This is the result you can expect when a lot of momentum day traders get in the game. They really don't do their HW except react fast and furiously like yesterday and today. 1st, the news about lowering the dose is a non event. It has no impact at all. If anything it shows the drug is working well in combo and that the higher dose had to be lowered due to toxicity which is not surprising. Cabo is known to have toxicity at higher doses in many previous studies and dose titration was a key to its success. In fact for many small molecule drugs (or even biologics) adverse events (AE or toxicity) is an indication that the drug is working. What you dont want is all toxicity but no efficacy. In many cases the toxicity or AEs are "managed" by lowering dose, having a "holiday" between doses, etc etc. But the key especially in cancer drugs is to have benefit (ie efficacy). So I would say that Nivo + Cabo update is overall positive not negative.
The other concern about the competitor's drug being better? Well that's we are talking about Phase I trials. You know how many years it will take to conduct a registrational trial (even if it is fast tracked and has stellar Phase II results) at least 4-5 years before it is approved! And phase I trial results are usually way better than what you expect in real large Phase II or III results. So I am not worried at all. And by then Cabo will be firmly established and will have a much larger set of data than anyone can undermine as a new comer.
What is important to keep in mind is :
1. How are the sales of Cabo going? Does the trajectory in the next few quarters look good or will it plateau?
2. How are the sales of Cobi (by Roche/genentech) going?
3. Is the HCC data going to be posisitve? While this is still going to be a much smaller indication, it will still add $4-$5 to the stock price. If not successful then it should not really bring the pps down that much. But you can bet the traders will jump out and we will see a temporary dip
Sales trajectory for Cabo looks excellent..and the launch just started!! With the # of shares I hold, I hope to be able to retire!! If it does not get bought by a BP in the next 2 years (which is very unlikely), $50 in 3-5 years is possible. Thank you EXEL