I did well going long on PCYC and now that ibrutinib is in the hands I am shorting PCYC and banking much of my portfolio on this move. PCYC is a hot favorite among investors, but as an experienced and recently retired executive from the pharmaceutical industry I have seen wonder companies rise and flame out again and again.
In this case my explorations among thousands of industry contracts steers me toward being disappointed in the prospects for PCYC. There is no doubt ibrutinib is a wonder drug and perhaps the great discover in this space in the history of hematology/oncology products. It would be successful, perhaps the next blockbuster, if PCYC management had any pharmaceutical industry experience whatsoever. They do not. As a result investors are going to be sorely disappointed if and when the FDA decides the drug's future.
In my 30 years of leadership in the pharmaceutical industry I have seen many small biopharma companies come and go. In many cases the value of the science had little to do with the company's failure. In all cases the failure was do to poor management. Among those failures the majority were a result of a biopharma company having management experience in this extremely heavily regulated industry. This lack of industry experience is what will lead to disappointment among PCYC investors.
I have heard that the proximate cause of disappointment will be a result of the inexperience and lack of cultural understanding on the part of PCYC's COO. I understand she follows a 1950's management style, rewarding sycophants while punishing messengers who bring her bad news. Unfortunately, in this highly regulated industry it is foolish, if not corporately fatal, to ignore bad news. A positive attitude will absolutely not change the outcome of a clinical trial. Devoting massive financial resources will not accelerate a clinical trial. (continued in part 2)
Sentiment: Strong Buy
IBRUTINIB: DREAM TEAM OF MARKETING.John McCamant, of The Life Sciences Report (9/26/13), wrote:
As the days count down for ibrutinib's FDA approval, the company has enlisted a truly impressive lineup to launch in the U.S. The company has prepared its sales, marketing and medical affairs departments, led by experienced industry executives from the crème de la crème of biopharmaceutical companies.
For example, the executive vice president of sales and marketing, Paula Boultbee, joined from the company after working at Amgen Inc. (AMGN:NASDAQ), where she was involved in the development of Vectibix (panitumumab)—and, more importantly, led the global launch of Gleevec (imatinib) while at Novartis AG (NVS:NYSE). Vice president of sales Michael Crum arrived in January after 13 years at Genentech (Roche Holding AG (RHHBY:OTCQX)), cross-trained in selling cancer treatments including Rituxan (rituximab), Avastin (bevacizumab) and Herceptin (trastuzumab). A total of 62 sales representatives are ready once the FDA grants a label. Janssen Biotech Inc. (a division of Johnson & Johnson [JNJ:NYSE]) already has an oncology sales organization in place. While Pharmacyclics records all U.S. sales, some investors may forget that the company is working with Janssen—maybe the most powerful global sales force around—domestically as well, while Johnson & Johnson prepares for international launches. In addition, medical affairs with four specific functional teams are also in place—medical sciences, medical communications, medical Information and medical science liaisons.
In a nutshell, Pharmacyclics is ready. We remain confident that FDA approval will happen sooner than expected, and that the rollout of ibrutinib will be bigger than current forecasts. In our view, ibrutinib is the safest and best cancer drug to date, and is poised to blow away analysts' estimates upon FDA approval
Glaxo and AstraZeneca among others. You'll soon see that I'm not a blowhard. I predict PCYC at $60 by the end of the year. PCYC controls the partnership and their inexperienced management has made many poor decisions perhaps because of their lack of pharmaceutical industry experience. Just wait and see. Please, buy away and let's run up that price before the fall.
Sentiment: Strong Buy
This could also go to $300 in a heartbeat, as Cramer said a few weeks ago, this stock can double and still be in line with its peers. I say it will be at a premium to its peers given the enormity of this breakthrough drug, this will have no peers if Ibrutinib is as good as everyone believes.
Sounds like a high price? So was $100 when it was sitting at $2.00.
im long but can understand a short due to the lack of news and consequently drifting lower on low volume but into earnings and approval mid Dec. i think well start the rise. as for the launch j&j will be the drive.
COO has been in place since 2008. Please give us your credentials in more detail re: your "30 years of leadership in the pharma. industry". And what is your source when you say "I have heard that the proximate cause.......". Throwing out unsubstantiated statements does not make you credible. Give us more info about yourself and your "sources".
Possibly PCYC got lucky with Ibrutinib (getting to this point despite being weak operationally) but the drug is now already in the hands of JNJ and the word on the street is that JNJ has already assembled and planned to hit the ground running with one of the largest and most organized (pre FDA approval) sales forces in the history of biotech. For that reason alone I believe your thesis, though well thought out, is not sound. Be careful sir this is a very dangerous company to short.
You are overly kind to this fellow, who rails on about the lack of experience of PCYC management while neglecting to mention that JNJ/Jannsen are not exactly babes in the woods. If I had "30 years of leadership in the pharmaceutical industry" and "thousands of industry contacts", I'd be looking for something to buy, not something to short. I'm guessing that "recently retired" means recently canned and that all of the gratuitous shots at the inexperience of the PCYC management is simply a way of expressing his disappointment at not being hired there. I'd be more impressed with someone who had shorted ARIA.