I'm too lazy right at this moment to go find the link... apologies, but it's late.)
If you total up the value of their stock and warrants, you will find that IDRA, despite its tiny size, represents the Bakers' 9th largest holding by dollar value.
The Bakers are all-in on this. You just have to read the fine print to know that. Don't let anyone frighten you by pointing to their sale in the 4th quarter (which they did in exchange for warrants in the last offering in order to keep in compliance with their agreement) and try to convince you otherwise.
Actually, the way I interpreted "we will be able to discuss that over the next few days" (about the orphan autoimmune targets) was that they would be able to discuss it *publicly* in the next few days. He's been clear in all of his presentations that they've been discussing and analyzing this decision in-house for months now.
In fact, back in November, at Piper Jaffrey, when he talked about choosing their initial orphan autoimmune targets, he said that they had been getting a lot of advice from "someone from Genzyme". Since Geraghty was already the CoB at that time, my guess is that it was Goldberg - pre board appointment - who had been helping them on this. Based on his resume, that kind of thing should be right in his wheelhouse.
So again, my interpretation of "able to discuss this" is that they will announce it. I'm pretty sure their discussions internally have been ongoing.
Hi Canoe,
Yes, we're waiting for news on IDRA's two orphan disease targets in the autoimmune space, as well as results from their phase 2 psoriasis trial - which they're positing as simply a proof of concept in autoimmune, since they don't intend to even use IMO-8400 in psoriasis (they've developed IM-9200 to partner off in the large autoimmune indications.)
Last Weds at Cowen, Agrawal said that the orphan targets would be revealed in "a few days" so I assume this week, either prior to or in conjunction with their quarterly call on the 13th. The phase 2 results "by the end of Q1" could come at any time.
I'm not sure if (or why) the announcement of their two orphan AI targets will move the stock, (though the pps is so tightly wound at this point, it probably will) since they've been clear for some time that they'd be making decisions on this. They have also made it clear that they expect to be in the clinic in both indications by Q2, which makes me think that they'll not only announce their targets, but perhaps already have the outlines of their proposed trials - end points, duration, etc. - and give some info on those as well.
Making these announcements now, rather than waiting, speaks to a great confidence in the outcome of their proof of concept results, which they've almost certainly had in hand - at least in relevant part - for months.
Hope this helps.
I'll be happy to call this a double bottom at $5.61. Seems about time to resume the climb, don't ya think?
I'm pretty sure that he said that they'd be announcing their two orphan autoimmune targets in the next several days - and that they'd be enrolling clinical trials in those indications in the 2nd quarter.
I'm having trouble believing that the psoriasis data - even though there will be data for a higher dose cohort yet to come in Q2 - will be anything short of excellent. But to tell the truth, I'm so convinced that these guys know they have something, that if the P2 data is disappointing, I'll be looking at that as an opportunity to buy more.
IDRA will release Phase 2 data on March 4th.
Hello all. I've been thinking a lot about this, and I have a theory.
The Cowan and Co. 34th Annual Health Care Conference in Boston is a biggie for biotech, and particularly for the Boston/Cambridge biotech community, which is among the best and most important in the world. Idera's been part of that community since the very beginning, and has probably been at all 34 of these. Cowan was co-bookrunner for Idera's most recent offering, and it is being held in Copley Square, about a mile from IDRA's front door. This is their home biotech conference.
IDRA will show up to this conference - where they'll know nearly everyone in the room - as the fastest growing biotech, year over year, of any company in Massachusetts, with a brand new high-visibility (Genzyme) management team, and loaded to the gills with new cash, bestowed upon them largely by the Baker Brothers, the kings of biotech finance. They're speaking in a prime slot (10am). This is a coming out party for the new IDRA, in front of friends and colleagues.
If I'm IDRA, and I have good data in hand, my schedule is thus: Team meeting and prep on Monday, 3/3. Data release and media on Tuesday, 3/4. Presentation (and coronation as the hot new/(old) thing in Boston Biotech) on Weds, 3/5.
The company has promised date by "end of Q1" and the day before Cowan is the perfect day this quarter for the release. The trial was 12 weeks of dosing with 6 weeks follow-up, and it started in July. They've had the data completed for weeks and weeks by now. Housekeeping's over, New management is aboard, $ has been raised, preferred shares have been redeemed, funds have reported, and now a chance to reintroduce and launch their shiny new-look company, right in their home stadium. There going to do it with their proof of concept data in hand.
I'll be shocked if they don't
No, it was published today. Just an idiot, apparently.
The whole thing is worthless and wrong, just in case the fact that they couldn't figure out that this company's been public for years didn't tell you that.
Clearly, the Bakers wanted to grab more stock in the offerings, and thus own more of the company, than the IDRA board was comfortable with. Owning 40 million warrants with the restrictions attached (stay below 5%, except with 60 days written notice, and even then stay below 20% as a condition of the warrants) represents a neat, and also very bullish way to get huge leverage on the shares without becoming seen as a hindrance to corporate governance.
Given the Bakers' history, they'll likely wait until the stock is way up there (I think they've finally been selling some PCYC at well over $100,) sell some of their actual shares, and then re-up to 4.99% by exercising a portion of their warrants. Wash, rinse, repeat. My strong suspicion is that they'll dilute and divest slowly and carefully.
To lock themselves into such an enormous (large, even for them) illiquid position is a remarkable show of confidence. But if you know anything about the history of this lab, you know that it won't be surprising if they end up changing the game in the autoimmune field. I have a strong feeling that the Bakers know what they're doing here.
The nice (and very bullish) thing about the warrants is that they're essentially illiquid. Baker Brothers have contractually agreed to stay under the 5% ownership level, and the warrants (which, if exercised, would give then better than 40% ownership) allow them to do that, while taking a much larger stake.
I believe that the deal is that if Baker Brothers wants to exercise warrants that would take them over 5%, they need to give the company 60 days written notice, and even then, at no point will they be allowed to exercise warrants that would bring them over 19.99% beneficial ownership.
This is about a very large and very savvy holder looking to grab as much IDRA as possible, and a very confident, very savvy board making sure that they don't get acquired before they fulfill their promise.
The fact that BB has locked itself into (remember the warrants are largely pre-funded) what is now around a $180 million investment in this small biotech with very little in the way of an escape hatch is mind-bogglingly bullish, IMO. I have a feeling that they believe there's some science here.
Baker Brothers now own 40 million IDRA warrants.
These are mostly pre-funded warrants (exercisable for a penny) meaning that the Bakers already paid for them like shares. They were acquired over the past three secondaries (all in 2013.)
They are working under an agreement (it is a condition of their warrants) that they not hold more than 4.9% of the company's voting stock.
If they exercised them all, The BB's would own well over 40% of the company.
Even more bullish than that, they are the only IDRA warrants that exist. There is no liquid secondary market for them, and again, conditions prevent them from exercising more than a fraction at a time. This is a very, very bullish bet on IDRA by the Bakers.
You can find this info in IDRA's most recent 8K.
Check the last 8K. Baker Brothers not only own 5 million shares of IDRA, they own more than 40 million pre-funded warrants If exercised, they would own nearly 50% of the company. They are operating under an agreement with the company (it is a condition of their warrants) to limit their voting shares to 4.9% of outstanding.
Sorry, dude, I phrased that reply poorly. I was agreeing with you.
Seriously. I find it brazen and amazing that the MM's and large holders play these kinds of games. But when I see the panic that sets in, and all the retail guys on message boards talking about how they're spooked and getting out, I realize that shaking loose shares on a stock that is about to blow up is an easy and very profitable little angle for these guys.
If you really think - based on what we have seen here - that something dramatic has changed between last week, when everyone involved including IDRA's senior management doubled down on this company, and today, then you truly don't deserve to hit a ten, or twenty, or fifty-bagger.
I just wish I had more dry powder to buy your shares at this price.
IDRA is falling because they want your shares. And, particularly, they want to shake loose your shares if you're one of the big Jaffray or Cowen clients who doesn't know the company, but got a piece of the offering last week at $4.
Hang in, or, better, buy more.
The top management and money guys in biotech have not all pushed their way in here over the past six months because they're going to shit the bed. These guys could fart and the valuation here will go to $1B, which is $15 per share.
THIS IS A TEST
The current price action is a test to see if you know what you own, or if you will dumbly hand your shares over the wiseguys.
Do you know that the company's own management - in addition to their largest investors - just put more of their own money back into this company at $4 LAST WEEK? Or that that management is among the best and most experienced in the industry (and just sold a $20 Billion company), and that much of that management has just come on board in the past few months? Do you know that this company has been working at this science (and earlier iterations of this science) since the 1970's? That they've been trailblazers, with a ton of patents, and an intellectual lineage that reaches the earliest stages of some of the most exciting biotech science around? Or that in less than a year this company has grown 10-fold in market cap, and in the past six months (since their last clinical trial results) they've gone from under 5% to more than 50% institutional ownership? Do you know that if their technology can do what they say it can do, they will be one of the largest biotechs in the world, while right now you can buy in at a $300 million valuation?
If you don't know this, then perhaps $4.50 will scare you out of your shares? No? What if we can push it down to $4.25? What about $4? Will you sell your shares to us then? Huh? Will you?
Pass the test, and you get to ride the rocket.
So, do you know what you own?
Could IDRA partner with CELG?
I'm clearly jumping the gun a bit here, but looking at the horizon for potential partners for IDRA in larger autoimmune indications, I keep coming back to Celgene.
1. CELG has experience partnering in the TLR space - see their deal with Venti-RX. http://bit.ly/1nB3G77
2. CELG has been very aggressive and creative in partnering with development stage biotechs, and IDRA - given their unique focus on orphan indications, and thus less need for a huge up-front payment - seems a great fit for a creative deal.
3. CELG is actively looking to expand their autoimmune franchise.
It's just a thought, but I wouldn't be surprised.
It's pretty clear that there's been accumulation going on, a couple of small-ish funds have reported already, and it'll be interesting to see where ownership stands in a couple of weeks.
Getting the Band Back Together
As far as I can tell, the CFO, the CMO, the Chairman of the Board, and at least one other member of the BOD of Idera are all Genzyme veterans. And not in the trenches, they were senior management. Genzyme, of course, went from nowhere to a $20 Billion buyout by Sanofi. The last two guys to join the management team, Brenner as CMO and Goldberg as member of the BOD, came on board IDRA within the past month.
These guys, working together, have already taken a company to the promised land. They know the science involved here, and they know what success smells like. The fact that a group of them are coming together around this tiny, clinical stage biotech speaks volumes to me as an investor. The fact that Brenner and Goldberg joined the company so deep into the Phase II psoriasis trial (their door into the autoimmune world) is as much confirmation as I could hope to have before seeing the results for myself.
You don't get the band back together - particularly a band that's already played stadiums - unless they know there's something special happening. These guys know each other, presumably trust each other, and have scaled a mountain together. And now they're re-uniting for IDRA.
And moreso than even the long-term management, the additions of Brenner and Goldberg, on January 9th, tells me that the Psoriasis trial is going to be a big success. Think about it. They finished enrolling in September, it's a 12 week dosing schedule. In the phase 1, they said they saw nothing for two weeks, and then dramatic improvement in patients. So certainly, by the end of the year, they knew what they were looking at in the Phase II. Yes, it's double-blind, but this is plaque psoriasis, the results are literally plastered across patients' skin.
Now, if you're Goldberg, and especially Brenner - coming on as CMO - and could pretty much name your next job, why would you commit the next phase of your career to a tiny biotech that's WEEKS AWAY from the results of such an important trial without knowing how it's going to turn out? Particularly if you're negotiating the terms of your deal, including options strike prices, which are based, I'm sure, on some formula working off of the current stock price... if failure in the trial (WITH RESULTS JUST WEEKS AWAY) will undoubtedly tank the price. Wouldn't you - on both counts - at least wait for the results? These are guys with decades-long connections with the Chairman of the Board and the CFO. Do you think that if they asked for 30 days that the company would have moved on to other candidates? That's silly.
To me, it seems obvious that double-blind or not, top management had a pretty good idea by the first week of January whether IMO-8400 was working, and I would be shocked if these two guys signed on in the dark. For Brenner, particularly, doing so and being wrong - just weeks later - would be the biggest mistake of his career, and one that I highly doubt he would risk.
I have done my due dilligence, but I'm not a scientist. And even if I were, it would be unlikely that I'd be a scientist on par with these guys. Seeing them come together, and seeing a stock that was selling for 20 cents this past year, now with 40% institutional ownership, is more than enough for me to put my money on this company. Nothing in life is guaranteed. But this, to me, smells like a winner.
The stock had finally and deservedly exited its downward channel. It was starting to run and threatening to break out. With that momentum, even moderately good news at ESMO might mean the shorts never see $20 again.
Suddenly the new "short thesis" appears, predicting not just failure, but the early stoppage of EPIC for safety reasons. It's a dirty drug, don't you know.
Ridiculous though it was, in a nervous market, in a stock that's itself made a lot of people nervous this year, that was all they needed to get out alive.
When they put something like that together, it gets distributed in concentric circles. The first people they tell, their closest associates, it's to let them in on it. From there, it's a tough call whether they scare up more sellers from among those who think it may be true, or those who want to pile on, or just get out of the way because the shorts are attacking and the stock is going to get hammered for a few days. In either case, it doesn't matter to the end result.
Feurstein reporting it to the public is like day 4 of this process. Anyone who sells at that point is giving shares away. I think today ended it, and we get a strong couple of days into ESMO.
Hmm, sounds like multiple analysts don't like the EGFR #'s. At least from twitter chatter.
Our old friend Don Shimoda points out that the numbers are too small to make any determination. There were only 3 EGFR patients who would have qualified for the phase II, and two of them had stable disease, and another left the study before they could be scanned.
Sigh.
The Iclusig data looks tremendous. Imagine getting that kind of deep, lasting response in a population for which absolutely everything on the market had already failed.
113 is interesting, and tough (at least for a non-scientist like myself) to make a judgement based on the small sample, last-ditch patients, and huge range of dosing. There's also considerable competition in the ALK space. Hoping that brain mets and tolerability prove difference-makers. Also that they are right about the t790 mutation in EGFR. Finally, i thought that the abstract posted here yesterday on the surprising prevalence of RET in NSCLC was interesting. I wonder if Harvey will mention that tomorrow?
In the meantime, I have hope that the fast-growing case for Iclusig as a blockbuster drug may be enough to start scaring the shorts away from the stock. The bear case on the drug is getting less plausible by the day, it seems.
Very pleased that we stopped following the market down while still above the 50MA and held that level easily. A very bullish signal, methinks, on a day with more than 8mm shares traded. Clearly, some very deep pockets believe that there's (finally) a floor under this thing, and that coming news... EU, ASCO, will provide a tailwind.
Let us hope.
Meanwhile, macro notwithstanding, a great sign that even as the market and the IBB went from soaring green to significant red, ARIA has maintained most of its gains on the day, and in particular, has not re-tested the 50MA at $18.17, which it blew through this morning.
Let's hope that the market has a little bit of run left, and can get us at least through ASCO (and that the data is as promising as we expect) and Euro approval, which should provide us with some support, even if/when the market corrects.
Was definitely not expecting the second death, but not surprising that the market - spooked as they have been by the recent manufactured "bad news" and subsequent price deterioration - rushed in with sell orders. This despite the fact that everything else in Ariad's abstracts looked strong. (See BMO's take on 113, along with good news on the CV issues in Pona.) This morning's 5mm shares, and the bounce (hard) off of $15.35 looks like capitulation from here. My guess is that large players are scooping up shares this morning.
Very encouraging that we're $1.35 off the lows as I write this, and down just .43 on the day. Not impossible that we close green, tho a strong bounce in the macro biotech market would help that.
I hope the shorts have had their fun.
I have to believe that as cooler heads prevail, we'll come back over the next couple of weeks heading into ASCO. Looks like there's lots of good news coming in those presentations. Hopefully, the additional six months of 113 data look as good as BMO believes it will.
Picked up some June and August 17 calls this morning.
Good luck to all.
Two sudden deaths?
Seems like Harvey, this week, strongly hinted at very positive ASCO data, and also (if I heard him correctly) that there would be at least some positive news in the abstracts themselves.
Guessing that we probably do fill this gap at 17.23, but that we don't fall much below that, and may in fact turn around right there.
Hang on, it's a bumpy ride back up, but I'm wagering that up is where we're going.
Thank you, 2da. Appreciate the work you put into this.
I think that Citi's Ariad note this week was dead on. The current pps both undervalues Iclusig, and fails to value 113 almost entirely.
I look at what Celgene has done/is doing with Revlimid, continuously expanding its label, finding appropriate combinations that become standard of care, and further tweaking and improving the science so that by the tiime it's off-patent, it's likely to have already been made irrelevant by Celgene's own advances with the molecule. At the same time, they have broadened their pipeline with other blockbusters, and continue to look to the future with first-rate clinical candidates and smart, aggressive targeted acquisitions.
CELG longs have waited a long time for the moment they're living right now, and the future for that company is as bright as any biotech in the world. Harvey has, in the past, mentioned Celgene as a model for what he hopes to to with Ariad, and I believe that he, and they, are on track, even if there have been some bumps in the road, price-wise.
As to the price, I would think that we're nearing the bottom here, though I don't think we've seen it today, just because there hasn't been the kind of volume and bounce that one would expect. Should be very soon though.
Hope everyone is hanging in. The future looks bright from here. And thanks again 2da, and everyone else who puts work into this board to keep us all informed.
$ARIA Iclusig weekly (NRx) fell slightly from 41 to 40 this week, while total prescriptions (TRx) were down 19% - consistent w class.
Via @ianestepan on Twitter.
point taken.
Nice to see no panic selling of ARIA in the midst of the macro slide today. Guessing that the crazy is out of our system.
Market was due for a bit of a blowoff, and China data provides some impetus. Wouldn't be surprised to see this correct down to 1500-1525 on the S&P, at which point, I'd be looking to add ARIA, and also CELG.
Thanks Homebuilder for sharing. Looks like steady as she goes on the launch. Hoping ASCO gives us a little more useful data on safety.
What's to stop JMP, or JPM, or BMO, or another firm friendly (or even neutral) to ARIA from running their own survey of (more than 13) Leukemia docs and putting out a report on their findings?
This would seem the perfect way to put the bear case to rest, no?
Might there be someone on this list who owns a fair amount of shares through one of the big firms? Would you ask to speak to the analyst that covers the company and make a recommendation that they do something like this?
I would think that such a survey could do a world of good here.
Ariad's Legal may not have cleared Harvey's last answer ("If I could buy right now I'd buy as much as I could... but I can't because I have inside information") but I have a feeling that Harvey put the question in the que himself.
It came from BMO, one of Ariad's friendliest analysts, and it came as the final question of the call - very dramatic, no?
Harvey was clearly on a mission this morning. They slandered his baby, and, proud papa that he is, he wanted to lay the smack down.
I think he did a pretty good job of it.
IIRC Harvey was on Cramer's show - and Cramer was pumping the stock - a couple of days before the stock began to tank, or right around that time.
I firmly believe that Cramer's purpose was to bring in buyers to make sure that he and his friends could begin shorting at the highest possible price before they started to take it down.
in the second part AF has a rebuttal from a named, respected analyst
They won't be taking questions. Says to me that while Harvey knows he needs to address the issue, he doesn't want to lend the hit job credibility by engaging in a back and forth over it.
My take.