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Sarepta Therapeutics, Inc. Message Board

faosto 277 posts  |  Last Activity: 12 hours ago Member since: Dec 10, 1997
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  • Reply to

    misunderstood deal

    by gen_halftrack May 20, 2015 10:30 AM
    faosto faosto May 20, 2015 4:30 PM Flag

    I think JNJ will test this year for safety issues involving several combinations, and assuming there are none, will do an adaptive phase 2/3 trial (to test different doses similar to what ACHN did on 3422) with the goal of getting breakthrough therapy designation by 2nd or 3rd quarter of 2016, and approval in 2017. ACHN is far from off the table as an acquisition, but in my mind only if (a) it's obvious that at least one asset is headed for approval (and I think it is likely that 3102 AT LEAST will be that asset) and (b) that the Complement D program starts to show some compelling data. If ACHN delivers a "holy cow" phase 1 on complement D, or at least an outstanding phase 2, then ACHN will very much be back on the table for some number of billions. It's the perfect purchase at that point: a blockbuster Complement D pipeline whose development is completely funded by the HCV franchise. I'm getting into binary's camp on this. I also would not at all be surprised if Desh maneuvered negotiations with possible suitors into this collaborative direction rather than an outright purchase, because he knows something about their Complement D program that will drive future value that as of now can't be realized in a sale purely based on HCV. Back in November 2014 he said this: "Our complement factor D inhibitors possess desirable attributes including pico-molar potency in vitro, low potential for off-target effects, and complete inhibition of complement in non-human primates after oral dosing. We anticipate that our platform could play a role in addressing the needs of all PNH patients, including those patients who fail to respond or respond sub-optimally to the currently available treatment, as well as patients suffering from other complement-mediated diseases."
    did you get that? "...complete inhibition of complement in non-human primates after oral dosing." Not only that, but ACHN's inhibitors preclinically have a much better safety and tox profile than does Soliris.

  • ...to be the ones who bought 3700 June calls with a $10 strike today. First their analyst downgrades, and then their brokers can move in.

  • Reply to

    Here's what I think is going on

    by faosto May 19, 2015 8:55 PM
    faosto faosto May 20, 2015 12:43 AM Flag

    nice try, Mac.

  • Reply to

    Here's what I think is going on

    by faosto May 19, 2015 8:55 PM
    faosto faosto May 20, 2015 12:23 AM Flag

    Bergy, you're trying to find which insect pooped on a riverbed pebble while the river is flooding! Magnam has been one of the most reliable critics (in the true definition of that word) of ACHN's drug candidates and prospects of anyone on this board. You continue to harp about what mg amounts were tested, and what the company said. Seriously? As if what Magnam's statement about milligrams (accurate or not) is relevant to the big picture? First, get a life. Second, notwithstanding the fact that Magnam was right, would you dare to focus on #$%$ matters? Yes, this drug regimen of 3422, olysio, 3102, or one of multiple other combinations will produce multi-billion dollar revenues. ACHN just locked in your demise on this trade. I'm so sorry!

  • Reply to

    Here's what I think is going on

    by faosto May 19, 2015 8:55 PM
    faosto faosto May 19, 2015 10:17 PM Flag

    totally agree magnam. What we don't know are the revenue levels that kick ACHN into the low 20% royalties, but I suspect they are in the 4-5 billion range, where in that case ACHN would be making 22% of 4-5 bill or $880 mill to $1.1 billion a year in HCV revenue! I'm being conservative when I say $350-$500 mill in annual revenues! At 8-10X buyout prices, that alone puts ACHN at as much as a $5 billion company, before Complement D or any cash in the bank!

  • Reply to

    Here's what I think is going on

    by faosto May 19, 2015 8:55 PM
    faosto faosto May 19, 2015 9:44 PM Flag

    As a point of comparison, you have ENTA at a $753 mill valuation with $165 mill in the bank, a protease inhibitor approved, another PI in phase 2, a POC going on for an NS5A (doesn't hold a candle to ACHN's 3102), and that's about it, other than some preclinical work in NASH. Enanta gets 12-20% royalties ON A PERCENTAGE OF VIEPAK REVENUES - RIGHT NOW IT'S 30% OF REVENUES, NEXT COMBO IS 45%. SO YOU'RE LOOKING AT A LOW OF 12% OF 30%, OR 3.6% OF VIEPAK DRUG REVENUES. That's a $100 mill on $3 billion. ENTA has a $588 market cap net of cash.
    ACHN has a market cap of $1.26 bill, $4450 mill in cash, or a market cap net of cash of $810. 4 major assets in development other than the Complement D. World class NS5a worth as much as its current market cap easily. ACHN gets 15-22% of ALL REVENUES GENERATED BY THE FINAL COMBO, REGARDLESS OF NUMBER OF ACHN ASSETS IN IT. SO ON 3 BILLION, ACHN ON THE LOW SIDE GETS $450 MILL (as opposed to ENTA's $100 mill). PER YEAR. ENTA didn't get a $1 billion in milestones - ACHN does. ENTA got a $57 mill signing bonus and $95 mill in milestone payments. ACHN got $225 million stock purchase and a billion in milestone payments. ENTA has a preclinical nash candidate. ACHN has a complement D small molecule platform. the deals aren't even close. ENTA is worth $800 mill; ACHN is worth 4-5X that, or $3.2-$4 billion.

  • So initially this went to $12 and change, and then dropped to $10, and then settled out at $10.68. Some shorts covered, some longs bailed after being disappointed that there wasn't a buyout, and some were doing a "buy the rumor, sell the news" roundtrip. I think the market took its cue from the $12.25 share purchase as the valuation, less the 15% dilution. Janssen bought 18 million shares at $12.25, which with the 15% dilution is $12.25 x 85% = $10.41, which is where the price lingered for quite a while AH. I think tomorrow, perhaps with some higher PTs from analysts, people will decouple what Janssen paid for their shares versus what the company is really worth now with $450 in the bank, no development costs on their HCV franchise, a billion dollars in payments over the next two years (from milestones, which will likely happen because out of 6 HCV assets at least two to three of them will get to market), a $350-$500 million/yr future revenue stream for 4-6 years, and a wholly owned Complement D franchise. $20? $30? $40? Plus, at any point Janssen could opt to buy Achillion, or anyone (like Alexion, as binary is suggesting) could opt to buy Achillion for their Complement D franchise and the future revenues from HCV. I'm holding my shares. And I believe next stop is $12.70.

  • faosto faosto May 19, 2015 8:08 PM Flag

    he didn't say anything.

  • faosto faosto May 19, 2015 5:46 PM Flag

    it was a 15% dilution for $225 million in cash and no further development costs

  • faosto faosto May 19, 2015 5:44 PM Flag

    the equity investment involves upfront cash of $225 million. They now have $450 million in the bank.

  • (paraphrased) CEO: we believe that timelines will be significantly improved through this collaboration, and we are striving for the triplet combination that we think will shorten the timeline. We can move immediately into a triple combination trial and see a six week duration regimen that will be competitive and in a good timeframe.

    They receive royalties as long as at least one ACHN asset is in the regimen. Jansen and ACHN will work together to find the best, most competitive, combination in the fastest timeframe.

  • faosto faosto May 19, 2015 4:37 PM Flag

    esattamente, greymatters!

  • Reply to

    smart deal for a phase 2 program

    by raya_q8 May 19, 2015 4:30 PM
    faosto faosto May 19, 2015 4:35 PM Flag

    They can put the complement D franchise on all cylinders. They no longer have to spend a dime on HCV and they now have $450 million in the bank! Current valuation at $10,68 is a paltry $800 mill! This is going over $20!

  • 15 million shares short. I think this opens at $15 and could run to $20 or more. Of course, I could be wrong, but there is not way to interpret this as anything less than a doubling of the market cap over the next 1-3 months.

  • Reply to

    I have seen this before when

    by daubjj May 19, 2015 4:29 PM
    faosto faosto May 19, 2015 4:31 PM Flag

    that's because MannKind has a #$%$ drug!

  • -15% increase in shares to receive $225 million in cash
    -up to $1.1 billion in milestone payments
    -mid teens to low 20's (call it 18%) rotyalties

    Calculation:
    Eventual $2.5 billion in revenues x 18% = $450 million annually
    complement D franchise valued at $500 mill discounted to present value $200 mill
    1 billion potential cash in bank

    650 mill revenue stream X 5X = 3.250 billion
    add 1 billion cash = 4.25 billion / 135 million shares = $31 a share today

  • Reply to

    Phase 2A topline data when expected?

    by magnam_pi May 12, 2015 11:37 AM
    faosto faosto May 13, 2015 7:12 PM Flag

    I used to focus on the chaperone drugs - FOLD comes to mind. I owned SNTA briefly but at the time there weren't any near term catalysts. Do you have a link to any recent data on Ganetespib that looks compelling?

  • Reply to

    Phase 2A topline data when expected?

    by magnam_pi May 12, 2015 11:37 AM
    faosto faosto May 13, 2015 1:23 PM Flag

    I'll take a look at September. That's a pretty pricey call though. I see some of the July calls at 50 and 55 are going through at $6 and $7. AAVL should go up 50% at least on positive results. So far in that department I'm basting zero for 2 this year, well 1/2 to 2. My NLNK just took a $15 hit yesterday (although it will come back), and I lost nearly $40K on CLDN. So AAVL had better come through! I have way too much money in RCPT and BLUE, but also KITE. I may distributer the $$$ between KITE and JUNO. I'm also buying options on LPTN - their ISONEP drug has a readout in June, and it stands a much better chance of success than their failed ARONESP.

  • Reply to

    Phase 2A topline data when expected?

    by magnam_pi May 12, 2015 11:37 AM
    faosto faosto May 12, 2015 9:32 PM Flag

    Magnam, I've understood the release to be June. I'm debating about buying calls versus holding the stock.

  • faosto faosto May 12, 2015 7:27 PM Flag

    Pdbmiami, I suspect that your sister did not have surgery on her cancer; 3-11 months is the norm for survival without resection. My mom died from it as well - 3 months from diagnosis. So did my wife's mom. Keep in mind that only 20% of pancreatic cancer is eligible for resection - still significant, but unfortunately the bulk of cases cannot be helped this way. It's the worst cancer out there in terms of speed. I am really hoping that we hit the .043 P value by 444!

SRPT
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