Replies to post #164105 on Biotech Values

[jq1234]

I'd agree. CS report gave a pretty good conservative baseline case for ARIA. It is almost identical to my own baseline case with little to very conservative projection, the only difference is I didn't give much value to 113 at that time. The base premise is correct IMO, Iclusig's true value won't be clear until EPIC trial, the near term value depends on 113. The differences among different valuation models mainly came from how much Iclusig would be used in 1st and/or 2nd line setting. People need to give a rest on other people's motives with different opinions on Iclusig valuation. There are many possibilities, different people have different opinions, that's what makes a market. If people are so sure of the outcome, then they should bet their entire farm, otherwise, stop whining about different opinions. I know that's not going to happen, the most common theme on most message boards is that others are conspiring against their stocks/companies.

[Whosetosay]

The notion that there are powerful forces out there trying to "get" your stock is almost always unfounded.

Perhaps, but certainly it is true as an indirect consequence in this case. Novartis will 'by any means necessary' protect the market share of its highly profitable (big and small) businesses. NVS ethics ranks with the lowest of big pharma. Note: Gl/Tas provides likely 35%+ of their Operating Income. Often, it's not about the science or the data or the drugs, it's about the money. The former leaves plenty of room for spin to serve the latter.

NVS's code of conduct with respect to Ariad will continue to play out. Expect more negativity from NVS to confuse the market (docs).

Market share in CML et al and Ariad stock are highly correlated. Market share is the end game for NVS, and Wall Street can profit from the effects of research events. People make money off the moves. We know with certainly, stock research that speaks to Ariad market share, especially negative reports (Favus and CS), move the stock quite a bit. The underlying correlations cannot be ignored, either in the research, or Wall Street relationships. No doubt, many CS clients got the research ahead of 'the crowd'.

With respect to Ariad, market share and the stock are currently 'one and the same', though the beneficiaries may be different. Essentially a near perfect conspiracy.


http://www.justice.gov/usao/nys/pressreleases/April13/NovartisLawsuitPR.php


http://www.corporatecrimereporter.com/news/200/novartis10312012/

http://www.justice.gov/usao/pae/Pharma-Device/novartis_settlementagreement.pdf

https://en.wikipedia.org/wiki/Novartis (Lucentis)

[bellweather1]

Well, I'd be more convinced to take your point if there was some overall acknowledgment of the limitations of their approach(which, as you point out, has failed to assess Ariad's potential from the start),

and, also, if every ambiquity wasn't interpreted in such a skewed fashion.

For example, what competent analyst(one who's generally familiar with the cml field) could concur for a second with the idea that Bosulif could become a preferred front-line therapy in cml? Assuming they know enough to realize how unlikely that is, you would expect more than an endorsement of such an idea(despite the minor qualification), when they should be more seriously questioning their survey methodology.

Or they're failure to acknowledge the distinct liklihood that Iclusig(Ponatinib) will surpass the 50% MMR threshold in EPIC(with eveything they should know about it's previous performance), not to mention totally ignoring it's other obvious(and very likely) applications.

In view of the above, I, apart from some sort of "make work" motivation, have to ask myself why they compiled this voluminous document at all, except as some sort of sophisticated monument to obliviousness.

And, although I will agree that it's both futile and faulty to look for conspiracies around every corner, I also believe the odds of such go up preciptously as the economic implications mount.

Therefore, since this "report" is (despite it's marginal qualifications) so negatively skewed regarding all areas of ambiguity(as well as some that are not so ambiguous), and literally billions of dollars are at stake in the cml market alone(not to mention all the other markets that are likely to be addressed by Ponatinib competitor TKIs), and, on the basis of their knowledge of the cml and biopharma market, these "analysts" had to know better,

I find it nearly impossible to believe there wasn't(in this case) some overriding agenda from the outset.

Best,

bw

[iandy]

I'd argue the difference between my analysis and that of most sell-side folks is the willingness to project events for which there is, as-yet, no hard evidence.

I would humbly suggest a new list comprised of Suggested Ideas and Strategies for Biotech Investors. While the list of Common Biotech Newbie Mistakes is instructive and entertaining, I think it would be a great service and interesting endeavor for the posters here to assemble a list of strategies and ideas successful biotech investors utilize.