docbanker
Thought I would answer your post seen on RPRX on this board:
OT ELN: zipjet.
I suspect we might have differing opinions on ELN- consider the following:
i) ELN trades at over 13x this year's revs while BIIB trades at 4x and BIIB makes money- if you want to own Tysabri why not own BIIB- they have the same enterprise value (market cap plus debt less cash) but with BIIB you get profitability, Avonex and Rituxan.
I think BIIB is a good buy because of Tysabri, although the pipe-line lost some gas with the recent disappointments (PPMS, Lupus). I must check out the enterprise value comparison.
ii) This alzheimers trial has less than a 5% chance of working. WYE originally stated that they would only start a PIII if the PII interim look was close to stat sig or trend or whatever. then in WYE erns call they said they started a PIII based on PII results, their belief in their scientists and immunology platform and a large unmet medical need- sounds very watered down to me
You know, a placebo has a 5% chance of working! Well regardless of what was "said", the fact is that a huge and expensive AD Phase III program is underway, before the Phase II completion.
iii) why is the PIII trial design 40x ish larger than PII if signal from PII was so clean?
1. Two different populations (Apoe-4 and non)
2. The non-carriers have 4 arms, so the populations aint that big.
3. Safety - when targeting 12m patients, you need a few K on drug.
4. Its not 40-ish larger - it's 12-ish larger - and that's BEFORE you consider 1,2,3 above.
iv) what the hell is going on with the endpoints BS?
Very simple, its adaptive trial design. Its a fact that the choice between ADAS-Cog and the NTB can be made (blinded of course) after the Phase II results are known.
v) why is ELN not letting certain people into their investor day? last company this happened with i know of was hiding something.
I dont think Elan has much regard for Analysts in general - when I bought it a few years ago, it had 7 "sells" with contempt-levels for Tysabri and the pipe-line. Nevertheless, I agree they should have let Adam F attend - even though it was a "Company Day" not an "Investor Day". In any case, only 5 days before at Morgan-Stanley Unplugged, the CEO spoke for 30 seconds and spent 30 minutes answering questions.
vi) Tysabri numbers from analyst estimates are coming down
They're the ones who didnt get invited! In any case, with Crohns approval, my numbers are going up. I think the 100k on Ty by end of 2010 is reasonable.
vii) the recent report out yesterday from Caris is decent in that if this alz trial fails stock is worth teens at best.
And if AD succeeds (look at Baxter's recent phase 2 results in IVIG). In any case, I think Ty does $4bn in 2010 and that's eps of $2.50 per share for Elan.
viii) wildcard- what happens if a problem occurs with tysabri again?
Too old, Too wild, and Too Vegas.
A better card is the AD program.
ix) sentiment is in the stratosphere- last stock i saw sentiment this high in and i was short it was IMA in the 60s (they had a lot of problems like 7x debt/ebitda, overpaying for acquisitions, no core organic growth)- i basically told Mark Richter from Jefferies that he was dead wrong on this- stock hit 20s a few months later and that guy no longer shows up at Jefferies (did he lose his job over that shitshow?).
I really dont think even Tysabri is priced in.
Basically WYE and ELN have been at this AD thing for a long time, and I think they know something. I mean, if they succeed, you know where ELN is going, right?
My only concern is one you didnt mention - safety in the AD program. Obviously it has influenced the trial design, an obvious signal. When enrollment is fully up, that will be a wee bit nerve-wracking. But they have designed for it, and hopefully with good Phase II results, any problems will not lead to a halt like last time, but instead a controlled suspension.
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