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OncoGenex Pharmaceuticals, Inc. Message Board

  • marcpw marcpw Mar 27, 2012 1:42 PM Flag

    Leering Swann coverage

    Leerink Swann Starts OncoGenex Pharmaceuticals (OGXI) at Outperform;

    March 27, 2012 7:02 AM EDT
    OGXI Hot Sheet
    Rating Summary:
        2 Buy, 0 Hold, 0 Sell
    Leerink Swann initiates coverage on OncoGenex Pharmaceuticals (NASDAQ: OGXI) with a Outperform. PT $19.00.

    Leerink analyst said, "Current data for clinical candidates Custirsen (Phase III) and OGX-427 (Phase II) appear supportive of the biologic rationale behind targeting the stress response proteins clusterin and HSP-27. However, hesitation around Custirsen's and OGX-427's antisense approach and limited validation of these targets are plainly reflected in OGXI's current valuation, in our view. While the main validating data from Custirsen's Phase III SYNERGY trial are not expected until YE:13, we believe supportive findings from ongoing Phase II trials for either Custirsen or OGX-427 during 2012-early 2013 could provide incremental comfort behind the validity of OncoGenex's approach and subsequent recognition in the company's valuation."

    Shares of OncoGenex Pharmaceuticals closed at $13.39 yesterday, with a 52 week range of $8.63-$18.99.

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    • Yes, that would explain a lot.

    • Mr. Sssasma,

      Ever think that the stock market is controlled by a giant African beetle?

    • 2008 was a good time to load up on OGXI. Part of the happy ending to my story was that on December 3, 2008 -- I remember that date too -- OGXI issued an early morning press release announcing the strong positive results from the P2 trial of 011. The stock was so neglected at the time that I was able to add to my position in the premarket in the 2s. It still took another 4 or 5 months for the stock to get noticed and the pps to take off.

      As for Ivan, there was an English king named "Aethelred the Unready" sometime in the 900s. I don't really know anything about him but he was always one of my favorite kings just because of his name. I just looked him up in Wikipedia and it seems there is controversy as to whether that was really his name, but as we know Wikipedia is often wrong and I prefer to believe that it was. I chose the Kafkaesque "mr. ssssamsa" because Gregor Samsa and all the obvious variations on it were taken so I opted to add the 3 more "s"es as a reference to the famous Madagascar hissing cockroach. But it doesn't really work and I keep meaning to change it but never get around to it.

    • Mr. Sssamsa,

      Great story. Ivan the Unready? I remember when the reverse takeover occurred and OGXI was trading at $2 in summer of 2008. I was walking down a rural road to get into a river to fish and my broker advised that I should buy more $2. Well, I've continued to buy at higher prices but that was a sweet morning. I can't remember if I caught a fish, probably not.

    • Thanks summer. That's a good explanation of what I was trying to say when I used the term "statistical fluke."

      The SNUS scar has basically healed at this point. After the debacle I resolved to be luckier and that has proved a successful strategy.

    • I'm sorry to hear about your SNUS experience.

      However, dont blame yourself. One fact that's almost always forgotten in biotech investing is that most P3 trials are only powered 90%. That means even if the drug works as expected and the trial is executed perfectly, there is a 10% that the trial would fail. Maybe the DD you described was flawless (i.e., you did everything you can as an investor) but you hit that 10%.

      I'm happy to hear that you recovered some of your losses.

      I also hope that OGXI wont be a repeat of SNUS.

    • Definitely the scar, from the SNUS-shaped wound that was inflicted on the morning of Monday, September 24, 2007 when they announced they had missed their primary endpoint (not that I'm keeping track of the date lol). They had closed on Friday around $4.30 and opened in the premarket at about $0.80 and went down from there. For most of the previous year or so the pps hovered around the mid-5s but a couple of months before the announcement it dropped to the high 3s on heavy volume in a span of a few days, ultimately recovering to the low 4s before the final collapse. It's possible that the early sellers didn't have inside information but were just risk-averse and trying to get out before the binary event. But in retrospect there was another bad omen: SNUS's partner Bayer had stopped touting the product when it talked about its pipeline in corporate communications.

      After the pre-announcement selloff I sold about 35% of my position but it was still too big a part of my portfolio. The problem with SNUS is that it seemed so low-risk, at least to a non-scientist like me. As I mentioned the active agent in both the treatment and control groups was the same and they only had to show non-inferiority. Their non-randomized P2 data stacked up well against historical data for Taxol and they had done a PK/PD study that as I recall showed their novel delivery system was at least as efficient as Taxol. So that's one lesson: there's no such thing as low-risk in biotech.

      A lesson for SNUS management, which OGXI has clearly learned, was don't go into a binary event without a pipeline to fall back on. SNUS's crash was so epic because all it had was a P1 product (SN 2310) that, despite very impressive results in mice, didn't prove very effective in humans in the P1 trial.

      I was pretty devastated for awhile and still won't use the moniker I used on the SNUS board, Ivan the Unready (my hands are trembling as I type it). But I've made the money back, in part by diversifying out of biotech but also in part through OGXI, since I sold about 40% of my shares in the runup to 40 in 2009. (I've since bought a lot of them back.) If it hadn't been for SNUS I'd never have stumbled on OGXI.

      But yes, all of us who are invested here are gamblers. Anyone who buys any stock is at least a bit of a gambler since they're betting they can outperform an index fund, which very few managed fund managers can do over time. But biotech is probably the riskiest sector in the market. Its attraction is that it offers the possibility of a big score, but I think the SNUS-type outcome is a lot more common.

      As you say, we press on. I'm optimistic about OGXI's chances, partly because it doesn't have that too-good-to-be-true appearance of being almost risk-free that SNUS had. But I also think it's good to have some hedging strategy in place before a binary event, whether it's selling part of your position, buying puts, or something else.

      Sorry for the long post. Maybe I still needed the catharsis.

    • mr_ssssamsa, I gave your post five stars. You either take really good notes or you have a giant, SNUS-shaped scar on your heart, lol.

      SNUS was my first foray into biotech since, as you can probably tell from all my poker references, I am a gambler at heart. I saw all the positives and none of the negatives and couldn't resist a drug just hours (figuratively) from FDA approval. That lesson earned me 18 shares of OGXI, lol...

      We press on.

    • What a joke look who was in the underwriting of the 12 offering:

      Leerink Swann LLC and Stifel Nicolaus Weisel are acting as joint book-running managers and Lazard Capital Markets LLC and William Blair & Company, L.L.C. are acting as co-managers.

      They are selling you the shares now.

      • 1 Reply to brusselsgriffon2
      • Brusselsgriffon! Welcome back. Hope those puppies are doing well...

        As for this "joke," it appears to be just a small part of an elaborate system of 'jokes' that are repeated on a daily basis throughout the investing community. Some of us think it quite funny, others...not so much.

        As for me, I won't be laughing unless this particular 'joke' boosts the OGXI pps in preparation for subsequent 'jokes' to boost it even farther. I sincerely hope Drs. Crooke and Gleave are laughing the loudest when their brain power and hard work finally come to market.

    • I'll note this is the analyst who has been most skeptical of SIS so his AS comments are in that context.

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