Let me preface this by saying I am long this stock (very long) First off I believe we should discount the pipeline as less than 10% of Phase 1 drugs ever make it to market. While it would certainly be great if SUPG does I believe no one on the street see these compounds as a reason to invest in SUPG. Even of successful they are many years and 100's of millions down the road. This takes us to Dacogen.
1 Based on what we all know and believe it is pure folly for MOGN and/or J%J not to take out SUPG the fact that they havent despite the stock price of the last 3 months makes one ask why
2 Based on the sales trends Dacogen is "Currently " beating Vidaza in the market. Yet the stock goes no where and Pharmion goes up and SUPG goes down
3 I think its naive to believe SUPG stock performance is related to a bad IR job. Believe me they have been to enough conferences and there are some large institiutional investors who know the story and Wall Street knows the story.
This all adds up to one thing why is the stock price where its at. The decline in the price is clearly tied to the Survival data announced by Pharmion in August. I believe the only plausible answer to all these questions is that the people in the "know" believe there are serious doubts as to the results of the EORTC trial . If it were a given we would have the same results things would be different because by every metric Dacogen is a better drug. Even Pharmion raised the issue of the Dacogen trial in their call. I dont think we should be so quick as to blow them off. If Dacogen were to under perform in the trial it would be a huge advantage long term for Vidaza and even put S110 in to question and in any event take years to answer.
My experience in the market is when thing seem obviously misbalanced there is always a reason
Love to hear your comments
>>>I believe the only plausible answer to all these questions is that the people in the "know" believe there are serious doubts as to the results of the EORTC trial<<<
If that were the case then MGI Pharma would be down also. I know they have more going on than Dacogen but Dacogen is their most important income. Instead MGI�s closing price today is up 29% since their August 1st closing price while Supergen�s closing price today is down 38% since their August 1st closing price.
As you said, it doesn�t add up!
Today's move by MGI may point to how good this news might be on ADOPT. I was also wondering why no IMS figures lately. MGI stated that 4th quarter could be a little soft because of the holidays. Will look at PHRM's numbers last year to see any kind of trend. The 4th quarter looks like decent numbers:
7.8M Dacogen royalities
1.7M Loss from operations or -.03 EPS
6.0M Gain on sale of Nipent
1.1M Interest Income
5.4M Net Income or .095 EPS profit
Which number grabs the headline?
The IMS numbers for the last quarter of 2006 dispute that there is a measurable drop off in treatment during the holidays. IMS sales figures for the last three month of last year in millions of dollars are as follows:
Dacogen sales increased $2.5M from November to December 2006 and Vidaza sales increased $2.1M.
For comparison Dacogen sales increased $2.3M from August to September 2006 and Vidaza sales increased $2.7M.
From my notes on PHRM 3Q06 and 4Q06, they had identical sales of 36.6M. So no real trend down. I believe MGI is using Dacogen sales to show a surprise each quarter. I found a study where PHRM stated very high response rates in AML patients. They had:
28% Hematologic improvement
However Dacogen has shown the best effect in AML patients and that has been stated several imes by Dr. Manuso. In fact he stated on the approval trial the best response came from AML. This leads me to another point on differences with Vidaza, if Dacogen has the the fastest action and works best in AML patients, well MD's may put more emphasis on progression free. That could be an important reason why Dacogen keeps growing while Vidaza hasn't grown in over a year.
I too was puzzled by the low stock price.if one believes in science the survival data in the coming first half of 2008 should be at least equal or better than vidaza since only 10-15% of vidaza is converted to active 2' deoxy 5- azacytidine[dacogen] in vivo that is the reason the oncologist treating MDS have not switched drug despite the survival data on 8-2-07. this is analogous to physician prescribing lipitor to get LDL Cholesterol down to the target level many years ago when lipitor did not have events reduction data on fatal or non fatal MI or Stroke even though Zocor and Pravachol had these hard data because lipitor is more potent in lowering LDL Cholesterol level this is the same situation now with dacogen it is inconceivable that the dacogen survival data will turn out to be different
It's enjoyable reading everyone's post lately. The data should be a class effect. I have one concern, it has been mentioned by Manuso that the ERORTC trial will be completed earlier than was thought, since the end point is survival, I wonder if we do have something to worry about? I wish they had run a survival trial with the lower dosing schedule, I'm a little bit more confident with that trial and results that should be coming this week. I was very glad to see someone post who has seen first hand some results that Dacogen ph2 trial is benefitting by the drug.
I wonder how MGI will release data and what language they will use to accrossed results. Can't get too excited since very little SUPG does grabs any real valuation for shareholders. All things being equal, I think this is a great speculative play, with only minimal downside, of course we have seen most of the downside.
I didnt mean to imply someone has advanced notice of the results of the EORTC trial. What I was trying to say is that people who have done more homework than the people on this board think the results of the EORTC trial are not a sure thing for reasons relating to the trial design etc or other things we have not yet uncovered. Why for instance is Jand J waiting to file in the EU , Dont they have enough data to file now?
I agree with Zoomie that yesterdays drop was done by a small number of shares, but after the drop, the buyers were not there.
Note that from what I remember, JJ agreed with the EMEA (I think that is the FDA equal) that the EORTC will be used as the basis for filing the NDA in Europe. That is why there are a lot of european sites for this trial. Note that the EMEA could as well have required new trials.
You will have to know who are the selling and who are the buyers before you can make that kind of assumption. Can you? I do NOT think you can.
Most of people who bought in after earning are small investors. They take profit when they see the stock going down. Don't read too much into this
A friend of mine has myeloid leukemia. In a New York hospital he was treated initially with a phase II trial drug which resulted in a minor heart attack. He currently is being treated with Dacogen and was allowed to go home between treatments. He has no visible side effects from dacogen, his spirits are high and we are all hoping for remission.
batzem, I think you have made the most important post of the year and no one has even bothered to rate it.
I agree that the pipeline is completely discounted. It is all either phase 1 or nonclinical. I have been struggling with this myself. You can see test data on effectiveness and toxicity, and it is meaningless until it gets into the clinic.
I was a stockholder when Orathecin was in clinical testing. There were several very promising phase 2 trials. I even remember the annual report from 2003 in which the company outlined two very impressive cases of complete remission from pancreatic cancer. I was crying as I read. Orathecin was to be the next wonder drug.
I still don't understand what happened, but I am not even waiting for a spinoff. Orathecin is a dead issue. And if it could happen to Orathecin, it can happen to any compound.
I still like the potential from Dacogen. I think a billion of annual sales can fund a lot of trials. But those who have been screaming for additional revenue sources make a valid point.
And so, the company is forced to stand at the plate and keep swinging. It is good to have a stream of royalties from a single drug. But there needs to be some success from the pipeline for the stock to appreciate. And success does not carry weight when it comes from phase 1.
<<My experience in the market is when thing seem obviously misbalanced there is always a reason>>
Usually this is such a valid point that we should all use it as a sell signal. But I feel thst it is less true with pharmaceuticals.
There have been too many times when a drug stock was in perpetual decline because of some unforseen failure. And when everything looked the worst, a medication received a second review from the FDA and the company flourished.
A long time ago, it was Cephalon. More recently it was Imclone, and now Dendrion is a potential example. I am still not sure where SUPG is going, but with a share price of $4 and a potential royalty stream greater than 200 million, I think it is worth owning. And you get a promising pipeline and a discovery platform for free.
>>Usually this is such a valid point that we should all use it as a sell signal. But I feel thst it is less true with pharmaceuticals.<<
Look at PHRM before they released their survival data... they were selling like mad 2 weeks before the data was released. The street was "expecting" the trial to fail. And then BOOM! Off PHRM went. The market very rarely, if ever, telegraphs itsnext move.
I take this as more of a buying opportunity. It's not often you get to see a stock take a hit due to uncertainty, see some of the clouds lift, but the stock not recover at all.
With cash on hand at ~85mil, an estimated value of CLIMB at ~50mil, that puts us at ~135mil in intrinsic value. We're trading at 1.5x's that, which is INSANE. Take away CLIMB and we're at 3x's book value, which is still insane.
I'm not worried about SUPG, I don't see this stock moving much until mid 1H07, when we get EORTC, MP470, S110, and MP529 updates. Until then, we're at the whimsy of the market and its makers (and perhaps surprise positive data at ASH).
Good luck -
You are discounting that the institution holding has increased to 56.4% as of now from 47.6% at the end of June.
Yes, some institutions sold to take loss. but more are buying
I don't think he decline in price is based on "people in the know" having the inside to survival results. The volume doesn't equate. Today, for example the stock was down almost .30 on less than 375,000 shares at 2:00 EST (that equates to about .60% of shares outstanding). Then a 80,000 block trade occured (almost equal to 1/4 of all shares trade at the time) and did not move the stock one bit (don't know the jist of this trade). The stock the past two months has moved on very little volume. I think most big trader's (institutions) are just taking a wait and see approach. Why take any risk (especially in this market).
Look at here, there were 101.2K share bought and 97.9K shares sold, so they canceled each other off. that is maybe why no movement in the stock price
<<I don't think he decline in price is based on "people in the know" having the inside to survival results.>>
anybody with basic understanding clinic trial would not guess that way. nobody, the company or even the leading doctor, know the result before the final statistical analysis.
Why can't CLIMB be used to discover promising componds on a contract basis for big Phrama? This would certainly bring in alot of revenue and diversify SUPG revenue ? Is CLIMB just for Oncology research? I still hope that MGI will partner up on 529 or S110. Dr. Manuso must really be confident about MP470 and I think it has a much greater than a 10% chance to make it out of Phase 1.
"My experience in the market is when thing seem obviously misbalanced there is always a reason"
In my experience: Not always. Sometimes it just takes time for the inevitable to happen and in the meantime we try not to pull out our own hair while watching insanity continue or get worse.
I've seen this with a stock that management said "We are filing for Chapter 11 - our stock is worthless". What happened? The stock went UP and stayed UP for months... before eventually going to zero. WTF?
Now I see a similar situation with SUPG in the opposite direction. Just hope it doesn't take too long.
Good luck all longs!