I received the following message from a Dr who follows CLVS. Do your own DD.
Look the CLVS data is good. Its 100% NOT "BAD," and as I argue the study populations between CLVS/AZN are clinically and genomically different. Wall Street always will compare trials, using the simplest analysis (simple numbers ORR's for example), but do not account for the differences between groups, the CO-1686 story will take a long time to convince the Street its better, but I believe it will succeed. Spoke with doctors and NSCLC patients recently and asked them which they prefer (showing them data on safety efficacy, and PFS) both preferred CLVS drug. Doesn't mean AZD-9291 doesn't have a role, it 100% does. The Wall Street thing is this, its all about determining what % market share each will get in 1st and 2nd line therapy, and combination regimens in the future. My confidence in CLVS is not dependent on a % market share, but rather I argue that the overall pie of the market will get much bigger over time, meaning Wall Street is undervaluing CO-1686 based on their analysis of the NSCLC market size and the error of only assuming these drugs will be used in small subgroups.
Rucaparib data continues to impress me, and the gBRCA Ovarian Cancer setting is "peanuts" compared to "BRCAness" market size.
Bottom Line: CLVS is one of maybe 10 Biotechs, and maybe 1 of 2 oncology companies with 3 Phase 2 or 3 drugs in development unpartnered. M&A target NO DOUBT!
Looking at M&A valuation is certainly $90 per share across all sell-side firms, and mine ranges from $120-$157/share depending on various scenarios.
Sentiment: Strong Buy
CLVS is the only company looking at BRCA and BRCA mutant response and from insurance coverage standpoint, labeling would be for these BRCA classes. Prescriptions would be specifically for this drug based on BRCA and BRCA mutant genes.
They are looking for a 2015 FDA approval and product launch, so with the increases in participates, things will move quickly.
In my opinion compared to other drug development companies, CLVS is undervalued at these levels and with the high short interest and institutional ownership, we could see rapid stock appreciation in the coming months.
Sentiment: Strong Buy
First let me comment that todays volume is not institutional, but appears to be day traders and retail. No clear direction on the light volume and many who play the options games may be truing up weekly positions.
Everyone should listen to the conference call, but unless you are in the drug development/pharma space, it is a lot of words that probably mean little. What I found interesting is a few key points:
First, Two clinical tests. Western patient population. 80% came off TKI. Demonstrated on 3rd to 4th line patients. Toughest population to treat.
Second, Barrier to entry to high and have differentiated from competitors. BRCA can be applied to solid tumor types other than ovarian cancer, will be explorer with other tumor types. Tests are extremely meaningful. Appended dose. Low rates of hyperglycemia are encouraging, does dependent. Data is compelling 36% response rate, 7.5 months. Chemo 3 or less months. Expanding tests with various inhibitors. Estimate 2015 product launch to make product available.
3rd, Demonstrated BRCA meaningful difference. 625 mg twice daily. 67% response, 89% disease control. 10.4 months. 14% of patients have hyperglycemia that is controlled with other drugs. Compared to Chemo 10-15% and 3 months. New data represents great progress in getting FDA approval and moving into market.
4th, Questions include talk about confidence in durability of effect, move medium pfs, from 6.5 – 12.5 months depending patient do. See gating factor NDA submission, duration of follow-up , CMC, variability of mid 2015 guidance. Additional 100 patients into trials, confidence in durability, and their investigators comment daily. Gating factor on submission agreed with FDA and EMA on number of patients enrolled. File for approval mid-2015. CMC is not a gating item, its maturity of data. Collaboration with Merck on investigative trial. Regarding Hyperglycemia no patient requires insulin. .
Sentiment: Strong Buy
As so often is the case, AHs paints the picture. It was down $.97 on volume of 9,000 shares. It was up $.21 on volume of 450 shares. These trial results are, at best, difficult for the layman to interpret and Wall Street often doesn't stick around if there is reason for any doubt. cheers
You might be right but the trades after hours do not support such a conclusion. CLVS is currently down $.96 on volume of 9,000 shares. If tomorrow is to be a banner day I would think the activity AHs would reflect it. cheers
We will be much higher then this as part of the 26% short interest starts to cover on the way to buy out from approved drug with only two companies in the space.
I saw your post on 11/4/14 and hoped you were wrong. As it turns out, you were right!!! I hope it does not go any lower.
Volume rarely lies. Currently, with 2 and half hours to go, volume is nearly 5 times normal volume. There is disappointment here that can't be explained as 'insiders' positioning themselves. I'm long but not naïve. cheers
Not sure it is Wall Street. This stock has a tendency to trade up ahead of news as insiders position themselves and then consolidate a few points on that news.
Safe to say we are a long way from $120. Wall Street is definitely sending a message today and it's not pretty for the longs. cheers
CLVS will be bought out as the cost for development by another mega-pharma is huge compared to cost of purchasing a proven and approved product. Whether its next week, month or year, you should see $120 per share when the bidding ends.
Results thus far are very, very encouraging. Rociletinib has a 67% ORR in heavily pretreated T790+ NSCLC patients. This is incredible. This 67% ORR is better than the ASCO report which was 58% ORR.
What is also exciting is that there is a 36% ORR in 11 evualable T790M negative patients. Moreover the tolerability at the doses used was excellent. This finding of responses in T790M negative patients may differentiate rociletinib from the AstraZeneca competitive irreversible TKI .
I look forward with excitement to the presentation on Friday.