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Cortex Pharmaceuticals, Inc. Message Board

  • bladerunner1717 bladerunner1717 Mar 24, 2005 12:25 PM Flag

    Shahar Avi & PTIE

    I remember Shahar Avi telling everyone on this board that PTIE was his top pick, and he gave his reasons why: Lots of cash, three drugs in Phase III, big markets, etc. (He even trashed me for for bringing up Dr. Garren's reservations about the company.) Now this is what what he writes today on the PTIE board:

    "I am not gloating about having traded out of PTIE. I still took a loss, and more importantly the drug has had a setback. Moreover, if they had released study results earlier in March, I probably would have taken a significantly bigger loss. And, I posted on other boards how PTIE was my favorite pick for '05. However, I didn't make the mistake of being so emotionally wed to the stock that I ignored info that troubled me - and that info included company history of clinical trials and products, biotech market dynamics, a comparison of this biotech investment vs. other potential biotech investments, etc."

    I don't remember him telling this board that he sold out of his PTIE before the announcement of results. Does anyone else remember this?

    The Market certainly seems uncertain what the results of the PTIE trial means. Any thoughts from people here?


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    • >>Your question is a naive one in that you are assuming approval.<<

      Perhaps I am.

      >>Just because a drug shows better safety, or strong indications of efficacy along with safety, doesn't mean that the FDA will sign off on it. As many posters on this board could second, I wouldn't hesitate to demand Citicholine if I (or anyone I knew) suffered a stroke. Problem is, it was never even filed with the FDA.<<

      This strikes me as an illogical statement. Specifically, the technical term for it is "hasty generalization" - taking a small sample and generalizing it to the whole. By and large, I believe the FDA approves good drugs - perhaps that is naive.

      I'd also focus your attention to SOWS and specifically, the SOWS checklist - it's out on the web if you look hard enough. A difference between 1.2 and 2.6 appears to be an immense difference, not just a 50% improvement.

      In my mind, in this case, the bureaucratic path of least resistance here is toward approval since there is a public health crisis with the number of people addicted to narcotic pain killers. And this drug would essentially wipe out the physical aspects of that problem. If the preclinical studies are correct, you could also use Oxytrex to detox those hooked on opioids very quickly.

      Add to that improved potency and side effects, and I can't imagine how you see a higher probability of failure than success. Of course, the mathematical expectation of investment is substantially positive with a 50% chance of approval.

      A million things *could* go wrong, but are they likely and what's a sober and reasonable expectation of the odds?

    • OT - Toeachhisonus, Yes, SNMX has had a big move and probably will pull back, but I was looking at them from a longer term perspective. Unlike drugs, those taste enhancers can fly right to the market (relatively speaking), dependent only on getting the GRAS designation. The big questions are -

      1) What are the actual royalty percentages that will accrue to Senomyx for each collaboration, and at what sales levels (the company only gives a vague 1-4% with no details, though as you said these figures may be confidential), and

      2) Does Senomyx have a firm committment from the savory enhancer collaborator that they will definitely be using it in their products in 2006, and what are the sales estimates for that product and the royalty rate (Senomyx says they will have royalty revenues coming from the savory enhancer collaboration in 2006, but I haven't seen any guidance as to amount/royalty rates, etc). \

      Until some of these questions are answered, there's no way to accurately project a valuation for the company. I really like the concept though - super fast time to market (unlike regular drugs), and royalties on all end sales. However, if the royalty rate is only 1%, and end product sales are $10 bil/year, then royalty payments to Senomyx are $100 mil/year. A 2% royalty rate would yield $200 mil/yr, 3%, 4%, etc. That makes a big difference in figuring the company's valuation. Determining how committed the collaborators are to using these enhancers is the other big question mark. It's one thing to have collaborations in place with the 4 biggest food producers, but whether they actually going to use these enhancers in their products is another question entirely.

    • I dont find any specified royalty rates you were referring to --if you are talking about the Nestle deal, the terms are confidential.

      There are ongoing conditional R&D collaborative fundings but prospective royalties upon commercialization are ways off and far from certain.

      It had rallied recently to its all year high on the back of First Albany ($13 target) and Needham's strong buy. But is likely to pull back hitting that plateau.

      There are no further rev-generating deals this year so far. Annual burn rate approximates 30 mil with about 9 mil rev expected from collaborative fees in 05. Another private placement more than likely later in the year.

      The ridiculous $20 mean price target will be prelude to massive institutional unloading. First sign of insider dumping has already occurred. Short interest shot up fr 3 to over 5% in March. In this gloomy bio-invest climate, this stock is a recipe for disaster, IMHO.

    • OT - Toeachhisonus, Do you have a fundamental reason to be negative SNMX, or is it merely due to its runup? I haven't been able to find any details on their claimed 1-4% royalty rates, or their projected 2006 sales. Thanks for any info. (Sorry for the OT).

    • blade, since you pose the question, I'm going to shoot straight without mincing words: there might be honor among thieves but there's none among pols and few and very far between among fellow posters.

      No, he owed nobody an explanation or apology in selling his stake at will. BUT it would be very gentlemanly of him to signal Aiming (others) even as a perfunctory or courtesy gesture had he done so, since he threw in that bone on this board with such enthusiasm but subsequently changed his mind for whatever reason.

      The way I see it...he badly needed a pump as his shares went under, and the perfect moment came along.

      Take everything even from seeming hail-fellow-well-met with a boulder of salt to use a familiar phrase of his.

      Verily, to each his own.

      FWIW I loaded up big time during the first half-hour plunge. I view the stock a good buy in the low fives and expect the price to pick up steam going into the 2nd half waiting for the next phase of data.

    • Shahar Avi responded to a request from another poster as to his positions at the time. I don't think that then obligates him to keep everyone informed of his stock trades. People are constantly mentioning stocks on this board. Some have an egenda in doing so. Others do not.

    • Bladerunner, After doing some DD on PTIE, I bought a little last week, but then chickened out and sold it the next day. Betting on Phase 3 results definitely is a minefield, especially if one doesn't know the stock well, which I didn't.

      Listening to PTIE's Conf call this morning, they did some deft tap dancing, claiming that the FDA had previously agreed to define superiority (the primary endpoint) as including not just efficacy, but also safety, tolerability, and dosing. As Dew said, having a well defined SPA would have been a good idea in this case (though for CTIC it turned out to be a liability). It looks like PTIE's second Phase 3 results coming up later this year has a tougher endpoint, and they'll need to show a more strict efficacy superiority (that trial is more of a direct head to head comparison, with equivalent dosing regimens between trial arms). PTIE looks like a stock to watch though - there's definite potential there, but without clear cut efficacy superiority demonstrated in Phase 3, it might be a long agonizing wait for an uncertain FDA approval.

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