Replies to post #49079 on Ariad Pharmaceuticals Inc fka ARIA

[AmpleKind]

on May 15, we'll know most of the GIST, '113 impact....
Post ASCO, there is a dearth of trial news from Ariad for over a year until latter 2015.

But, if the GIST and 113 data is promising, then I'll be pretty
satisfied that it's just a question of time for a very significant
increase in Arad's value.

BTW, Dr.Gottlieb's article also notes that setbacks in biotech are
not at all unusual, and that often, companies do better subsequently.

[jochenVt1]

Sorry, 2da. I have to disagree.
The value driver or destroyer over the next year will be Iclusiq revenue vs expectation.

Take DNDN as a negative example. Revenue keeps on disappointing, competition gets stronger, barely breakeven forecast now even 3 years from now.

Right now Iclusiq is predicted to generate a (healthy) profit starting in 2017. Any shift in this (caused by revised revenue) will be a big negative and could send the stock back to $4.
Shift in profitability due to higher costs if driven by new molecules or indications are probably OK.
I am not indicating that we will be as bad off as DNDN. They have 600M in debt and currently spend 20% of revenue on interest payment alone, but it shows us the direction things could go if Iclusiq disappoints. This is why I said that repricing of 15mg dosing is a positive (for now). It adjusts the business-model to reality (the statement before "we don´t want to get too pricey, because we want to be first line sometime" is really wishful thinking).

On the other hand take MNKD. Now valued at $2.4B + 250M in debt.
The trajectory to profitability is similar to ARIA, probably happening in 2016 at the earliest.
Nice to have product (nobody really needs inhalable insulin to survive), other companies tried and failed (due to effects on lung and lung-function), already approved products by other companies withdrawn, some similar AEs seen in MNKD trials as well.
Besides MNKD has a bad history of burning through cash, close to 2.5B already wasted (compared to ~1B at Ariad, based on paid in capital) and they more than tripled share count over the past 3 years.
Nonetheless riding high on anticipation now.
Any positive news (and improved confidence in Iclusiq) on ´113 (long duration of response and/or better response rates than competition) or start of additional registration trials for Iclusiq (GIST, FGFR) could bring us back to the same valuation as MNKD (which would equate ~$13-14 if you count in debt).

All three companies are similar size. Where ARIA share price is going to be in 1-2 years depends on whether the trajectory is more like DNDN or more like MNKD.