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Jess -- I'd be more than happy if you are correct and I am not.
I'd "speculate" that a buyout is the most likely cause for the pause.
All my reasons are just guesswork. But to express my main reason... Denner.
I just think he is a man in a hurry. He probably has better things to do than talk to BP about "risk assessment" for pona etc. Just my sense.. he wants to sell and move on (Ariad a large part of Sarissa assets). I have seen a report on another board that an $18 offer has been on the table for some time. Maybe he can save some face, show his muscle and get us $20+.
Apologies if this has been posted before.
From the Stifel Report re ASCO
ARIA (Buy, $8.89) - Updated results for brigantinib in ALK+ NSCLC should help derisk the ongoing registrational ALTA
trial; in par ticular we highlight this agent's compelling clinical activity in patients with brain metasteses, which we believe
could help to dif ferentiate brigantinib from other second-line ALK-targeting agents (Zykadia).
Ariad's molecule that it sold to Bellicum was a foot in the door. It provided a brake for the immunotherapy process which has a tendency to go rogue, kill cancer cells faster than the body can aborb, and threaten the patient's life.
Ariad needed cash and Bellicum provided $50 million. So Ariad is now out of the picture. To be fair, the race to find a good brake for this process has a crowded field. The favorite right now may be the Ziopharm's (with its XON relationship) rheostat which allows the process not only to be stopped but to be moderated and to be re-started as well.
Immunotherapy seems poised to replace chemotherapy in many settings. We will see.
Yes 2da. I totally don't understand what to make of it and how much of a comparator it is for Ariad.
But I have to expect that Denner completely understands.
GEVA -- $8.4B ($230/share) buyout by Alexion. Zero drugs on the market. One drug fast-tracked. Pipeline of about six more in earlier stages.
http://www.bostonglobe.com/business/2015/05/06/synageva/ilW8ii9OGlN5EtdjDtCPqM/story.html
Do you think Denner may be aware of this?
http://www.investorvillage.com/smbd.asp?mb=16353&mn=17611&pt=msg&mid=14915530
Thanks Timmy...this is not making my theory of an early sale look very good.
"In other Ariad Pharmaceuticals news, insider Timothy P. Clackson sold 123,766 shares of the company’s stock on the open market in a transaction that occurred on Thursday, April 23rd. The shares were sold at an average price of $9.50, for a total transaction of $1,175,777.00. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this link."
Did anyone else find it odd that Denner described biotech as very expensive now?
I would expect him to be pounding the idea that the biotech boom is just beginning. He is a seller after all.
Rum -- Denner doesn't strike me as a man who enjoys waiting around. He is not an investor, he is a fund manager. Sarissa has a large percentage of its assets in Ariad. Until Ariad is sold that is dead money. Funds hate dead money. They thrive on constant growth of returns.
Still I do have confidence in his skill set to maximize the deal at this point in time.
Jess.. You frame the question as taking $20 now or $40 later.
Its not that simple.
Waiting has significant risks --
* the drug could fail in the trial
* the trial could be poorly designed
* competition could produce an even better drug
* new management may make bad business decisions
* macro economics.. the economy could tank again
Take the $20 now while biotech is boiling.
There no longer is any resistance to a sale.
I suspect Denner already has a deal lined up. It could come faster than anyone expects... even before the annual meeting.
"Everyone has a plan 'till they get punched in the mouth."
----Mike Tyson
Big pharma business model is now M&A... surely Dr.D is playing this card, while Dr. B has the baggage of history.
http://www.forbes.com/sites/nicolefisher/2015/04/22/are-ma-replacing-rd-in-pharma/?utm_campaign=yahootix&partner=yahootix
113 patent issued.
http://finance.yahoo.com/news/ariad-announces-issuance-key-u-113500459.html
Wonder if recent up-tick in good news and stock price will be enough to save HB's job.
----
Good to see that Seifert no longer thinks of AF as an objective source.
Big rush into $9 calls that expire Friday.
I spotted him sitting around a conference table in one of the scenes.
Still your point is a good one. The cult of personality has perhaps been shattered.
At the 3 minute mark the speaker says, "I think we are still at the beginning..."
I know I am taking this out of context, but still that is not exactly what I want to hear.
For anyone who has been here for years, this video is just moronic fluff. My opinion.
How about a video about their top-secret new molecule that we were supposed to know about three months ago.
I thought it was interesting that Gleevec and Ponatanib were the only two drugs discussed as serious advancements against CML.
I am reading a fascinating book, "Unnatural Selection" by Emily Monosson. It is a discussion of how evolution has influenced the development of the major genetic challenges faced by our immune system... bacteria, viruses, cancer etc.
In the chapter on cancer she discusses CML at length, the miraculous development of Gleevec and the subsequent rise of resistance.
Then came this paragraph..
"Fortunately, thanks to a better understanding of the common paths of resistance evolution, there are now emerging generations of alternatives to Gleevec that may manage resistance effectively by addressing them from the beginning. There are fewer side effects as well. Even for CML with a mutation called T3151, which has conferred resistance to almost all previous targeted agents, a new drug, ponatanib, holds promise. 'It's been a desperate search for something that would address these patients,' says Amir Fathi <academic oncologist at Mass General and Harvard Medical School>. 'Because they don't respond to imatanib, dasatinib, nilotinib--name your ib' .
Patients with highly resistant mutations have needed stem cell transplants, since their disease is a challenge to get under control, explains Fathi. Just approved by the FDA, ponatanib may hold promise for highly resistant forms of CML too, providing long term remissions in previously challenging clinical scenarios."
483
Hoax? No. A hoax is a good-natured practical joke that may result in some embarrassment, but no real harm.
Fraud? Yes. This was intended (and probably did) to cause real financial damage to Ariad shareholders and management. I hope the perpetrator is held to account.
Here's an interesting chart.
http://www.investorvillage.com/smbd.asp?mb=17701&mn=1520&pt=msg&mid=14731445
Note that AbbVie paid a 29x multiple of annual revenue. That is very high, an outlier. (Especially high since they only bought 50% of the main drug revenues) But the chart can give you some perspective on possible value for Ariad.
First of all you should know that Abbie only bought 50% of the drug.
http://www.thestreet.com/story/13068252/1/abbvie-spending-historic-amount-of-cash-to-buy-half-of-a-cancer-drug.html?puc=yahoo&cm_ven=YAHOO
Will somebody please introduce Abbie to Dr. D. We own 100% of our cancer drug... with two more on the way.
I have been fortunate to find myself invested in a biotech, ZIOP, that is on a huge tear.
I only mention this here because there is a poster on their thread, JSPeterman, who keeps making comments and predictions about Ariad. Here is his comment today:
http://www.investorvillage.com/smbd.asp?mb=16353&mn=13316&pt=msg&mid=14704488
If you search his comments on that Investor Village board and note the dates, you will see that he seems to be amazingly accurate. I have no idea why he puts his Ariad comments on the ZIOP board.
Greg -- Good post. But one more thought.
Its commonly said that the market anticipates events by 6-12 months.
The head of an activist hedge fund has certain unique skills. He is knowledgable about the pipeline/science and a great salesman. Using this skill set he can theoretically advance the anticipation period to perhaps 24 months. Thus he/we can realize additional value without waiting for the milestones. Well, that is my wishful thinking....
Sounds like a plan.
Ariad now 31% of Sarissa.
http://www.insidermonkey.com/blog/ariad-pharmaceuticals-inc-aria-quest-diagnostics-inc-dgx-amgen-inc-amgn-sarissa-capitals-top-stock-picks-and-new-moves-339419/
Hedgies get antsy. They make money turning things over. If Denner wins the battle it won't be long before a sale. He won't have the patience to achieve milestones and enhance value. That would be a risk. At $15-20 he will be making a very nice 3x-5x. You can bet he is already planning his next investment... so much happening in biotech, he can't wait on the sidelines.
If HB decides discretion is the better part of valor, the whole thing could be wrapped up by the annual meeting. I'm guessing he already has several offers he can pounce on.
Just my opinion.
I don't think this goes to the AM. If you have observed HB over the years, you can see that the flash crash has taken a physical toll. I'm guessing that he is just not up to the fight.
A soft and lucrative landing might sound pretty good to him.
CEO Emeritus etc.
Denner has a lot of Sarissa tied up here and he has already waited too long to turn the investment over.
I'd guess he's in alliance with some other big holders.. Blackrock, Fidelity etc. and they will do the deed.
A quick sale should bring about $15 is my guess. And we will all sort of be happy to escape with profits after all these painful years. Perhaps developing the company for a few more years would bring much more, but that is not the dna of the funds.
I expect a flurry of negative articles. That is what the short side does when it senses danger.
I always thought they had a good cop/bad cop thing going. HB says I'll never sell while Denner whispers to the BP..."don't worry, play ball with me and I'll get it done". Just a way to bump up the price. Apparently I was either wrong or HB did in fact stop playing the game. That interview about a month ago when HB stumbled over the question of Denner should have told us everything.
Should be interesting to see if Denner has the muscle to get this done. A few years ago I would have said no. But, to be honest, HB does not look to me now like he has much fight left in him.
Its good for our stock price... but, kind of a sad day for the man. (and don't get me wrong -- I don't forgive the management mistakes)
Rum -- You sure know how to ruin a cup of coffee.
Unfortunately, you may be right. Three years is a long wait with dead money. There are a lot of "ifs" to achieve before profits.
Harvey had some help. Denner's figerprints are all over this release.
Some questions about 788.
Does it address the KRAS mutation? Hope so -- that would be big.
What does the release mean when it says "This compliments our earlier discovery of ridaforolimus... and rimuducid" ?
Are they just saying that their lab is still churning out TKIs?
BR -- Don't worry about a sales team. They have a force of 21 vice presidents ready to roll.
Amp -- Excellent post.
To your pt. 4 -- In the discussion of the current tragic news from Paris it has been noted that the lives of journalists have been devalued because of social media. Politicians, bad guys, terrorists etc. do not depend on the traditional press any longer to get out their message and therefore don't mind killing a few journalists.
Its a strained metaphor but this is what has happened with the FDA's punishment of Ariad. Oncologists and patients used social media to reverse the ban. The internet removes dependency on the FDA and the traditional medical press for information. Docs and patients can see for themselves the benefit/risk calculation for Iclusig and they do not need to rely on the FDA for final guidance.
If you have an 80% risk of mortality from the eventual failure of traditional drugs and 10% risk of immediate death from Iclusig, but 90% chance of substantially extended survival... I know which I would choose.
Seller's market for biotech office and lab space in Cambridge -- Ariad's sublease seems quite valuable.
http://www.bostonglobe.com/business/2015/01/06/out-state-biopharma-employees-face-tough-choices-massachusetts-poaches-research-jobs/KRr9oY0WPh9hNkpkjkNwvL/story.html
Jess
That is not the way I read the release...
"The agreement provides for Otsuka to receive exclusive rights to market Iclusig in Japan and nine other Asian countries (the “Territory”) in return for an upfront payment of $77.5 million to ARIAD, a milestone payment upon regulatory approval in Japan for patients with resistant and intolerant Philadelphia-positive leukemias, and additional milestone payments for approval in other indications. "
It sounds to me like the already have an agreement in place for milestone payments if other indications are approved. I see this as a positive. The deal is already negotiated.