My take on the AH action is not about Sovaldi - it's about Idelalisib (Zydelig). The box warning and the need for a REMS (for now), coupled with the fact that between this drug and Rituxan (approved taken together) it's $4000 more than Imbruvica, may really blunt sales of the drug in the short term. The company, however, is still way undervalued, regardless. They will hyit at least $8 EPS this year, and at 15X that's a $120 stock. That's a 33% upside at least!
I just read the transcript. Worse than I thought. The big design loss is unfortunate, and it appears it's with their 30% customer. Their low-end guidance is horrible - an average of 15.5 million per quarter in second half. (They have already produced $37 mill, and the range is now $68 mill-72 mill). EPS will be lucky to hit $2, with last year at $2.45. My new entry point: $20-$22.
Analysts aside, I lost faith at 5:10 a.m. west coast time and bailed pre-market at $35. The CEO is a masterful promoter. It's curious to me how little momentum the company has had in the past 6 months. I guess this is the downside of promoting every design win, and every product line extension. Now he says the market is soft, but I didn't see any appreciable softness in NTAP's first quarter earnings report - one of SILC's major customers. My take is that the business SILC is in is cutthroat with razor thin margins, but that SILC's innovation is what has propelled them forward. I suspect it isn't too difficult to reverse engineer bypass switches, adapters, etc., and that their innovation lead can be marginalized quickly. Nearly every quarter for the past two years, the CEO has announced a design win. We've hit a dry spell, and growth rates are down. Whether this is symptomatic of a far bigger problem has yet to be seen, but since I bought back in close to $50, I allowed this to bleed way too long. Good luck to those who hold. I won't be back in unless the momentum comes back. I've been in and out of this stock since it was $7 a share, but this last round took most of my profits from the past on this stock. Shame on me for a very bad trade!
The news broke Thursday. But let's do a reality check on the situation. The day before, Boehringer Ingelheim received Breakthrough designation for Nintedanib, ITMN's competitor. The only reason of course that both drugs are getting this designation is not because of efficacy, but because no drug exists on the US market today that specifically treats IPF. However, the publically available surveys of docs suggest that ITMN's drug perfenidone will be prescribed first in at least 75% of cases. Secondly, most IPF patients will probably cycle through both drugs, as their effectiveness tends to lessen over time. But, going back to the application process - ITMN is in a re-submission situation, with a six month review to begin with, which originally put their drug at a late November PDUFA. BI's drug is a first application, which will push then into next year. and with breakthrough, I've stated before that I think this will shave 2-3 months off the approval process for ITMN, putting a possible approval as early as late August or September. We'll see!
Sentiment: Strong Buy
I'm actually not negative on npsp - I'm looking for solid reasons to get back in, and if there's an article out there that details what this new division is able to do (i.e. make their own acquisitions), then I'm all eyes. Odds are close to 100% that I will be back in before Natpara's approvbal, which is imminent. Still not sure how this quarter will look given last qtr, that's all.
fatty, do you have a link to this? I've found the first part of the statement, but I can't find anywhere that says the new unit will have capital to pursue deals.
I think ITMN will be acquired after approval, but the curve ball that may happen now with breakthrough designation on a re-submission means this could get approval in late August or in September, and it will surprise the market quite a bit.
This is going down right now for two reasons: first is obviously the overall biotech and market selloffs due to Yellen, Israel, Russia. Malasian Airlines, etc. The second reason is that according to the NYTimes, the deal to buyout Shire will be announced in the morning - I suspect before market open , but definitely before market close. Tomorrow is the deadline placed on Shire and Abbvie to cut a deal or walk for six months. With this deal it is unlikely that NPSP will be bought out by the combined entity anytime soon. I'm now staying out until before the Natpara approval.
I just learned that Fed Reserve bnoard members are allowed to trade stocks while in their position. Yellen probably had a short on the biotech index yesterday, prior to this morning's comment!
Actually I like Cramer. He makes several wrong calls, but who doesn't? Overall he's smart, instinctive, and has an impressive base of knowledge across all sectors of the market. Take him for what he is: a highly opinionated guy whose opinions often are on the mark.
What place does the fed chairman have commenting on stock valuations? Those valuations are determined by market forces and have no business in her realm of commentary. Is she going to start commenting on each and every sector of the market? Oil stocks are really high this month? The utilities are now overpriced? Bonds are fundamentally undervalued? he fed is supposed to ensure a stable economy, and economists are supposed to "get" that the stock market goes through a series of healthy corrections all by itself - to cause an artificial one is out of bounds and someone in congress or the president ought to let her know.
If you want a quick trade, sell pcyc on August 5 in the morning, and then buy it back on Aug 6 at around 11-noon on the 6th after Idelalisib is approved.
I think Shire/Abbvie will be announced tomorrow or Wednesday at the latest - the deadline is the 18th. Shire is as good as gone; NPSP unfortunately will fall I think to $26. I posted that I got out of NPSP after the last quarter due to a slower than expected start on Gattex. They adjusted their annual sales downward from 110-120 to 100-110, and their Gattex revs only went up 2.5 mill from the previous quarter. I'm telling you this as a former long that had NPSP as my largest position (now its ITMN): I think NPSP is headed for $20 before Natpara gets approved. Then back up to $30+. Shower me with 10 thumbs down, but just know this: I never short. I'm just watching NPSP like a hawk right now.
If senators are going to get into the drug business then they had better educate themselves on the macro view of healthcare costs per disease. Traditional hep c treatments have a 50% cure rate at best, and up to 20% of chronic carriers develop cirrhosis. Liver transplants are $550,000 each. One liver transplant = 6-7 cured individuals. And if they believe in letting the market work this out, then they should do nothing. Once a couple more treatments are approved, there will be a price squeeze, but Gilead will still do fine.
"The company reports that the FDA has granted priority review to a New Drug Application (NDA) for idelalisib for the treatment of relapsed CLL. A target review date under the Prescription Drug User Fee Act (PDUFA) has been set for August 6, 2014. Previously, the FDA granted idelalisib a Breakthrough Therapy designation in relapsed CLL. The designation is given to drug candidates that may offer major advances in treatment over existing options.Separately, the FDA has accepted an NDA for idelalisib for the treatment of patients with iNHL. The FDA has granted a standard review for the iNHL NDA, with a target review date under PDUFA set for September 11, 2014."