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Exelixis, Inc. Message Board

erniewerner 310 posts  |  Last Activity: Jul 15, 2016 11:37 AM Member since: Jan 18, 2000
  • Reply to

    Option question, anyone?

    by rrpoker16 Jun 14, 2016 12:16 PM
    erniewerner erniewerner Jun 14, 2016 4:22 PM Flag

    "Why would traders with July call options work to hold the stock below 8? It makes absolutely no sense what so ever..."

    Salty, there's a difference between "writing" options and "holding" options.

    "I'm not following you with the July $8s, open interest is only 546 and today's vol is only 150, you see that as a lot of pressure?"

    Don't know what to tell you. The quote I lifted about the unusual activity was a FlyOnTheWall alert that crossed the wire at 2:45pm. It specifically mentioned the Jul 8's.

  • Reply to

    Option question, anyone?

    by rrpoker16 Jun 14, 2016 12:16 PM
    erniewerner erniewerner Jun 14, 2016 3:00 PM Flag

    "The Aug 8 call options now have a much wider spread .40b .85a, why is that? When I bought 50 calls last week it was 45/55 and I hit filled at .50"

    "Bullish option flow detected in Exelixis(EXEL) with 3,425 calls trading, 2x expected, and implied vol increasing over 8 points to 65.18%. Jan-17 7 calls and Jul-16 8 calls are the most active options, with total volume in those strikes near 3,100 contracts. The Put/Call Ratio is 0.00."

    I don't usually trade options. I see the above and even though they call it bullish, what I focus on is all the traders who wrote those July 8's working to hold the stock below 8 while the premium slowly erodes over the next 30 days. That's a lot of pressure. I really hope it works for you between now and then.

  • Reply to

    Clear & Present Danger

    by wilderguide Jun 14, 2016 12:10 AM
    erniewerner erniewerner Jun 14, 2016 12:11 PM Flag

    "#I'mwithyouernie, just repurchased small trading position@ 7.22."

    Extra credit for being clever. I need to get back to 7.31 just to pay my commission and cover dinner at the Golden Corral and you'll be eating more of that endangered species Sea Bass at the Red Lobster.

  • Reply to

    HCC trials enrolling

    by wilderguide Jun 14, 2016 11:22 AM
    erniewerner erniewerner Jun 14, 2016 11:37 AM Flag

    Tivantinib also had to screen for high MET which cuts down on the patient pool and in most cases involves a liver biopsy. I would really like a meaningful update on their progress.

    "The trial design has become virtually obsolete."

    Even if it slips into the salvage drug of choice position, it is still a reasonable return on investment. Right now there Is only Sorafenib. By the time Cabo is approved, there may be 4-5 drugs to chose from. It all comes down to a comparison of the data.

  • Reply to

    Clear & Present Danger

    by wilderguide Jun 14, 2016 12:10 AM
    erniewerner erniewerner Jun 14, 2016 11:29 AM Flag

    "What do you think about the prospects for combining Tasquinimod with Cabo?"

    It sounds reasonable, but the likely time horizon is beyond the limit of my endurance. It would take a year to get into the clinic and then dose ranging studies can't be rushed. Unless the efficacy is really obvious with high ORR, then add a few more years of randomized ph 2 work.

  • Reply to

    Clear & Present Danger

    by wilderguide Jun 14, 2016 12:10 AM
    erniewerner erniewerner Jun 14, 2016 10:53 AM Flag

    "..one would hope Papadapolous and the rest of BOD had something to do with MMM changing from "getting the band back together" to in-license compounds."

    Better idea than going back to scratch and hiring 200 researchers. I would still prefer they just let the moving parts keep moving and not make any major expansion or acquisition moves.

    "It's time to get cabo in the hands of a BigPharm where it can be fully and rapidly developed into it's full potential. There's too much competition to wait for revenues to kick in to start more trials. EXEL has already missed too many opportunities."

    Amen to that! Bought more @ 7.28.

  • Reply to

    I smell An Upgrade coming

    by newfoundinvestment Jun 14, 2016 9:28 AM
    erniewerner erniewerner Jun 14, 2016 9:56 AM Flag

    I think all the ratings adjustments attributable to ASCO are complete. Picked up some trading shares @ 7.34.

  • Reply to

    Clear & Present Danger

    by wilderguide Jun 14, 2016 12:10 AM
    erniewerner erniewerner Jun 14, 2016 9:23 AM Flag

    "I always thought that our bear traffic was from trading groups."

    Perhaps. Nomad in his various incarnations was here for 5+ years and Semanresu for at least a year and a half. They spent a lot of time just learning the various posters and it sure felt personal rather than just a cubicle drone doing a quick drive by.

    "Maybe management does plan to get the "band back together again.""

    There are two options to get replenishing the pipeline beyond Cabo and Cobi. The can do their own in house development and/or in license compounds from other companies. Both notions were actually floated by MMM. Getting the band back together was a MMM reference in an interview a year ago.

    “The issue is just having a strong cash position,” says Morrissey. “If we’re successful with the milestones coming up, you could see a resurgence from us. The goal is to get back to our roots and rebuild the portfolio.”

    More recently, at ASCO this year he talked about in licensing compounds.

  • Reply to

    Buyout Fodder

    by duckduffer Jun 13, 2016 7:59 PM
    erniewerner erniewerner Jun 13, 2016 9:53 PM Flag

    "That is my lowest SWAG buyout number that Dr Papadapolous would support. If you don't believe me, I suggest you call him."

    Hello, Dr. Papadapolous. Yes Sir, my name is Ernie Werner. You say my name is familiar, well then you must read the Yahoo message board for Exelixis. Yes Sir, catchy name you came up with there. Yes it is a good group of guys and we are very much into all things Exelixis. Yes Sir, I am the obnoxious one that keeps skimming nickels and dimes, sorry about that Sir. Anyways, Duck said I should call and find out what your bottom line number is for a buyout scenario. No Sir, he isn't a duck, that's his name and he's actually a Duck Duffer. We also have a Hymenshocker and several other interesting characters. Anyways Doc about that bottom line number. Okay I've got it Doc and you say it'll be ready to go right after Celestial top line, eh. What's that Doc? I have to keep it secret. Nice talking to you Doc, take care. Click.

  • Reply to

    Buyout Fodder

    by duckduffer Jun 13, 2016 7:59 PM
    erniewerner erniewerner Jun 13, 2016 9:34 PM Flag

    "Outstanding stock options, unvested RSUs and ESPP contributions ...... 28,470"

    I believe all of these are owned by employees and former employees of the company. 28,470 is actually 28,470,000. Most of these are options issued with a strike price much lower that todays close of $7.38. Just as a swag, lets say the average strike price is $5. A buyout at $15 per share represents a $284.7 M windfall for this group. That does not count appreciation on shares of stock they own. I would call that incentive.

  • I noticed a headline for IMGN. They are issuing 100M in convertible debt. They have a clean balance sheet, but the stock share price is at a 6 year low so obviously management does not want to do a secondary with cheap shares. IMGN is a one hit wonder (Kadcyla). They have a plethora of partnerships with most of the big name pharmas, but they just can't seem to get lucky again and have another big winner.

  • Reply to

    Buyout Fodder

    by duckduffer Jun 13, 2016 7:59 PM
    erniewerner erniewerner Jun 13, 2016 9:09 PM Flag

    Another reason to wait for the Celestial readout is the performance award of options. Right after Meteor was announced a boatload of form 4's came through with one time option awards for senior executives tied to the successful conclusion of the trial. I would guess something similar will happen if/when Celestial reads out positively.

  • Reply to

    Buyout Fodder

    by duckduffer Jun 13, 2016 7:59 PM
    erniewerner erniewerner Jun 13, 2016 9:04 PM Flag

    If anyone in interested, the 2015 annual report has a list of potentially dilutive shares. It is on p.117. It lists 28+M options, 1 M warrants and attributes 88 M shares to the converts. I'm not sure where 88M comes from. It may be a worst case scenario if the full effect of the "make whole" provision were to be triggered. I get a convert dilution effect of 54 M shares. 287,500,000 divided by 1000 times 188.

  • Reply to

    Buyout Fodder

    by duckduffer Jun 13, 2016 7:59 PM
    erniewerner erniewerner Jun 13, 2016 8:41 PM Flag

    Pretty good Duck. The only thing I will point out is that the convert holders get a piece of the buyout also. Each bond is good for 188.XX shares and in the event of a change in control, the bonds are paid off at the buyout price times the conversion rate (188 and a small fraction). Also I think building in the HCC revenue may mean waiting for Celestial, which I think puts you in the same frame of mind as myself regarding the timing of a likely buyout event.

  • Reply to

    First buy of the day

    by erniewerner Jun 13, 2016 10:03 AM
    erniewerner erniewerner Jun 13, 2016 6:14 PM Flag

    "Hey Ernie .06 profit, how many shares are you dealing with these trades?"

    Enough to make it worthwhile.

    "I know you like to remain discipline, but I would have held out for a bit more this time lol"

    Fair enough, but the difference is that for you it is hypothetical, and hypothetically, you would have made more money. But for me it wasn't hypothetical and despite the stock finishing flat, I made a few bucks. Hey, it's another Big Mac day, but there's always tomorrow.

  • erniewerner erniewerner Jun 13, 2016 4:36 PM Flag

    "Interesting, I looked them up and they are being priced as if the business model will blow up. The also have a 6% dividend. Is their business sustainable?"

    I think it's worth more than the market is giving it credit for, but it's management will pay a measly dividend and continue to ride the gravy train indefinitely. Of course the business is not sustainable, once the portfolio is obsolete and not generating any more royalties it will reach insolvency.

    "In hindsite, what do you think of Genentech's buyout of Onyx?"

    I did jump into the middle of that one and turned it into a nice trade. I think Onyx did a pretty good job for its investors. I think Amgen was cash flush. They are continuing to develop Kyprolis and Sorafenib is still a cash cow throwing off good revenue. Onyx had a deep pipeline with a good mix of approved drugs and promising candidates. They also fill a hole in Amgen's research expertise and part of the large sum Amgen paid was based on the value of the drug discovery platform.

  • erniewerner erniewerner Jun 13, 2016 2:42 PM Flag

    " the pipeline needs to be replenished beyond Cabo and Cobi"
    Why? We are talking about valuations in the next several years. You have extrapolated that out further IMO. If in 2-3 years EXEL is spinning off earnings of $2PPS, the pipeline isn't going to prevent the company from having a 10 multiple.

    Why? I have a better answer than because. I like to talk in terms of examples and I have one. Back in the days before fully synthetic and fully human antibodies as drugs there was a company called Protein Design Laboratories. It has since changed its name to PDL and trades as PDLI. They had a niche technology. They could take a rodent antibody and humanize it by replacing distinctly rodent protein segments with human segments. The end product was less likely to elicit a directed HAMA (human anti-mouse antibody) response that would neutralize the antibody drug before it accomplished its intended targeting. PDL would contract its services to companies with murine antibodies for upfront fees and royalty rights on drugs that reached commercialization. When it became evident that theirs was a mature technology, they put themselves up for sale. I don't know if there were any offers, but if so, they were not accepted. The company decided to evolve into a caretaker status and manage its portfolio of patents and royalty rights for the benfit of shareholders. Now I want you to look at a 10 year chart for PDLI and guess at what points this evolution occurred and then look at a current quote and see how close to a 10X multiple PDLI trades. Then also look at the salaries for the companies top executives. I never invested in PDLI, but I it was always on my radar as a competitor to Abgenix and Medarex which I did own.

  • Reply to

    First buy of the day

    by erniewerner Jun 13, 2016 10:03 AM
    erniewerner erniewerner Jun 13, 2016 11:53 AM Flag

    "Almost all retail so far. In the first 1.5 hours.."

    Slow day. Sold the 7.31 shares for 7.37. Good chance of getting back in in the 7.20's later.

  • erniewerner by erniewerner Jun 13, 2016 10:03 AM Flag

    $7.31

  • Reply to

    OT Argos

    by gizmondo123 Jun 13, 2016 8:55 AM
    erniewerner erniewerner Jun 13, 2016 10:02 AM Flag

    "We are excited by the IDMC's recommendation to continue with the trial," said Jeffrey D. Abbey, president and chief executive officer of Argos. "This is an important step for the ADAPT trial and for the clinical development of AGS-003."

    I don't follow Argos Giz, but let me share what this statement usually means. Interim analyses are conducted by the IDMC (Independent Data Monitoring Committee). Usually they are an opportunity to end a trial early if the drug shows exceptional efficacy. If the endpoint is not met, the IDMC will recommend that the trial continue to the next analysis. Sometimes interims incorporate a futility analysis. If a futility analysis reveals a very poor likelihood of a positive outcome, IDMC's will recommend discontinuation. Surviving a futility analysis is a positive thing and as such, most developmental companies will announce that fact. That it is not mentioned by Argos, very likely means that there was no futility analysis. So the only good news here is that there is not a strong safety signal or negative efficacy signal that would justify discontinuing the trial.

    About cancer vaccines in general. Investors have funded dozens of efforts at cancer vaccine development. All failed in the clinic except one (DNDN), and it failed commercially. I don't see any reason to expect Argos to change that trend.

EXEL
8.71+0.03(+0.35%)Jul 25 4:00 PMEDT