Too early to make an efficacy call on SCD. There are two months before we get the first data on SCD and a major update on BT. It's probably OK to assume that there have been no safety issues so far. I'd expect a PR if a case of leukemia occurred, and that would crush the stock, it's what I worry about most.
I think it's the large increase in residential construction loans. They are short term and high profit, but they can literally go to zero in no time flat. Look what happened in CA and FL in 2008. Half built houses and ghost subdivisions. Hate to be holding that bag in a recession or banking crisis. The current loan loss reserves are adequate for normal times but that's all. It's a lucrative niche, but if it's one that the company continues to expand on, I'll be cashing out. I'd rather see the company grow life insurance and the conforming mortgage business.
Convertible security holders have every incentive to short once the stock reaches the conversion price. At that price, they get 100% of their money back, and a free interest check every six months to boot. If the stock price falls, they can cover for extra profit. If the stock price rises, they convert when the bond becomes due and the stock covers the short position.
I'll summarize the transcript in five words... study, study, study, study, study. This is a crowd of academic researchers. There is so much that we don't know. Lives are at stake, no stone should be left unturned. We need to advance the frontiers of science and technology. Amen, brothers and sisters!
Pediatric cancers are relatively rare and won't make you a lot of money. Nektar is a for-profit business (no snickers, please!). It is not a research institute nor a charitable treatment center. The company has to pick its shots very carefully. The company is spending y-o-u-r money, after all.
Getting Movantik to the preferred tier is about convincing insurance companies that it treats an important medical condition rather than one that is simply inconvenient. A bowel obstruction that requires medical intervention obviously qualifies. Discomfort, probably not so much. That is AZN's challenge.
Contrast this with OREX drug Contrave. Contrave is also tier 3 on my medical insurance. The market cap of OREX is ridiculously bloated compared to current sales. But if the subsequent data confirms that Contrave is CV beneficial, there is a good case for moving it up to tier 2, which would juice sales and give physicians more reasons to prescribe it.
If patients pay zero due to AZN subsidized copay cards, then NKTR will get 20% of what?
Reminds me of the old joke, we lose money on every sale but we make it up in volume.
Author is definitely not an old timer. He says KLIC is undervalued based on cash horde and sales projections based on past few years' performance. He pays only lip service to a potential slowdown in the chip biz.
What's your copay for non-preferred drugs? Does your insurance require a coverage review and if so, what happens if it is denied?
I can see approval for all insurances if a patient requires ER treatment or hospitalization for opioid induced bowel obstruction.
Here's something you and everyone else should do. Check your health insurance policy and see what the copay/coinsurance is for different classes of drugs. There will probably be at least three levels. Typically there will be one for generics, one for branded formulary drugs, and a third for drugs not on the formulary. Then look up Amitiza on your insurance drug list and see what category it falls in. Amitiza is a nonpreferred drug as listed below with my insurance. Your insurance may be different. Let us know what you find.
"This is the most restrictive formulary. If a prescription is written for a medication that is not on the formulary, the patient will be responsible for the full cost. If special circumstances necessitate that the patient take the nonpreferred drug, prescribers may request a coverage review. If coverage is approved, the medication will be covered. If coverage is not approved, the patient will be responsible for the full cost of the medication."
All the non-performing construction loans are off the books. With that came a large decrease in loan loss reserves, which are down to $1.7M. There is a large increase in residential construction loans on the books. Those are short term but high risk if the housing market turns suddenly.
Copay is far more relevant to patients than list price. My insurance has three tiers. In general, tier 1 is generics, tier 2 is formulary brand name drugs, tier 3 is drugs that are not covered. The higher the tier, the higher the copay. I have to pay nearly full list price for drugs in tier 3. Most insurances are similar. AZN has to get Movantik on to the tier 2 equivalent to generate strong sales. Amitiza is tier 3 in my insurance plan. A one month prescription is a bit over $300. AZN said it would price Movantik similarly. It's safe to say that not many patients will pay close to $4000/year for Movantik, especially when you can start with a 25 pack of biscodyl for a buck at Dollar Tree.
All true cow. But the issue is whether this is enough for big pharma to pay up for NKTR-102. Or is NKTR still at the point of having to pick a target and go from there? No matter who runs the studies, the results won't be ready for another six or seven years. The synergies have been known for a long time. Big pharma is already running Phase 3's on combos with parp inhibitors. Will they partner for a drug that failed its only Phase 3?
It appears that the developers of parp-inhibitors are taking a page from the Avastin playbook. That is, start with a treatment from the standard protocol, combine it with a parp-inhibitor, and see if efficacy is improved. It's a safe bet that there was a lot of preclinical work to prioritize the study targets.
That leaves the ball in Nektar's court. HR will have to convince big pharma that combining with NKTR-102 will produce results superior to that from combining with standard treatments. Failing that, it will be up to NKTR to pick targets and run studies on the combo.
Research time! Are there combos involving parp inhibitors with other drugs, both approved and unapproved, currently in the clinic? How do the results with NKTR-102 compare with other preclinical studies involving parp inhibitor combos? Time to scour ASCO and other conference abstracts, drug company web sites too.
I don't have the foggiest idea of the answers to these questions. It should be part of our due diligence. Let's get some good discussion going.