I am short AFFY. Anyone who follows this board knows this. My short thesis is not predicated on O never coming back. It may, in fact, come back. AFFY says O must come back IN THE NEAR FUTURE for it to survive. I just do not think O is coming back, if ever, soon enough to save AFFY.
O was "voluntarily recalled" in collaboration with the FDA. The FDA now must consider the O patient deaths (12) and adverse incidents (98) as something that needs to be explained to its satisfaction. To me, it is as if the FDA has issued Takeda/AFFY a complete response letter to O's NDA and Takeda must now satisfy the FDA. I believe it will take at least a new O safety study and time that AFFY does not have.
So to me, it is not just a "binary event". The question is not just is O ever coming back. The question has more to do with how much time does AFFY have on its side.
Ask yourself honestly, does AFFY have time on its side to survive its securities class actions, shareholder derivate actions, products liability claims, Takeda to determine the "root cause" of O's safety issues, convince the FDA to allow O back on the market, and successfully convince nephroligists, dialysis clinics to buy O despite its tarnished reputation? If you honestly believe so, then load up on AFFY. If not, then why buy and hold? Are you trying to beat the MMs at their own game. Have you smoked too much Maxdad weed? Did you drink the Exp Kool-Aid?
It is a fair thesis, and i like your change of tone that actually O is coming back.
So my long thesis is based on a probability that O will be on the marked and DNA testing will be post maketing approval requirement. Every new patient, meanwhile will have a requirement to be monitored by MD for any adversed reactions during the first session.
And again given Fresenius executive tongue slip is very likely that is quite possible scenario. i can loose 1.60, shorts can lose how much????
I hold an option that is not expiring.
You could answer your own question(s) by using any of the systematic withdrawal calculators provided on the Internet. They are all pretty much the same. Using $9.5 million COH, 6% return, 35% tax rate, $55,000 per month expenses, .05% annual increase in expenses the answer is ~21 years. So IN THE NEAR FUTURE could be 3 years but there is no reason to believe it will any where near that long.
So thanks for being concerned about us but we think things, short and long term, are pretty much under control.
Oh yes, not to forget that Takeda and AFFY both have hundreds of millions of dollars invested in O and would like to recoup the investment and return this product into the market place. You don't have to worry about what the term NEAR FUTURE means. These two companies are in the process of defining it even as we await the solution which brings O back with renewed confidence.
Sentiment: Strong Buy
The amount of money Takeda and AFFY have invested in O is irrelevant to the probability of it coming back. Companies make huge investments, and lose on those investments, all the time. The FDA doesn't care about how much money Takeda and AFFY have put into O, and neither does the EMA. The amount of money invested in O does not help explain the higher adverse event rate with O in non-dialysis patients, and it does not alleviate the concerns of kidney specialists (people who know what they're talking about, not guys with a finance background) regarding O.
I would agree with you if AFFY did not have a crushing litigation problem. AFFY's litigation is so burdensome, so overwhelming in damage liability that it will destroy the company. Shareholder class actions. Shareholder derivative actions. Products liabilities claims. You like to completely ignore these kind of things.