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Exelixis, Inc. Message Board

erniewerner 217 posts  |  Last Activity: 59 minutes ago Member since: Jan 18, 2000
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  • erniewerner erniewerner 59 minutes ago Flag

    I've been saying "not yet" for a while now, but it's like a Texas Hold'em hand and we are almost at the point where enough cards are showing that the players may be getting close committing some serious cash. We don't have the Meteor results yet, but I suspect EXEL is shopping them around with the JV discussions. After Sep 26, they will be common knowledge and revenue projections will be less uncertain. At $12-13 bucks a share, an EXEL acquisition would pay for itself in 6 to 7 years and that leaves any new indications as extra frosting on the cake with the heavy lifting on HCC mostly done. With all the options already in managements hands, anything over $10 will make most of them multimillionaires. It's a bit of a game now for MMM and the BoD to try to pick the point in the ongoing news cycle that will maximize the value. It may be later this year or perhaps as Celestial nears readout or perhaps it will spin out of their control as it seems to be happening with Ariad. Sorry about all the tortured analogies.

  • Reply to

    Ariad-Best.........?

    by vette1967jc Aug 28, 2015 6:30 PM
    erniewerner erniewerner 17 hours ago Flag

    If the potential acquirer were Amgen or BMY I would pull the trigger on it Monday, but Baxalta is the subject of a semi-hostile takeover themselves. The situation is a bit unstable and it could easily fall apart with no outcome. Even so, $10 pps is not an unreasonable valuation for ARIA. I'll think about it some more but for the time being I'll probably just watch. If a deal gets done, my best guess is $15-$16.

  • Reply to

    when is next catalyst?

    by vin_007_13 Aug 26, 2015 12:28 PM
    erniewerner erniewerner Aug 29, 2015 11:00 AM Flag

    The PBC NDA submission was announced on June 29. FDA will notify the sponsor within 2 months of the acceptance of the submission and whether it merits a standard or priority review. Good chance something will be announced on Monday. Look at PBC as a preview for NASH.

  • Reply to

    Ariad-Best.........?

    by vette1967jc Aug 28, 2015 6:30 PM
    erniewerner erniewerner Aug 29, 2015 7:10 AM Flag

    "How does this compare to other Biotechs-including EXEL ?"

    Lots of interesting similarities between EXEL and ARIA. Both in that 1-2 b market cap range. Both with 1 approval, a second likely approvable drug, and lots of room to grow, but issues. ARIA has a better cash and debt situation, both have large short positions, both are in the TKI business at similar stages of development. I can see ARIA going for 3b, my guess is that 4 is a stretch, but we'll see. I wonder who leaked and why. It could be ARIA trying to put itself into play, or maybe not.

  • erniewerner erniewerner Aug 29, 2015 5:36 AM Flag

    "Does Aria have any reporting requirements if an offer was made???"

    You would think there should be a requirement, but there isn't. I recall Medarex negotiated with Bristol for nine months in complete secrecy. When the deal was finally announced it was a done deal with a big poison pill and lockouts that prevented any competitive offers. Best case for you guys is if ARIA's BoD leaked the story to Bloomberg to put the company in play and encourage a bidding war.

  • erniewerner erniewerner Aug 28, 2015 7:05 PM Flag

    I looked at it about a year ago and passed. I think one has to look at them as a one product company. I know they have ambitions on developing other diagnostics, but it is a competitive landscape and there are various approaches to detecting malignancy via blood testing. I think EXAS is a long shot in that regard, so I think the safest approach is to attach minimal value to their pipeline and decide if Cologuard justifies a 2+ billion market cap. I've had colonoscopies and I agree that as unpleasant as the Cologuard test is, it is still much preferable to the alternative. The problem is that even after a year, it isn't gaining traction. If last q's sales increased tenfold, it would have been a profit of $40m or 160m per year which would be a P/E multiple of about 14. So will sales increase tenfold? I think there is a good chance they will, but that just gets you to a reasonable multiple.

  • erniewerner erniewerner Aug 28, 2015 3:32 AM Flag

    "The "issue" is the convertible. EOS
    When it is resolved the pps will move."

    If that were true then EXEL is dead money until 2019 because the early call feature depends on a stock price over $6.90 for a defined period and that doesn't come into play until 2016. Despite the converts, the pps will move as the fundamental picture develops. The hedges are already in place, they can't short another 50 million shares to cap a steady event driven rise in price. Cobi approval, Meteor data, JV, Celestial full enrolment, Cabo approval, are all going to contribute positively. In addition there are a number of other, less certain, variable events that have the potential to move the share price. My best guess is that by this time next year the convert situation will be resolved. It will mean another 40+ million shares in circulation, but the hangover from the overhang will finally be over. We'll see.

  • Reply to

    Approval + 10MIL shares

    by licky_mywalker Aug 27, 2015 12:59 PM
    erniewerner erniewerner Aug 27, 2015 3:24 PM Flag

    It's tracked by the SEC and statistics are published twice a month. Go to the SEC website and search "Frequently Requested FOIA Document: Fails-to-Deliver Data" At the bottom of that page is a link for the current period and archived info. It is in a raw data text format, but the document can be word searched with Exelixis and all the fail to delivers will show up. Not all of those are naked shorts, but that's as close as you will come to what you are asking for. FWIW naked shorts don't stay naked for very long, brokers only get an additional day over the standard T+3 in which to borrow or purchase shares to cover the short.

  • Reply to

    Shorts....

    by m_mccruden Aug 27, 2015 9:10 AM
    erniewerner erniewerner Aug 27, 2015 1:33 PM Flag

    "Makes complete sense, no risk at all to them to keep shorting....unless....you consider the upside they will leave on the table by not having covered at say $5.85. Up until the topline RCC data, that wasn't a real possibility. But today...very real."

    Here's my opinion. These are sophisticated institutional investors who are risk averse. What you say is completely true, but you're expecting them to assume a simple long position in the stock without any downside protection. You are also assuming they would have an informed opinion as to the value of the company, ie probability of approval, market opportunity, etc. I'm thinking these guys know financial instruments, not biotech. I think they are focused on maximizing gains with minimal risk and missing an opportunity that is outside their area of expertise isn't much of a concern.

  • Reply to

    Shorts....

    by m_mccruden Aug 27, 2015 9:10 AM
    erniewerner erniewerner Aug 27, 2015 11:17 AM Flag

    "I wonder if they don't cover their shorted shares despite so many good news, they will have to deal with paying for the high interest once their margin call or covered dates are up?"

    They are not like you or I with a handful of positions that they watch on a daily basis. The long term short positions are part of a larger trading strategy that is hedged. A fund manager will be long several stocks that he thinks will outperform and short several that he does not think will do so well. So if EXEL goes up as long as Array or Gilead goes up as much or more, he does okay. Or he will own the underlying convertible bonds and be short the stock. Or he will write puts and be short the stock. So if there are daily losses on a short position in EXEL, presumably are offset somewhere else in the portfolio. The net short position in EXEL has not changed in 12 months. The effect on the share price over that time period is negligible. The market fluctuates, and some of the volatility may be due to shorting and short covering, but know that the stock will in the long run be valued based on market perception of its intrinsic value. Getting worked up about what's happening in someone else's portfolio is not going to change anything except for your mood.

  • Reply to

    Shorts....

    by m_mccruden Aug 27, 2015 9:10 AM
    erniewerner erniewerner Aug 27, 2015 10:21 AM Flag

    "Looks like the shorts are very stubborn. They just won't cover. It can't pass 6.20. I hate them. Don't know when this thing will be up to 7."

    Short interest has varied very little in the last 3 months and is right where it was a year ago. For the past 7 years, almost daily, someone on this board predicts a short squeeze tomorrow and it has never happened, the short interest has steadily climbed. I ignore it. The stock will reflect fundamentals and as market perception continually adjusts to the developing story here, the stock price will reflect it. If you want instant gratification, I have little sympathy for you.

  • Reply to

    Swiss approval

    by erniewerner Aug 27, 2015 7:17 AM
    erniewerner erniewerner Aug 27, 2015 8:21 AM Flag

    Interesting, no corresponding press release on the Roche or Genentech websites yet. That was pretty generous letting EXEL break the news. Let's hope they are equally generous when it is time to set the prices for Zelboraf/Cobi revenue split.

  • erniewerner by erniewerner Aug 27, 2015 7:17 AM Flag

    All by itself, a nice piece of news, but the commercial impact is minor. One has to suspect that the Roche is the hometown favorite and the Swiss regulatory body wanted to be fist to approve the combination. That said, it does do the following.

    It keeps EXEL in the news cycle and raises awareness that the EU and FDA approvals are pending.

    It is an indication that there are not any undisclosed problems with the filings. That is a comforting circumstance given the 3 month delay by the FDA.

  • Reply to

    Nivo continues to haunt Cabo

    by efrat99 Aug 26, 2015 10:34 AM
    erniewerner erniewerner Aug 26, 2015 5:32 PM Flag

    "What are the chances they would grant B/T to Cabo after the fact, if the data was inferior to Levantinib?
    That is your point I'm assuming and it is another good one."

    They would. The comparison is made to approved standard of care, not to all developmental drugs in the space. Lenvatinib still has to go through a phase 3 trial and things can still go wrong. The lenvatinib monotherapy results are roughly equivalent to Cabo, the lenvatinib/everolimus arm outperformed the Cabo expectation. If your looking for positives, Eisai still has to do the phase 3 trial and the Nivo and Cabo results now establish survival as the requisite endpoint for 2nd line RCC.

  • Reply to

    Nivo continues to haunt Cabo

    by efrat99 Aug 26, 2015 10:34 AM
    erniewerner erniewerner Aug 26, 2015 1:15 PM Flag

    Hey Duck, let me parse another nuance. These presentations are scheduled back to back and the ESMO folks have the abstracts. Out of politeness, if one data set is inferior to the other, I would schedule it first. Nivo is at 1610 and Cabo at 1620. Perhaps I am overthinking this, but maybe not.

  • Reply to

    Nivo continues to haunt Cabo

    by efrat99 Aug 26, 2015 10:34 AM
    erniewerner erniewerner Aug 26, 2015 12:50 PM Flag

    "6-7 months would not have met primary endpoint in PFS so unlikely to be in that range."

    It depends on how the control arm did. 7 vs 4 is plausible, Best for us if Ever does better than anticipated. The only way Cabo gets in the 9's is if Ever outperforms its historic results. In its registrational study PFS by central review was 4.9 months. Central review is key, observational studies tend to inflate the result.

    I've said it before, the presumption is that Nivo will outshine Cabo on survival by a considerable margin. That might not be the case. The Nivo trial is larger and the data set more mature, The Cabo OS HR of .67 may compare very nicely with the Nivo result.

    interesting is that breakthrough for Nivo in RCC has not been announced yet. BMS is not a stranger to the application process and it still may be coming, we'll see.

  • erniewerner erniewerner Aug 26, 2015 8:06 AM Flag

    The nest question is whether adding a MEK inhibitor to V will synergistically improve NSCLC treatment efficacy the same ay it does BRAF mutated melanoma.

  • erniewerner erniewerner Aug 26, 2015 8:04 AM Flag

    "You did see NSCLC, the largest cancer indication right? Ten or 20% of that market is significant."

    Best case scenario is 4%, Not sure if V is effective for non-V600 mutations, so 2% may be the actual market. For what that's worth look at Xalkori and figure an appropriate percentage.

    Clinical, pathologic, and biologic features associated with BRAF mutations in non-small cell lung cancer.

    "Of 883 tumors screened, 36 (4%) harbored BRAF mutations (V600E, 18; non-V600E, 18) and 257 were wild-type for BRAF, EGFR, KRAS, and ALK negative. Twenty-nine of 36 patients with BRAF mutations were smokers. There were no distinguishing clinical features between BRAF-mutant and wild-type patients. Patients with advanced NSCLC with BRAF mutations and wild-type tumors showed similar response rates and progression-free survival (PFS) to platinum-based combination chemotherapy and no difference in overall survival. Within the BRAF cohort, patients with V600E-mutated tumors had a shorter PFS to platinum-based chemotherapy compared with those with non-V600E mutations, although this did not reach statistical significance (4.1 vs. 8.9 months; P = 0.297). We identified five BRAF mutations not previously reported in NSCLC; two of five were associated with increased BRAF kinase activity."

  • Reply to

    XL 550 CS 3150

    by erniewerner Aug 25, 2015 5:30 PM
    erniewerner erniewerner Aug 26, 2015 6:16 AM Flag

    "That could be telling for the rational behind the Asian only population."

    Hypertension and diabetes are huge indications and patients have the potential to be on medication for decades. Regulators will insist on a well defined and acceptable side effect profile. This means very large and lengthy phase 3 trials. Sample sizes of 5 or 10,000 and 18 months duration are not uncommon. Once Sankyo has its ph 2 data they will have decisions to make. They can continue monotherapy development, explore various combinations with other drugs or shelve the program.

    The reason for the all Japanese study may just be simply that's where Sankyo's resources are located. They wanted to keep the proof of concept work close to home where they have the ability to better observe and ensure the quality of the data. If they take it to phase 3, they can expand the sample and stratify the data to detect differences attributable to genetic variance. U.S. companies do the same thing in reverse. Phase 2 work in the U.S. and worldwide registrational trials.

  • Reply to

    XL 550 CS 3150

    by erniewerner Aug 25, 2015 5:30 PM
    erniewerner erniewerner Aug 26, 2015 4:45 AM Flag

    "This quote is telling for Spironolactone and Eplerenone being niche drugs."

    There are generics available for both of these, so there isn't much pricing power left and another aldosterone inhibitor will have to be an improvement over both of these to be commercially successful. I think the rationale for 3150 is that it is a more specific drug and many of the problems with the competitors are due to non-specificity and blockage of non-target processes.

EXEL
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