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ONYX Pharmaceuticals, Inc. Message Board

bearofbleecker 369 posts  |  Last Activity: 2 hours 45 minutes ago Member since: Jul 27, 2000
  • bearofbleecker bearofbleecker Jan 6, 2015 11:45 PM Flag

    Interesting post.

  • bearofbleecker bearofbleecker Jan 5, 2015 6:45 PM Flag

    To amplify a bit, I note that XOM has recovered 4.4% from its December lows; CVX has recovered 8%. CLMT is up 16.7% from its December low of 19.76.

  • Seems to me that this dips every day, but rebounds much more strongly than the rest of the energy stocks. I have been buying into these intraday dips and now own a lot more of this than I'd planned on. Unlike most energy stocks, it is still well off its oilcrash lows.

  • Reply to

    What am I missing?

    by frankdlas Jan 4, 2015 4:41 PM
    bearofbleecker bearofbleecker Jan 4, 2015 11:00 PM Flag

    All four of these points are incorrect.

  • Reply to

    GILD stock price estimates

    by rookie_4488 Jan 3, 2015 10:59 AM
    bearofbleecker bearofbleecker Jan 3, 2015 4:13 PM Flag

    Jdjunk's analysis is about right, I think. I personally think the stock is stuck here at 95 until script trends become clearer. We should also note that they are now under some competitive pressure in the HIV market and that if Harvoni -and/ or the ABBV combo - is widely adopted, the profitable part of the HepC market eventually goes away. (not a lot of money in polio vaccine these days) Also, the ABBV/ESRX deal represents a real failure on the part of GILD's management. Ultimately, the future of this company depends on building their pipeline, whether through successful trials or using all that income for smart acquisitions. They've been able to do it in the past, so let's see. Due to all of the above, however, this stock is a much smaller part of my portfolio than it was two months ago.

  • Reply to

    Bright Side Glass Half Full

    by choo2choo Jan 2, 2015 2:26 PM
    bearofbleecker bearofbleecker Jan 3, 2015 4:01 PM Flag

    Okay, now I've looked at the hedging slide from the December presentation, and am prepared to display my ignorance of the subject: First, I assume that the hedges here are the "crack spread" - the assumed difference between crude oil and the finished product. I note that the only major hedge for 2015 is for diesel at an average of $26.59 a barrel. I also note that in the last quarter, while oil prices were declining, they recorded a $22 million benefit from hedging. While in the prior two quarters, while oil was rising or relatively stable, they recorded a hedging loss of about that same amount. (We should also note that these are noncash charges and affect only EBITDA.) This suggests to my nonexpert eye that this hedge may benefit them further in this quarter. I also note that diesel prices have not fallen nearly as fast as gasoline, and that diesel prices in N Dakota have been particularly strong. We should also note that the majority of their income comes from the specialty lubricants business, where they have a wide moat. All in all, I say it's worth buying more on the weakness which tends to show up early in the session. Now maybe someone from Texas can explain how wrong I am. (This is the main reason why I'm generally reluctant to invest in energy companies: There are office buildings in Houston full of guys who do nothing but this stuff. On the other hand, a lot of those buildings used to be full of guys working for ENRON.)

  • Reply to

    Bright Side Glass Half Full

    by choo2choo Jan 2, 2015 2:26 PM
    bearofbleecker bearofbleecker Jan 3, 2015 3:14 PM Flag

    I think you probably know more about this company than I do. I will see if I can access the December presentation, although hedging calculations are not my long suit. I think that if they overpaid for feedstock for a year or so it would not materially damage their prospects. Maybe someone more knowledgeable can comment.

  • bearofbleecker bearofbleecker Jan 3, 2015 3:11 PM Flag

    PS PCYC's consensus earnings estimate for next year is 27 cents ...although that is bracketed by a high estimate of 2.76 and a low of (2.52). PCYC is above 124 at the moment. Net: These comparisons are meaningless. Whether we like it or not, the market is evaluating GILD as a mature stock and some of these others as growth stocks.

  • bearofbleecker bearofbleecker Jan 3, 2015 3:01 PM Flag

    Well, the two are different in a number of ways. MDVN's only drug at the moment, Xtandi, is getting approved for much broader use in prostate cancer. (And, unlike GILD's HepC drugs, it doesn't have the unfortunate characteristic of CURING the disease. There will, for the foreseeable future, be an ever increasing pool of MCRPC patients using Xtandi.) Xtandi is also showing some encouraging results in triple negative breast cancer trials, a very large unmet need. So there is the possibility of major longterm upside there. Also, there is the possibility of MDVN being acquired by Astellas or someone else. GILD, at this point, is a little too big to swallow. Interestingly, though, the ABBV deal with ESRX seems to have dropped MDVN about 10% ...even though Zytiga, the strongest alternative to Xtandi, isn't an entirely satisfactory substitute. And MCRPC patients don't have that much time to waste on inferior treatments. If you had owned MDVN for the past 5 years, you would have made 433% on your investment, vs the puny 326% returned by GILD. Nothing wrong with owning both stocks, I think.

  • Reply to

    Bright Side Glass Half Full

    by choo2choo Jan 2, 2015 2:26 PM
    bearofbleecker bearofbleecker Jan 3, 2015 2:07 PM Flag

    I will offer the radical idea that even if they cut the dividend - which I don't think they will - the stock will be fine. Meanwhile, we are trending up even in the face of the weakness in oil prices.

  • Reply to

    Should I buy abbV?

    by peavel Jan 3, 2015 2:21 AM
    bearofbleecker bearofbleecker Jan 3, 2015 1:22 PM Flag

    ABBV was a good hedge against GILD for about a month - it peaked at about 70 well before their HepC combo was approved. Which is to say, the smart money used the near certainty of approval as a trading opportunity - but no one really wanted to hold the stock. The company has a major problem with the expiration of their Humira patent on the horizon and no important new drug to take its place. (Remember, this was a company which was grasping at Shire like a drowning man - or vice versa -, before that deal fell through. When a company's best strategy for growth is a tax inversion scheme, you have to question their long term prospects.) Their deal with Express Scripts also smacks of desperation. And I would expect them to lose their patent fight with GILD, which is also a long shot. If I were going to add another biopharm stock, I would much prefer CELG, which has a major winner in Otezla.
    However, if you are long a lot of GILD shares, as you say, perhaps adding shares of another large biopharm is not the best strategy. I am always astounded by the number of people here who have tied their financial future to this one stock. I would pare back on my GILD holdings and, if you really think biopharm is your best shot at appreciation, spread some into earlier stage companies. These always offer the possibility of rapid appreciation upon FDA approvals or good trial results. They also offer the possibility of steep drops upon FDA nonapprovals or poor trial results, so you should own several. Then consider the strange idea of owning some stocks in other sectors. While most here have been waiting in vain for GILD to reach 120 over the past two and a half months, for example, AAL has almost doubled. Consider owning a financial stock as a hedge against the Fed raising rates. Or even an ETF concentrated in European stocks on the possibility of a recovery there. While we sit transfixed by GILD, in other words, we miss other opportunities.

  • Reply to

    Infestation of morons all of a sudden...

    by sr.cosa Dec 30, 2014 10:28 AM
    bearofbleecker bearofbleecker Jan 2, 2015 3:44 PM Flag

    Happy New Year to you, too, Freddy. You must have escaped to somewhere remote if you were able to miss the ABBV/GILD/ESRX kerfuffle. I don't think we will ever really know GILD's precise pricing policy. Incidentally, I note that since the 19'th, when all of this came down, MDVN's price has dropped about 10%. As have a lot of those with expensive drugs. The smart thing to do was to short the ones you didn't own to hedge the ones you did own. Good luck in 2015.

  • Reply to

    Infestation of morons all of a sudden...

    by sr.cosa Dec 30, 2014 10:28 AM
    bearofbleecker bearofbleecker Dec 31, 2014 5:30 PM Flag

    It would seem strange to be taking profits here, when you could wait another day and not owe the taxes until next year. I think we forget about the great euphoria ahead of the last earnings, when the stock had a strong base at 110. Many retail investors, convinced that this was going to 120 by yearend, bought in there. I don't think this will really recover until there is more visibility on the script trends. I added a couple of hundred shares today. No reason why this can't get back to 100 as soon as its evident that ABBV is not going to get more than a small slice of the pie, even with ESRX's backing.

  • bearofbleecker by bearofbleecker Dec 31, 2014 5:19 PM Flag

    XOM made a low of 86.41 on Dec. 16. Since then, it has recovered to 92.45. On Dec. 16, ARII was at 48.11. Since then, it has recovered to 51.50. In other words, both stocks have recovered about 7%. The paradox is that, over the past 90 days, the consensus 2015 earnings estimate for XOM has fallen from 7.60 to 5.68, while the 2015 consensus for ARII has actually risen from 4.82 to 5.08. Obviously, an integrated oil producer is a very different animal from a railcar builder/leaser. But to me, ARII at 51.50 looks like a much better buy than XOM at 92.45. The last time XOM traded in this range, on Oct. 28, DIG - now at 54 - was at 65.

  • bearofbleecker bearofbleecker Dec 30, 2014 5:09 PM Flag

    Well, I hope that your investment in GILD is profitable, but the fact that this virus is no longer infecting you is more valuable. There are hundreds of thousands of HIV+ individuals who are alive and healthy thanks to this company and their brilliant scientists. I don't care whether they make $12 billion or a buck, ..they're a great company.

  • bearofbleecker bearofbleecker Dec 28, 2014 2:43 PM Flag

    Nah, those 90 puts are never going to get into the money again.

  • Where are the visionary bulls of yesterday, who (along with myself) blithely assumed 120 by yearend? I repositioned myself in this yesterday, but will never again own the large chunks of it I once held. And, after having lightened up on a lot of pharma stocks after the ABBV/ESRX deal, I will be more cautious about owning them in the future, as I think many fund managers will. The basic assumption that the insurance companies and PBM's would pay for the superior treatment, whatever its cost, has been called into question.

  • Reply to

    The failure of GILD management.

    by bearofbleecker Dec 22, 2014 8:18 PM
    bearofbleecker bearofbleecker Dec 22, 2014 11:21 PM Flag

    I assume that you're replying to bagholder54, who obviously has the experience and knowledge. And, like you, I assumed that Gilead management had a plan. Wrong. I think this is a new paradigm. Basically, ESRX has said, " Okay, it may not be the best drug, but it's the cheapest drug, and that's what you're getting."

  • Reply to

    The failure of GILD management.

    by bearofbleecker Dec 22, 2014 8:18 PM
    bearofbleecker bearofbleecker Dec 22, 2014 11:16 PM Flag

    Henry Ford was a management genius. Until he was wrong.

  • Reply to

    The failure of GILD management.

    by bearofbleecker Dec 22, 2014 8:18 PM
    bearofbleecker bearofbleecker Dec 22, 2014 11:11 PM Flag

    Considering that you basically put out the warning flags which virtually no one (including the analysts) saw, your modesty is quaint. The difference between your viewpoint and the common wisdom is a mere $20 billion. Kudos.

ONXX
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