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OncoGenex Pharmaceuticals, Inc. Message Board

  • tnk.shorting tnk.shorting Aug 18, 2013 1:21 PM Flag

    "What's wrong with my stock?"

    Despite some repeated arguments and assurances here that 011 most likely is a winner, the price of OGXI has virtually been cut in half in less than a year. What happened? The obvious answer is that there's more selling than buying going on. Most longs have (correctly) been pointing the finger at Fidelity's relentless selling, and sleeping at night secure in the knowledge that a big fund can sell for a variety of reasons - i.e., Fidelity's selling isn't necessarily a vote of no-confidence. However, with the release of the latest 13Fs, we see that Fidelity hasn't been the only whale distancing itself from this ship, During 2Q, Jeffrey R Jay, another one of OGXI's biggest institutional shareholders, reduced his fund's exposure to OGXI by almost half. So, now it's not just Fidelity acting alone for the mysterious reasons that big funds sometimes have for doing what they do. Now, we have two of OGXI's biggest fish swimming away even as Summer and others here vigorously rebut anyone who dares call into question 011's Ph II results and the lack of good news from Ph III. Big thumbs down for me, but I, for one, am not surprised. Although some here have argued that no bad news counts as good news, Fidelity and JRJ probably wouldn't be selling so much if they shared that opinion. I happen to interpret Fidelity's and JRJ's selling as votes of no confidence, but even more so, I view management's decision to enter into a ATM facility as the biggest vote of no confidence of them all. I fully expect the the facility to be used, and have to question why management wouldn't simply wait to launch a proper secondary after the 011 Ph III results were disclosed if they had as much confidence in the Ph II data as Summer does. Perhaps JRJ felt the same way. Disclosure: I'm an under water long like most of you.

    Sentiment: Hold

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    • Recent institutional holdings are a mixed bag that it's hard to draw any conclusions from. If you Google "OGXI institutional holdings" and select the Nasdaq site, you'll find that there were 14 new positions totaling 623,000 shares and 8 sold out positions totaling 164,000 shares; 32 increased positions totaling 922,000 shares and 28 decreased positions totaling 1.23 million shares. It's true that the biggest position changes were decreases by Fidelity and Jeffrey Jay, but Fidelity still holds 460,000 shares and Jay 347,000. Sabby Management added almost 200,000 shares and J. Goldman took a new position of 223,000 shares.

      Admittedly, since it's an open-label trial, meaning the investigators know which of their patients are getting 011 and which are getting docetaxel (though they and OGXI and Teva are blinded as to the aggregate results), there's always a possibility of a leak. But given that the results are 8 or 9 months away, a meaningful leak at this time seems unlikely. If anyone would have a sense of how things are going it would be Teva. But they've also sent mixed signals: they said almost nothing about 011 in their strategic presentation last December but they've continued to fund not only SYNERGY but the AFFINITY and ENSPIRIT trials. And Cormack said in the CC last week that enrollment in AFFINITY is expected to be completed in the second half of 2014. That means that even if SYNERGY fails, there will be another P3 prostate trial (in second line with Jevtana) that will go to completion and will likely report data in 2015 (since second line patients don't live that long following treatment).

    • It is very unlikely that OGXI will not raise funds in advance of the phase III results. If they do it should not be looked on as a negative but just a prudent business move. Most small biotechs in their position would and if O11 fails they will look like idiots for not raising and will be forced to dilute at much lower prices to keep supporting the many 427 phase II's. I doubt that they will use the ATM for much of their financing. If the do it will be in the run up a month or so pre O11 results.
      The market is expecting a raise and the big boys won't jump in until it is done in my opinion.
      I also don't understand why they do not release results from the first 427 study that they have on their slides as reading out in Q1 2013. That's the part that bugs me!!

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