I'm not suggesting that all the technical theories are bunk, but the period after the 4th of July and Labor Day is often referred to as the Summer Doldrum's when it comes to Biotech's, largely because of a general lack of news during this period. This year's probably far worse then the average because of so much negative economic information bringing down markets everywhere in the world.
It's not that AEZS has had no news, the conclusion of the Solorel trial, anticipation of the Phase III of Perifosine trial ending, top line data for both, and finally anticipated NDA filings are all newsworthy, but it's all news that's completely been expected. Much the same is true with most other biotechs, but DNDN's announcement of less then anticipated sales tanked both them, but to a greater degree the entire industry.
I don't know what it will take to straighten out the economic mess all over the world, or even here for that matter. I believe we'd make a big step forward if Politicians put Country ahead of Party and spoke with one another, rather then through one another. The next election will probably be one of the nastiest ever as the Democrats wage class warfare and the Republicans scream cut taxes. The truth I believe is, we need a little compromise.
It's true that cutting taxes on Corporations could create jobs, if they were paying taxes. To me it's logical to lower Corporate tax rates, but eliminate regulations that permit them to operate offshore, or hide all they're earning in loopholes we've provided them. 60 Minutes had several CEO's defending their actions as what's best for the shareholders, wish I could disagree, but it's our laws that permitted the likes of GE to earn something like $7 billion and pay zero taxes. I believe we'd take in far more money if the Corporate rate were lowered to perhaps 15%, but most, if not all the loopholes and subsidies they get were removed and companies doing business here paid taxes here.
On the other hand the Republican's insistance on maintaining all the benefits for the wealthiest of us, while others suffer with less all the time cannot fly with voters. Cutbacks by States, Cities, etc because of lower tax revenue effect all our lives with lessened services. Our wealthiest may not notice the decay as much, flying around in their jets or traveling in limos, but the rest of us feel the potholes, and we'll feel the pinch if Social Security or Medicare is cut dramatically, at least when we're at that age, which I am. One solution to extending the benefits would be to take the level where you continue to contribute to the fund dramatically higher, yes, you can call it a tax on the wealthy, but it's the same percentage the rest of us pay on all we earn.
If I had a choice, I'd vote for a Moderate Party that promised to put Country above Party and would kick all the current politicians out. While I'm a Democrat by affiliation, I'm sickened by both Parties actions and would openly support a Moderate party that's somewhere in the middle, but not the fringe parties attempted by the likes of Perot and others.
AEZS and other biotechs will eventually soar, or fail, based on news that's specific to the company, not the economy, or other biotechs. Right now the big news people want to hear is Top Line Data for Perifosine, which should come a month or so after they announce the completion of the trial, perhaps by years end, or early next year. We've been told that Top Line Data for Solorel should come this month, while hopefully it's good, they've said they'd file a NDA early next year, that's a hint, but understand, this is a drug which should earn them some money, but not a fortune. The real news is about Perifosine, about AEZS-108 after that, both these have blockbuster potential, as do other drugs that are years further out in development.
The Dow's down over 100, AEZS is down pennies again, when it was down 50 we were slightly up. The point is barring other news we are influenced greatly by the market. When good, or bad news comes in, it's not that the market has no influence, but the influence is diminished. I'd much rather see great news on an up market day, but regardless, the news will ultimately lead to approvals and approvals will lead to earnings, it's those earnings that eventually will dictate stock value, though it's always influenced by what's happen in and around it. Under the right conditions a company like AEZS with earnings could be valued at 30 to 50 times earning under the right conditions, however under other conditions it might be judged worth 10 times or less. The earnings multiple is dramatically effected by other influences, if optimism pervades, the higher figures certainly come into play, but if pessimism is seen in the market or company, the multiplier will clearly be lower. In the time I've been writing this paragraph the Dow's improved to down 80, and AEZS is down just a penny. Things just happen this way.
Gary
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