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Genomic Health Inc. Message Board

flatlander_60048 56 posts  |  Last Activity: Apr 24, 2015 3:52 PM Member since: Jul 8, 2000
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  • flatlander_60048 by flatlander_60048 Apr 24, 2015 3:52 PM Flag

    I live in Illinois and the past couple weeks have been a all out media blitz to try to cajole state legislature to back the low carbon energy initiative. I'd say the commercials are running about 8 for to 1 against. The commercials are based almpsed exclusively on the negative economic impacts to the state if EXC closes some of the Nuc plants. Unfortunately, I think they are missing an important consideration - the nucs ran at 95% capacity during each of the polar vortexes last year where coal and nat gas experienced issues (freight train delays, nat gas demand related shortages etc.).

    The oposition paints it as a State bailout for EXC, however they miss the point that much of the problem is the State and Fedsubsidy supported wind energy results in times when electricity generated by EXC has 0 value. In a sence, the subsidies are only correcting the previous meddling by the government.

    FL

  • flatlander_60048 by flatlander_60048 Apr 24, 2015 12:20 PM Flag

    Needs to break strongly above $6.10. Maybe the recent strengthening of the Real and Petrobras coming clean will help.

    FL

  • flatlander_60048 by flatlander_60048 Apr 23, 2015 12:31 PM Flag

    Unfortunately, with an ever increasing proportion of its business being derived from Western Europe GHDX will be vulnerable to the currency headwind that is hitting the large multinational companies. The reimbursement code for prostate has the potential to provide alot of relief in the near term, so I don't think GHDX will get slammed too hard if there is a currency related miss.

    FL

  • Reply to

    Help with research

    by teetertotter44 Apr 17, 2015 8:36 PM
    flatlander_60048 flatlander_60048 Apr 21, 2015 2:57 PM Flag

    Hard to use traditional valuation models since there are so many moving parts. Right now GHDX has to fight for a much of their reimbursements which means a certain percentage of their sales are either non-recoverable or they receive payment for a fraction of what they are seeking. The COGS is still fixed so the profitability is getting trashed in the short term. This can change quickly with the reimbursement codes.

    Roche acquired FMI shares at a 109% premium to the pre-announcement price. GHDX is probably less likely to be pursued by a big pharma company (maybe LH or DGX). Since there are few barriers to stop competitors from developing similar tests, I think the premium would be substantially less. Generally companies like LH like to acquire the technology and conduct the tests at many of their labs. The GHDX model is to maintain propriety by testing all samples at a single facility. Thus, it would not be easy to cut the costs through synergies.

    I think there would be major resistance to anything less than the typical 30% premium commonly seen for biotech and innovative health care companies. It is all hypothetical. Some demonstrated sucess in liquid biopsy or prostate reimbursement could change the valuation dynamics quickly.

    FL

  • Reply to

    Help with research

    by teetertotter44 Apr 17, 2015 8:36 PM
    flatlander_60048 flatlander_60048 Apr 20, 2015 5:16 PM Flag

    There would undoubtedly be minority shareholder lawsuits if the terms of the go private were not beneficial to the minority share holder. The potential for litigation would make far less likely.

    FL

  • Reply to

    Help with research

    by teetertotter44 Apr 17, 2015 8:36 PM
    flatlander_60048 flatlander_60048 Apr 20, 2015 9:56 AM Flag

    I've had concerns about the going private issue in the past. It is always an issue when more than 50% of the shares are consolidated in just a couple hands. However, I think the relatively stagnant share price is more a function of inefficiencies. Without the Medicare/Medicaid reimbursement codes payments from insurance companies, Medicare, even individual patients are resolved on an individual basis usually requiring too much time and effort. Western Europe is actually growing quicker because they have a more streamline reimbursement model. The US is a couple years behind Europe on many of these issues (biogenerics legislations, reimbursement of genomic testing, etc.).

    FL

  • Reply to

    Flatlander - give credit where credit's due

    by arikaycerocks Apr 14, 2015 11:11 AM
    flatlander_60048 flatlander_60048 Apr 16, 2015 2:02 PM Flag

    Just stating that your projection is much higher than the Company's own guidance. I think the $1B by 2020 that GHDX offers as guidance is based on prostate projection based on the growth trends observed in Onco DX Breast. Prostate might well be greater since there is actually a greater need since a high % of the disease cases are indolent and are unlikely to kill the patient. Furthermore, GHDX may be lowballing in UPOD mode. Mid 20% growth vs 50% growth is a stretch. If things go right (competitor tests such as prolaris are proved inferior, etc.) , $2B is possible Especially if they expand to diseas management, reoccurence, monitoring etc.

    With regard to liquid biopsy (LB), it appears to be the Holy Grail. There are a lot of firms working on this. Some of which may be better funded or have top notch partners (FMI). I think GHDX should definately pursue LB but it is presently hard to prescribe a $ to this effort.

    I'm listening to the MNTA call (one of my other holdings that just got approval for generic copaxone). My theme of investing in companies that save health care costs (like GHDX) keeps playing out positively (also hold NVS partially for the Sandox biogenerics business). This theme sould have a 10 yr or more tail since the need for cost controls will only become more apparent as the baby boom generation all over the word retires.

    Good Luck FL

  • flatlander_60048 by flatlander_60048 Apr 16, 2015 12:54 PM Flag

    MNTA Sandoz sole approval

  • Reply to

    Welcome CSI

    by flatlander_60048 Apr 10, 2015 3:04 PM
    flatlander_60048 flatlander_60048 Apr 14, 2015 3:46 PM Flag

    One of those Whale sites has the BB institutional holdings in GHDX as $422,390,000 and 13,656,319 shares. When I divide it out I come up with just under $31. Either way the market cap is relatively low (less than $1B) and the potential market for actionable information in prostate alone is more than $5B (I beleive this is the figure I recall from the MYGN Website) just on the cost savings from unneccesary treatment. So I think there is plenty of reward for those buying at today's prices.

    Look at how EXACT sciences responded to the approval of reimbursement codes. I have as full of a position as I'm comfortable with, but If I desired more, I would not hesitate to add them at these prices.

    FL

  • Reply to

    Flatlander - give credit where credit's due

    by arikaycerocks Apr 14, 2015 11:11 AM
    flatlander_60048 flatlander_60048 Apr 14, 2015 3:31 PM Flag

    If you compare GHDX to the QQQ over the Yahoo max time frame (about 10 yrs for GHDX) you get about 170% increase for both. So it has been an OK investment to date. I'm investing because I beleive prostate and changes in the way health care are managed in the US and Europe will be game changers. Obamacare mandates that hospitals get compensated for outcomes rather than per test or treatment has created the incentive to make more informed decisions using whatever tools are avaiolable. I beleive that Europe is a couple years ahead of the US on squeezing the costs out of the system (Based on NICE, and biogeneric legislation adoption). This explains why GHDX is finding it easier to grow in western Europe. Getting on the phone and haggling for individual patient reimbursements is not a profitable model. I'm pretty certain that is changing (based on review of info on the Palmetto site) and based on the recent summit at the white house. My other reason for investing is that my father died of prostate cancer in 1995. Methods to predict the agressiveness of this disease in individual patients is one of the greatest unmet needs in oncology. I'm rooting that the test is very helpful in manageing the decision process since I may need it at some point in my life.

    With regards to the BB holdings, I just devided the total $ invested by the shares held to arive at the average. I don't think it should be too biased since I don't think the institutional accounts receive options etc.

    CSI through out a sales figure of $2B in 5 years. This is about twice the guidance offered by the company. I definately don't think it is impossible, but I beleive this is a profitable investment even based on the $1B guidance offered by GHDX. This would entail mid 20% growth at a time when there is not much growth to be found at a reasonable price.

    FL

  • Reply to

    if usd/brl goes back to 2.5

    by chips_dont_lie Apr 3, 2015 3:44 PM
    flatlander_60048 flatlander_60048 Apr 14, 2015 12:02 AM Flag

    I looked for the ML downgrade and did not see it. TD Ameritrade is not pulling up links to analyst downgrade. I think their network is being worked on tonight. Found the attached upgrade though. Scotia is not exactly a big name. There are a lot of calls being made based on Macro situation and the anticipated currency direction. Commodity consuming economies like India get upgraded and exporters get downgraded.

    Saw a video from another large protest demanding impeachment of Dilma. Political situation may have played into the downgrade.

    I'm of the mind that SBS is a long term hold, but I don't think this will be a great year for SBS (i.e. probably won't bounce back to predrought usage volumes). While the critical reservoir is about 2.5 times greater capacity than last year, it is still not at a point where usage should return to predrought normal levels. It is likely that the economic incentives for reduced usage will continue through this year's dry season. SBS is spending money on capital improvements that should improve the system functionality, but will eat into profits. I expect that tariffs to compensate for these improvements will likely continue. The reality that water and sanitary services are a necessity and may cost more will sink in.

    SBS has been beaten down, if the currency situation stabilizes a decent recovery of the share price should ensue. If not, SBS might bump along this bottom for awhile.
    Good Luck

    9:39 EDT SBS SABESP upgraded to Outperform from Sector Perform at Scotia Capital

  • Reply to

    Welcome CSI

    by flatlander_60048 Apr 10, 2015 3:04 PM
    flatlander_60048 flatlander_60048 Apr 12, 2015 6:29 PM Flag

    I recall the Baker Bros adding shares into the Mid 30's and when I calculate their ave pps I come up with $31.98, so it really has not run up like alot of biotechs. I don't think most investors realize the critical need for actionable test data in treating prostate cancer. I first bought in when the Cleveland Clinic Urology paper came out. The process plays out slowly as study data is collected and papers confirming the results are presented. However, prostate looks to be following if not slightly ahead of the Onco DX Breast. The critical inflection points are the reimbursement codes. I'm optomistic since they just built a Onco Dx Prostate sales force a little over a year ago and have 1400 Docs using the test with more than 50% (need to go back to the cc for the exact #s) reordering. I recall a 160% increase in the volume of tests ordered.

    Seems like Europe is more in tune with the the GHDX marketing pitch to reduce overall treatment costs by eliminating patients that will not benefit. I think there is presently a fair amount of resistence to this in the US. Hospitals are supposed to be graded on outcomes not proceedures. This should help. Obama had a roundtable meeting at the White House touting the need for this type of testing to improve treatment cost effectiveness. However, like alot of things it is mostlysound bites but they did not ramp staffing to get the tests reviewed and approved.

    Not sure if you are aware that GHDX owns 10% of NVTA which went public about two months ago. I don't think this is reflected in the share price.

    Got to Go .

    Good Luck
    FL

  • Reply to

    Welcome CSI

    by flatlander_60048 Apr 10, 2015 3:04 PM
    flatlander_60048 flatlander_60048 Apr 10, 2015 5:34 PM Flag

    Don't sweat the ISRG comment. We are a long way from that occuring yet. First step is securing the reimbursement codes. Then look for traction with the payers. GHDX projects that sales will quadruple by 2020. The market potential is definately there. The NICE approval of the Onco DX Breast test shows that even very cost concious governments will embrace the technique since it provides cost savings to the system. The prostate test has the potential to bring even greater cost savings, since the disease is way overtreated. I beleive that cost savings is big driver. Europe seems to be ahead of the US in realizing the need to come to grips with cost. The US is moving that direction. The retirement of the baby boomers will drive this change.

    Enjoy Cabo. Partying with Sammy, huh. How did it bounce back from the Huricane?

    FL

  • flatlander_60048 by flatlander_60048 Apr 10, 2015 3:04 PM Flag

    Things are pretty slow on this board. You will quickly figure out the posters that provide meaningful content and those that should be ignored.

    GHDX is under the radar of most institutional and individual investors. They are generally busy chasing the latest craze HEP C or Car T immuno-theropy. However, there is definately a place for companies that foster better decision making. Look at what Roche's recent offer did for FMI. There are quite a few upstart genetic testing firms, however GHDX is differentiated by the fact that their tests are targeted to provide actionable information (which treatments if any are called for). it appears that this is fast becoming the litmus test needed to secure Medicaid-Medicare reimbursement codes (based on my review of Palmetto website coding reviews/approvals).

    You mention Intuitive Surgical. I beleive that they could be adversely affected if genetic testing such as GHDX's Onco DX prostate test become widespread. A sizeable part of their De Vinci market is directed at prostate cancer surgery. More widespread use of watchful waiting represents a huge potential impediment to the sale of new units to hospitals. Like any expensive piece of equipment, the secret is sufficient patient volume to recoup costs. Any reduction in prostate surgery is a threat to the bottom line. I'd consider ISGR a short if GHDX receives reimbursement code approval.

    Good Luck

    FL

  • Reply to

    if usd/brl goes back to 2.5

    by chips_dont_lie Apr 3, 2015 3:44 PM
    flatlander_60048 flatlander_60048 Apr 10, 2015 10:37 AM Flag

    Dollar up this morning SBS is down. Can't sweat the short term currency moves.
    The Forbes story that Shell paid the massive premium for BG Group primarily because they wanted a bigger stake in the Brazilian fields. These fields are offshore from Sao Paulo and are thought to represent one of the final major untapped reservoirs outside of the artic.

    Long term this commodity cycle will play out and the Real will strengthen as it does. Kind of like Houston during the down cycle periods. Although Sao Paulo is arguably more diversified. I still see Brazil as attractive since they are not sitting on a demographic time bomb. Unfortunately the US has over 17 trillion in debt at the same time that the baby boomers begin retiring. If interest rates shoot up the interest on this debt will drag down the economies of the developed world. The Fed's balance sheet is now levered to the point that Lehman was at immediately prior to the 2008 crash. The US demographic crunch will likely be delayed by some baby boomers working well into their 70's. However, at some point in the next 10 or so years father time will catch up and they will leave the work force.

    Better stop now before I get myself depressed for the weekend.

    FL

  • flatlander_60048 flatlander_60048 Apr 3, 2015 8:57 PM Flag

    As I wrote once before, GHDX is the BB largest holding based on the percentage of voting shares they control. It is as strong a vote of confidence they can make without taking the firm private or making GHDX a subsidiary.

    FL

  • Reply to

    Invest in corrupt Brazil

    by timetoreviewthisone Mar 27, 2015 10:21 PM
    flatlander_60048 flatlander_60048 Mar 28, 2015 1:41 PM Flag

    Thanks for the thoughts. However, it is apparent that India is only the beneficiary of a macro theme whereby emerging markets that import their raw resources are benefiting from the decrease in the cost of production. Brazil on the other hand is a major exporter of steel, oil and Agriculture goods. The downturn in the commodity market is hitting them especially hard. If you invest in India, beware that there are almost no intellectual property rights that are protected by their courts. Look at the patent lawsuits NVS has had over Glivec, (a patent upheld by more than 100 countries including China). These things are cyclic and all things considered, I'd rather have an economy with a wealth of raw materials. It can always be diversified away from dependence on exporting, whereas India will always be at the mercy of exporting nations.

    Finally, where do you find a country where corruption is not occurring. As the birthplace of Enron, Wordcom, Washington Mutual ..., the US can hardly throw stones. We have corporate Boards that bless obscene CEO, CFO pay for total mediocrity. I was somewhat impressed that the recent SBS court settlements with the State of Sao Paulo over the worker pensions showed what appeared to be a reasonable degree of objectivity (am I interpreting it wrong?).

    Brazil is currently the victim of a currency cycle, these things have a way of being self correcting. The US dollar strengthening will result in increased costs for exporters which in turn results in decreased earnings which reduces the GDP of the US. Eventually the $US will correct lower.

    I'm buying SBS because i believe it provides a necessary service, in a growing demand area and I beleive it will rebound as the currency rebounds. This might be a couple years off. It will probably have a capped upside because the state will probably not approve large fee increases (like most utilities). However, it can still recover several hundred percent and increase its dividend.

  • Reply to

    Dividend?

    by flatlander_60048 Mar 18, 2015 12:31 PM
    flatlander_60048 flatlander_60048 Mar 27, 2015 1:27 PM Flag

    Unfortunately I have a tendency to be early in my investments. Given the strong dollar buying emerging markets on the cheap makes imminent sense to me. I think this in time will look alot like the 1998 Real devaluation. Which should allow SBS to rebound several hundred percent in a couple years. In the short term it may revisit the sub $5 area. I'll probably add a bit more, but I'm getting a full position now.

    Given everything thrown at SBS (Drought, Real devaluation, large scale construction effort to minimize water leakage and access the dead water in the reservoirs, etc,) it is still profitable. It is easy to paint a scenario whereby some of these costs subside, Meanwhile, the demand should grow at the rate population expands if not greater.

    Good Luck
    FL

  • Reply to

    Dividend?

    by flatlander_60048 Mar 18, 2015 12:31 PM
    flatlander_60048 flatlander_60048 Mar 27, 2015 9:06 AM Flag

    Looks like $R 0.37. Yahoo seems to have the dividend yield miscalculated since they are missing the currency translation. Looks like it is around 2.25%.

    FL

  • Reply to

    Brazil President Impeachment?

    by asizzle10 Mar 25, 2015 2:31 PM
    flatlander_60048 flatlander_60048 Mar 26, 2015 10:19 AM Flag

    The economic analysts appear nearly unanimous in the opinion that Rouseff will not be impeached. The demonstrations a little over a week ago appear short lived. A lot of the damage inflicted by Rouseff during her 1st term appears as if it is being undone by Economic Minister Levy. Due to the high inflation rate and freefall of the Real their appears to be a mandate to shift from some of the socialist policies of Rouseff. The Brazilian situation appears similar to the US in the late 1970's (Stagflation- little growth but high inflation). They are targeting +1.5% GDP by the end of the year and are implementing some cost controls on Gov spending. The playbook for this situation has been tested in the past by Paul Volker. That is why I think that Brazil could be better off in the long run than some of the Developed economies with massive Debt, Deficits and a demographic older population that will soon demand increased benefits. The playbook for exiting quantitative easing and avoiding deflation are much more controversial.

    I think you are right that impeachment would be a big plus to the economy, Most of SBS's share price problems can be directly attributed to the currency freefall and not necessarily the drought. These are largely the result of policies undertaken during Dilma's last term. However, I don't think impeachment is in the cards, unless there is a smoking gun on the Petrobras scandal.

    SBS similarly slumped in 1998 when the currency similarly devalued. The stock went up 500% in the 10 years that followed. I'm hopeful that this could be a similar moment.

    FL

GHDX
30.59-0.29(-0.94%)Apr 24 4:00 PMEDT