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InterMune, AŞ Message Board

  • duragen duragen Jan 20, 2009 11:21 AM Flag

    The risk of playing phase 3 data

    For those investors new to investing in important data events, like ITMN's upcoming phase 3 data for pirfenidone, take a look at AspenBio(APPY) today, their late stage data for an appendicitis diagnostic test failed, the stock is down 80 percent. So far in 2009, this is the third piece of bad data out of the biotech industry, RGN and OREX, also had poor data, no company that I track has released positive data for binary event(make or break), although ITMN's HCV drug and MNKD's diabetes drug has positive data, but not make or break type stuff. I'm still long, and hoping for positive data, but let APPY serve as a warning to the risk that is involved in these type of events.

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    • Duragen, thanks - your post covers part of what I was trying to say.

      Besides the similarities between US and Japan's regulatory systems, the other factor I think is key here is the utter lack of any other proven therapy for pulmonary fibrosis.

      Yes, there are certainly other compounds in development, but whether they work at all remains to be seen.

      Sure, FDA would not approve pirfenidone just on the Shionogi data alone (different patient populations), but the fact that Shionogi's phase III so clearly demonstrated proof of concept really means more to me than option pricing in an informational vacuum or failed products from biotech firms. This drug is NOT a biologic. It doesn't block a specific receptor, but alters many biological processes.

      As far as the lack of polished phase III results since ITMN concluded the data gathering portion of the study, I would suggest that Shionogi was much faster at pulling the numbers together - they are a much bigger company and have the apparatus and personnel in place for the job because they have many more drugs in the pipeline.

      ITMN probably relies more on CROs and consultants than in-house staff. I expect them to take longer to do the job. Also, the ITMN phase IIIs are spread out over many clinical sites...

      They'll hit the Jan-Feb timeframe and I fully expect them to match or exceed the Shionogi results. If we can believe Dan Welch, they may show greater potency due to the lack of dropouts in the placebo groups.

    • Beta, I think what Nada is eluding to is Japan is a country whose healthcare system is very similar to the US and EU. And their pharma companies are very well run, companies like Takeda, Daiichi Sankyo and Shinogi. Actually from what I've read about the Japanese regulatory system, its tougher then the FDA. Companies like Biomarin and Alexion, whose orphan drugs have been FDA approved for over a year, are just getting approval or just filing in Japan now.

    • The downside for ITMN is limited by the cash value of the shares which is about 4 dollars. So I could see it going to 4 on very bad data.

      I opened a neutral strangle position with put 7.50s and call 25s and call 30s.

      Its not going to move as much as either the bulls or bears would like. I expect mediocre data, or a delay releasing results.

    • when is the data supposed to be released?

    • amen brother. We are going to see a big move one way or another. I have played many of these types of situations in the past. I usually pick a side and then put on positions accordingly. I always back it up with taking just a big enough position on the other side to cover losses if I am wrong. One of the biggest gainers I ever had was buying puts on telk. That was some of the worst garbage science I had ever seen. The stock was at 17 and I loaded the boat with puts. I bought a few calls just in case I was wrong. If you recall, they released data on 3 trials all at once. They all failed miserably and the stock got crushed down to just a couple of bucks. The difficult play here is that the options have priced in just about zero chance for success. The puts are way too expensive to back up my call spread. I have pointed out before that you can put on a 10 point call spread for about 2 points. A similar put spread will cost you nearly 8 points. This is outrageous and indicative of the near zero chance for positive data.

      • 1 Reply to thesunneyone
      • Sunny, I remember Telcyta(for ovarian cancer), total dog, I was also short Telik for that one, also almost at the sametime, NFLD and their blood substitute, another dog I was short. I was long lastyear for both Acorda and Auxilluim, both had good data, my worst long ever in my trading career was Supergen, I was a big believer in Rubitecan(Orathecin) for pancreatic cancer, that was a big failure. The signs were on the walls for all those failures. Maybe I'm blind, but I don't see the signs of failure for pirf and ITMN.