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The Chuckle That Lifted The Veil
The Chuckle That Lifted The Veil 0 comments
Sep 20, 2015 6:10 PM | about stocks: XON, ZIOP, HALO


This past year, I have taken a very clear and unequivocal bull stand on Ziopharm...(I don't know why the company insists on spelling it in all caps, ZIOPHARM...) I have written numerous posts on the company, waxing superlatives...and at the same time, have also expressed my frustration(s) at the company's very perplexing and odd stance on keeping a lid on news...and folks, we are talking good news, like very good news..Furrowing my brows over the past 6 months has aged me 10 years as I have been dwelling over the management's penchant for secrecy...However, I now have a theory which I'll share here in another blog post to be titled: The ZIOP Conspiracy Theory...

But I digress...

In all my previous posts on ZIOP, and especially the one I collaborated with RobCos, the 101 Reasons to Own Ziopharm Oncology (NASDAQ:ZIOP) , I have tried to connect the proverbial "dots" from the crumbs of news that Intrexon and Ziopharm management have thrown around, and have pieced together my investment thesis on the company...But of course, being that ZIOP is a biotechnology company, no piece(s) of news is as important as actual clinical data which trumps everything else...In other words, a significant part of my investment thesis is based on conjecture, even though my conjecture, I believe, is steeped in solid logic...

Very recently though, the company's new CEO, Dr. Laurence Cooper, extricated himself out of a shell that was ensconced in a secret bunker somewhere between Houston, TX and Boston, MA...and well camouflaged, of course...and decided to come out and let the world know why he came out of the MD Anderson closet...and immediately made a beeline for a Ziopharm closet, and keeping himself barricaded inside for the last 4 months...

Kidding aside, not only did Dr. Cooper come out, he came out swinging...I guess, wonders never cease...

At the Wells Fargo Healthcare Conference, Dr. Laurence Cooper, formerly of MD Anderson and one of the world's most respected oncologists, shared with the conference attendees in person and us lowly peons via a live webcast, a pretty detailed and fast paced overview of the company and its technologies...and along with it, he allowed a few snippets of preliminary clinical data to slip out to help satiate some of the hunger that ZIOP investors have been enduring...

In his beautifully lilting, "mummy and daddy" slight English accent, Dr. Cooper gave a professorial style talk that left me, like, WoW! I recommend every biotech investor, not just ZIOP investors, to take 30 minutes and listen to his presentation...it very well may turn out to be the best 30 minutes you will spend on building wealth for yourself and your family...I am serious...Here is the link to the presentation: cc.talkpoint.com/well001/090915a_ae/?ent...

For his powerful presentation, Dr. Cooper used 29 slides to shed light on what the company is doing in the field of immuno-oncology, the hottest frontier in cancer research...Even though almost all of the slides are important and filled with very important nuggets of information, for the purpose of today's exercise, I will highlight only 4...and use Dr. Cooper's own words as he explains each one...I believe that these 4 slides, along with the relevant commentary, should help prove, even to the most diehard skeptic, the validity of my bull thesis on ZIOP...

Before I start, it is important for my readers to know that i) I'm fully vested in the notion that Dr. Cooper is Internationally recognized as one of the top experts in the field of immuno-oncology, ii) that he is universally respected...in other words, there is no reason for me or anyone else to doubt, or question, his words...iii) I've transcribed Dr. Cooper's relevant quotes myself* and have done my very best to be as accurate as possible to ensure that the subtle, and the not so subtle nuances of his talk, are highlighted for the readers of my blog...and if you listen and watch the slide presentation after you read this blog post, you will truly appreciate the significance of what Dr. Cooper said...and finally, iv) all emphasis placed in the quotes are mine...

* I did get some help from a retired brain surgeon, Dr. Ken Tuerk who goes by the handle "duguyisheng." on Investor Village...Thank you, Ken...

So let's get started!

Slide #4: The first "meat" of his presentation was the slide shown at the 2:02 mark:

(click to enlarge)

I will let Dr. Cooper's own words describe the slide:

"So I thought this was sort of a 'compare and contrast' slide because many of you are experts in this area so it is a way for you to look at our company with respect to other companies in this space so I took the opportunity to sort of go down a checklist and you can make the same checklist <chuckle> if you wish when you're comparing other stakeholders in this field."

Let's take a minute to dissect what he said...Those of you who have listened to the presentation must have noticed (heard) that when he was speaking, he had a playful grin on his face, and a chuckle to boot(!): "Many of you are experts in this area, so I took the opportunity to sort of go down a checklist and you can make the same checklist if you wish when you're comparing other stakeholders in this field."

And it is not just what Dr. Cooper said, but also how he said it, that helped decide the title of my today's post: "The Chuckle that Lifted the Veil." Dr. Cooper and Ziopharm finally lifted the veil of secrecy that has surrounded the company since he came on board as the CEO this past May. And with his chuckle, he came as close to cockiness as this humble doctor is capable of, and basically dared the many "experts" in his audience, both in the room and those listening remotely, to compare Ziopharm with every other company in the field of immuno-oncology and see if it is as all-encompassing as ZIOP...With his carefully crafted "checklist" he made it very simple for all the experts to come to the very recognition that ZIOP investors have come to for months: that it is Ziopharm that leads the field of immuno-oncology...not JUNO, not KITE, not BLCM and certainly not the new kid on the block, NK, which incidentally enjoys just about the same market cap as ZIOP! Which of course is preposterous...but all this is about to change, and soon!

Slide #5: (Shown 5:22 minutes into the presentaion)

(click to enlarge)

Dr. Cooper: "So putting all of…what I just <chuckle!> showed you in those check points, together then, you have essentially a whole eco-system of cell-based therapy, you have the viral therapy, we have this platform for genetic engineering based on viral and non-viral approaches and we also have the ability to c-o-n-t-r-o-l essentially the deliverable, using what's called the RheoSwitch, this ligand based system…"

There is that chuckle one more time as he describes ZIOP as having "essentially a whole eco-system of cel based therapy, we have this platform for genetic engineering based on viral and non-viral approaches and we also have the ability to C-O-N-T-R-O-L essentially the deliverable, using what's called the RheoSwitch, this ligand based system…"

Note the dragged out emphasis he put on the word "c-o-n-t-r-o-l" which of course is ZIOP's RheoSwitch technology.

Again, Dr. Cooper fired multiple arrows at the heart(s) of JUNO, KITE, BLCM and NK longs and all those analysts who are bullish on these companies and bearish on ZIOP and let them know that going forward, it is ZIOP, with its "whole eco-system" that will lead the pack in the field of immuno-oncology...

Before I go to the next slide, it is important for those who are new to ZIOP to get some background...One of the clinical trials that ZIOP is currently conducting is for Glioblastoma, a very lethal form of cancer that attacks the brain and in almost all cases is fatal and unfortunately has no known treatment...ZIOP has a unique and important technology called the RheoSwitch, which is administered via a pill called Veledimex...In order for the treatment to work, it is important that when the patient takes the pill, this drug Veledimex should be able to cross the blood/brain barrier and regulate the adenovirus that has been placed in the the brain...Since the RheoSwitch is a very unique piece of technology that ZIOP obtained via its collaboration with Intrexon, it is one of the linchpins of my ZIOP investment thesis...Later in this post, I will share a link to a blog post of Mr. Chad Peacock, the very first patient who this past June was accepted in ZIOP's Glioblastoma trial where he describes this science fiction technology in layman's terms...and why it is so important...

Slide #11: (The Blood / Brain Barrier Slide shown at the 11:50 mark):

(click to enlarge)

"So I think one of the take home points for the community to look for as these data are revealed is this bullet point at the top and that is really this important question: Does the oral drug cross the blood brain barrier? From our mouse models we have every expectation that it would occur and it is part of our commentary later in the year in Q4 we will talk about that data in the human environment. The reason that's important is of course that if it doesn't occur, then the local injection of the adenovirus may not receive the activating signal so obviously that is an important part of the story and it has a corollary…and the corollary is that we are also interested in delivering T-Cells that might be targeting brain tumors and you can imagine therefore that this T-Cell would need to see the oral ligand if its immune privilege in situ, or essentially in the brain. So just to alert you essentially to some of the data that will be coming out in the next few months..."

Let me dissect Dr. Cooper's last sentence, "So just to alert you essentially to some of the data that will be coming out in the next few months..." "Alert" us? He wants to "alert" us to good news or bad news? That he is going to share preliminary results from the Glioblastoma trial which only enrolled its very first patient, Chad Peacock in June of this year, as per Mr. Peacock's blog post (more later). So Dr. Cooper is alerting us to expect some very mundane and boring preliminary results from this multi-center trial which infused its very first patient barely three months ago? As many of you know, a Phase 1 trial's overwhelming purpose is to see if a new treatment regimen is safe...This trial has barely begun so what is the rush Dr. Cooper for releasing preliminary results at the Society for NeuroOncology Annual Meeting in San Antonio in mid November when the trial will be barely 5 months old???

The only logical explanation is that the results from this trial must be so darn good that the good doctor cannot wait to brag about it! Remember, this is Phase 1, 'open label" trial, which means that the results are not hidden like in blinded or double-blinded trials...in Phase 1, the primary focus is on safety, not efficacy...For Dr. Cooper to "alert" his Wells Fargo Conference attendees to the interim results due 2 months out means that the data must be pretty astounding...

There is further corroboration provided by none other than the FDA...Last month, out of the blue, FDA bestowed Orphan Drug Designation to ZIOP for its Malignant Glioma treatment:

http://www.accessdata.fda.gov/scripts/opdlisting/oopd/OOPD_Results_2.cfm?Index_Number=486015

Generic Name: Adenoviral vector-RheoSwitch Therapeutic System-human interleukin 12 + veledimex
Trade Name: n/a
Date Designated: 07-23-2015
Orphan Designation: Treatment of malignant glioma.
Orphan Designation Status: Designated
FDA Orphan Approval Status: Not FDA Approved for Orphan Indication
Sponsor: Ziopharm Oncology, Inc.
One First Avenue
Navy Yard Plaza
Boston, MD 02129
The sponsor address listed is the last reported by the sponsor to OOPD.

Note the date of the designation: July 23, 2015...in other words, just 1 month after Mr. Peacock started treatment...

For those wondering the difference between Glioma and Glioblastoma...there is not much of a difference...here is a link that explains it quite well:

www.differencebetween.net/science/health.../

And Mr. Market too is starting to pay attention and corroborate the above...In the last 10 trading days (September 4th thru September 18th), ZIOP, in percentage terms, has gone up 2x as much as its competitors:

Bellicum Pharmaceuticals (BLCM: $16.12 to $19.34): +20%

Juno Therapeutics (JUNO: $35.92 to $43.50): +21%

Kite Pharma (KITE: $54.02 to $65.94): +22%

NantKwest (NK: $18.86 to $19.48) : +3%

ZIOPHARM Oncology (ZIOP: $9.02 to $12.59): ~40% (39.57% to be exact)

Regular readers of my blog will recall that in a number of previous posts I have highlighted a remark that Intrexon CEO, Randall Kirk, made at the company's Ist Quarter 2015 earnings conference call when he said, and I quote: "In health, we're totally smokin' hot!"

And who can forget, when, back in February, during ZIOP's dog and pony show for its secondary offering, Dr. Cooper, in response to Legg Mason's Bill Miller's question as to why MD Anderson decided to partner with this small company when they could have signed up with one of the Big Boys, said that when he saw XON / ZIOP technology, he was "salivating."

So let's take a step back

In Dr. Cooper and ZIOP, we are not talking about a group of shysters engaged in duping investors by pumping the company and its technologies so that they may dump their shares to an unsuspecting and gullible public for fat profits ...In fact, its to the contrary...This company is the absolute antithesis of a pump and dump...In a recent post titled The Management Of XON & ZIOP Have Me Flummoxed!, I put a glaring spotlight on their inexplicable proclivity to keeping a lid on good news...Heck, they displayed it again just 3 days ago when they decided not to PR the 2 important poster presentations at this week's Inaugural International Cancer Immunotherapy Conference in New York City...Again, like last time, it was the deluge of ZIOP investors who gave the management an earful via phone calls and emails that the company relented and issued a very delayed press release, and that too after the markets closed for the week!?! It is a known and established fact that public companies tend to release bad news on Fridays, after the markets close to try and minimize the impact...ZIOP on the other hand is the only company I know that a) will not release good news willingly and proactively (!), and b) Only under great pressure from its investors, will it reluctantly (!) release positive news, then that too on a Friday afternoon, after the markets close! Un-bleeping-believable!!!

The first piece of the XON / ZIOP jigsaw puzzle was put into place back in January when the two companies signed a partnership deal with the world's leading cancer research hospital, MD Anderson...since then a number of additional pieces have been put in place and I have highlighted most of those over the last few months here on my blog...With Dr. Cooper's Wells Fargo presentation, the jigsaw is no more looking like a puzzle but a beautiful picture of ZIOP leading the battle against the dreaded cancer with its immuno-oncology technology suite...Like other ZIOP investors, I am just delighted to be a part of the future in the making...a future when the diagnosis of cancer will not be feared by those receiving it...It is therefore fitting that I end this post with the slide titled: Fitting Together the Pieces of the Puzzle:

Slide #23:

(click to enlarge)

Dr. Cooper: "So fitting it all together, Ziopharm sits in the middle here, we talked to you today about the viral therapy, we also talked about CARs, I alluded to the fact that our company is very invested in Cytokines, IL-12, we talked about IL-15, in terms of our pre-clinical data looks great, we will be getting into TCRs, and we are not just a company focused on T-Cells, we will also be focused on NK cells…we have this ability to use oral ligands to essentially access the genetic programming of T-Cells or NK cells after infusion."

Anyone more knowledgeable than I please point me to the one immuno-oncology company that is attacking cancer from all the angles that ZIOP is...

I will now quote from Mr. Chad Peacock's blog post, where he shares the news that he has been selected to be the very first patient in ZIOP's glioblastoma trial:

"Here are some of the details, as far as I understand them:


(I'm not a brain surgeon, I just have lots of brain surgeries performed on me…)

- During my brain surgery, doctors will use a wee tiny needle to inject a wee tiny bit of genetically modified Adenovirus into my brain, right onto the site of where they just removed the cancerous tumor cells that have been growing back.

- Adenovirus is the virus that causes the common cold. But this isn't your run-of-the-mill Adenovirus. This virus has been genetically modified to (in theory) help my immune system fight the cancer cells in my brain. I say "in theory" because, again, this is a trial. We'll see if it works or not.

- What this modified virus is designed to do is release proteins that will signal my immune system to come in and fight whatever bad stuff happens to be there. In this case, the bad stuff is brain cancer.

See, normally your brain doesn't have much immune activity going on, since your brain doesn't normally get infections. It's sealed up in a nice clean bag, so it usually doesn't cause much trouble. This becomes a problem when you get brain cancer, which in my case started INSIDE my brain, since it's made out of brain cells. So by introducing this virus and its super-protein-signal-producing capabilities, we're kind of tricking my immune system to visit the Cancerful area of my brain, and the idea is that once it arrives it will notice the brain cancer, and start munching away at it. So that's the idea.
BUT HERE'S THE REALLY COOL PART (or at least, another cool part):


- This Adenovirus is not only modified to produce extra signaling proteins, it is also modified to not duplicate. So there's no risk of me getting a really, really serious head cold. (That was another bad cold joke, in case you missed it.)

- AND NOT ONLY THAT! It is also modified to only produce its proteins when it is activated. And the way we activate it is by me swallowing a pill!

- So they'll inject the virus into my brain, and it will just sit there and not do anything. And then, over the next few days, I'll start taking these pills called "Veledimex" (if you had any doubt, at this point it is clear that we're living in the future.) Once the Veledimex hits my blood stream and gets into my brain, it will signal to the Adenovirus to start making its proteins!

- By taking more or less of these pills, we can actually control how much of the proteins the modified virus will make.

- This is some seriously futuristic shit."

thebrainchancery.com/2015/06/14/the-unco.../

Irrespective of whether or not ZIOP makes me money, I sincerely wish Mr. Peacock a full and speedy recovery and hope he gets to enjoy a long and cancer-free life.

On January 26th, 2015, in my very first post on ZIOP titled "Ziopharm (ZIOP) is the Stock to Watch," I had compared ZIOP's PnF stock chart relative to two of its competitors, JUNO and KITE and had shared my expectation that ZIOP's share price and market capitalization will soon catch up with that of JUNO and KITE...Interestingly, today, almost 7 months to the day, JUNO and KITE's shares are hovering around the same prices (JUNO: $41.30 then and $43.50 today; KITE: $67.37 then and $65.94 today), while ZIOP's share price has gone up more than 73%(!), from $7.24 then to $12.59 today! ZIOP is up 73% while both its better known competitors have basically treaded water! And let's not forget that this 70% + appreciation has come in spite of ZIOP doing a secondary a week after my January blog post!

We all know that in the stock market, nothing speaks louder than money / stock price, therefore clearly Mr. Market has spoken loud and clear by allowing ZIOP to fly to the moon while holding JUNO and KITE down on Earth...

So who do you think is going to rule the immuno-oncology roost?

I will end today's blog post the same way I ended my January 24th post...this time however, the path is much more clear and the destination, a lot more certain...

:)

ZIOP to the Moon and Beyond!

kp

Slightly Off-Topic Postscript: Over the past (almost!) 3 years on my blog, the one point that I have consistently hammered home is that we are in a secular bull trend in the US markets, and now, especially after the NASDAQ made a new, all time high after a drought that lasted 15 years, (and correctly predicted here), we are certainly going higher, much higher! Here in California, we are worried sick after our 4 year long draught spell, the garden variety type of course...What about the NASDAQ that had to endure one for 15 long years...just imagine the pent-up need to party..Therefore to all those doomsters and gloomsters , the markets are getting ready to rumble, so either put on your party hats and join the crowd, or go to your respective corners and sulk! :)

DISCLAIMER: All postings made here are strictly for my personal record keeping and in no way, shape or form, am I even remotely suggesting others to follow my Buy and Sell moves. Trading options is definitely not for the faint of heart as one's portfolio can move up, or down, anywhere between 10%-30% during a single trading day. Feel free to follow my progress here, but PLEASE do not follow my moves. However, if, in spite of all my exhortations, should you decide to do so, be advised that you, and ONLY YOU will be responsible for any losses that you may suffer...In other words, the onus is strictly on you.

Disclosure: I am/we are long HALO, XON, ZIOP.

http://seekingalpha.com/instablog/6566781-options2wealth/4380546-the-chuckle-that-lifted-the-veil