I certainly hope there's not a buyout, as this would greatly diminish the potential for long-term gains for those of us who currently own shares.
Prana management (and shareholders) would vastly prefer a partnership rather than a buyout, so if a buyout were to happen it would have to be a hostile takeover, which seems extremely unlikely.
Big Pharma has thus far shown no interest in partnering with Prana, which makes a buyout even less likely. Big Pharma is waiting to see what the results are from the two trials. If they like the results, they'll beat each other up trying to get a partnership with Prana. If they don't like the results, Prana will continue to self-finance.
When the share price suddenly goes up a dollar or two, people have a tendency to extrapolate to infinity. That's human nature. A $6.3 trillion market cap prediction for Prana is essentially infinity and is therefore not a reasonable projection in my opinion.
There's this thing called reality that tends to sooner or later demolish such projections.
I'll be perfectly happy if the results from the IMAGINE trial are sufficiently compelling to (a) entice Big Pharma to partner with Prana, (b) entice the FDA to fast-track PBT2, (c) shows continual improvement in executive function during the 12-month trial period and the 12-month unblinded extension, and (d) shows physiological improvement on the PET scans. If all four of these things happen, Prana will have broken new ground and we'll enjoy a much higher share price. This four-part scenario is pretty optimistic, but well within the realm of possibility.
But a market cap of $6.3 trillion? Extremely unlikely. With regard to the assertion that "numbers don't lie", that depends on the numbers. One can concoct any configuration of numbers one wants to concoct to "prove" any point one wishes to prove, no matter how unprovable or ridiculous.
According to a bit of googling, in 2010 (the last year in which Aricept had patent protection), worldwide sales were about $4 billion. I suspect that a large percentage of Alzheimer's patients started using Aricept after it was approved, despite the drug's relatively weak efficacy. Patients and caregivers wanted any kind of benefit they could get to lessen the impact of the disease. The development of competing first-generation AD drugs plus the loss of patent protection have cause Aricept sales to go down in recent years.
What will be the initial worldwide sales of PBT2 if it gets approved for AD? I don't know. But it will depend on a lot of things, such as:
What other 2nd-generation AD drugs, if any, will be on the market at that time?
How effective will PBT2 be compared with any other 2nd-gen drugs that might be on the market at that time?
What will be the side effects of other 2nd-gen drugs compared with those of PBT2?
How much more effective will PBT2 be than 1st-gen drugs?
How effectively will PBT2 be marketed?
Will PBT2 be marketed as a preventive measure to be taken by people with high risk of AD but no outward symptoms?
In any event, if PBT2 gets approved (a big "if"), I wouldn't be surprised to see initial sales in the ballpark of $10 billion per year or even higher. On the other hand, I'd be pretty surprised if sales reached $100 billion. It's not impossible, of course, but I try to avoid the temptation to become excessively optimistic about companies I own. Been there, done that.
I am, however, more optimistic than I was a month ago, for three reasons: (1) the fact that doctors were the ones who requested the 12-month extension study, presumably based on benefits they were seeing in some of their patients, (2) the Kelvin Lawler video, and (3) the most recent mouse study (yes, I know that mouse studies can be misleading).
I'm sorry to hear about your dad. As you've probably observed, the loss of executive function is particularly terrible. My dad had Lewy Body dementia, or at least that was the doctor's best guess. He died from an unrelated illness before the dementia got to the advanced stage, so I can only imagine what you're having to go through. I salute you for taking such good care of your dad. I suspect that good things will happen to you as a result (such as, perhaps, a big rise in the price of your Prana shares next year).
While its obvious that this guy is a desperate short, he does bring up an interesting topic: panic.
While panic-selling is a well-known phenomenon, an equally interesting but less-discussed phenomenon is panic-buying. If major good news comes out (something bigger than the tidbits we've been getting from time to time in the recent past), a lot of people will panic-buy to try to get in before the price goes higher. This panic-buying then drives the price up even more, which can lead to more people panic-buying, etc. It can snowball on itself for a while. One of the most satisfying experiences in life is to have bought a stock at a low price, then sat on it for a while through random ups and downs, then watch as it suddenly catches fire and a period of self-reinforcing panic-buying sets in and drives the price up a lot in a relatively short period of time.
RT: While I completely agree with your views on Tesla automobiles, the guy who started this thread was talking about Nikola Tesla, the Yugoslavian-born inventor who was the father of our modern electrical infrastructure.
I wouldn't even be asking such a question if I were in your situation. First, there is no way to know whether it will go down another dollar from the current share price. Second, if you believe there's a decent chance that one or both trial results will be really impressive, you shouldn't care about whether you buy the stock at $4 or $5. You should just make sure that you own enough shares to benefit substantially in the event that the price goes to $20 or $30 or whatever next spring. But you shouldn't own so many shares that you'll be wiped out if the price goes to $1.
While the copper-cholesterol interaction described here doesn't exactly match Prana's model of Alzheimer's, it serves as yet another data point indicating the important role played by metals homeostasis. It also leads me to once again wonder whether metals homeostasis may be important in other parts of the body. If so, this brings up the question of whether Prana's MPAC drugs may turn out to have benefits outside of neurodegenerative diseases. And there's also the question of whether MPAC drugs might cause unwanted side-effects by disrupting metals homeostasis in other bodily systems. What works in the brain might cause trouble elsewhere. The good news is that thus far we are unaware of any negative side-effects from PBT2. On the other hand, what if PBT2 turned out to have protective or therapeutic qualities in the pancreas, or the liver, or muscle tissue, or whatever? I have no idea whether any of this might be the case, but it's certainly worth discussing. Insights, anyone?
P.S. -- I was tested for Wilson's Disease, which is the inability of the liver to get rid of copper at a fast enough rate. Copper can build up in the liver, leading eventually to damage and even liver failure. Fortunately, I tested negative. There are already copper-chelating drugs that are used to treat Wilson's. But might there be subtler metals issues in other organs, for which a mild chaperone such as PBT2 might be more beneficial than a strong chelator? I have no idea.
Yes, the possibility exists that without recent news (such as the latest mouse study and the TV segment from Australia), the price could be $3. But, alas, this news arrived and the price currently stands at about $5. Welcome to reality, where good news causes the share price to go up. Oh, by the way, bad news can cause the share price to go down (as happened when the company announced the delay of the HD results). If you're upset about the fact that news affects share price, I suggest you stay away from all stocks.
Incidentally, the possibility also exists that the two trial results, which will probably be released within a few weeks of each other, could send the stock to $30 by the springtime of 2014. The current upside potential for Prana is, in my view, much greater than it would be if Prana were a Big Pharma company or a closely-followed small-pharma company. This is because Prana is currently a barely-followed small-pharma company. Impressive trial results could have a two-fold effect. People who have followed Prana but stayed on the sidelines might be tempted to jump in and buy. And Prana would instantly gain major news coverage, which could cause a lot of people who have never heard of the company to jump in and buy. And, unlike all Big Pharma companies and many small biotech's, Prana's science is not scattered in various directions. It's focused on one thing: using MPACs to treat neurodegenerative diseases. Geron, a small-cap biotech I used to own, was typically going in three directions with its research at any given time, and periodically dropped one of its directions and picked up a new one. So, altogether, Geron has tried its hand at a whole bunch of unrelated avenues of research. Prana, by contrast, remains highly focused and specialized.
I have elderly relatives with Type 2 diabetes who have no symptoms of dementia and I also have elderly relatives with dementia who do not have Type 2 diabetes. My uncle died of Alzheimer's about ten years ago, but his blood glucose levels remained normal. If AD were late-stage diabetes, his blood glucose would have been abnormal for years. Ditto for my aunt, who currently has clear symptoms of dementia but has normal blood glucose. On the other hand, one of her daughters has Type 2 diabetes despite being slender, eating well, and exercising.
However, lack of direct causality would not rule out some sort of correlation between AD and Type 2 diabetes. There may be a factor or set of factors that can lead to both diseases but that may in some cases lead to one without leading to the other.
The presentation contains a fascinating series of charts on executive function vs. memory in Alzheimer's, showing that:
1 - Decline of executive function begins much earlier than decline of memory.
2 - PBT2 has already been clinically proven to increase certain forms of executive function in AD patients.
3 - In late-stage Alzheimer's, executive function plummets much more rapidly than does memory, and this loss of executive function is what causes patients to be unable to live at home.
4 - PBT2 is designed to improve both memory and executive function.
5 - The early stage decline of executive function manifests is self in various subtle ways.
I can personally attest to points 1, 3, and 5. A deceased relative of mine was diagnosed with Lewy Body Dementia toward the end of his life. I noticed subtle but disturbing changes in his personality and behavior more than two decades before he died, at a time when his memory remained excellent. Fifteen years before his death, these changes had become much less subtle and were starting to significantly affect his relationships with friends and family members. Yet his memory remained remarkably good. He lived at home until his death at age 94, thanks to family members who were willing to take care of him, but his loss of executive function was a much bigger difficulty for caregivers during the final stage of his life than was the loss of memory.
Thanks for the heads-up. Much to my pleasant surprise, the presentation prepared for the annual meeting contains numerous interesting tidbits of new information, along with amplification and clarification of information that we previously had. I'm about halfway through it and am impressed. I had been predicting that the annual meeting wouldn't really tell us anything new or useful. I was wrong. Which again confirms my hypothesis that the future is unpredictable. :-)
That's been my experience in the 7.5 years I've owned Prana. They might provide a more specific timeframe for the release of the HD results or a few other bits of info, but probably nothing about efficacy (since Prana doesn't know the results of either trial yet). Bear in mind that scheduled events are rarely a source of major news. Major news, when it happens, usually comes out of the blue. Like, for example, the announcement of the HD data delay or the Aussie TV story about Mr. Lawler.
The price today is about 30% down from its 52-week high, which occurred in August. So what new information has surfaced since the peak? Here's a summary of the main points:
1 - We learned that the HD results will be delayed a few months due to some apparent data-entry discrepancies that need to be reconciled.
2 - Additional pre-clinical studies have been published by scientists around the world supporting Prana's MPAC hypothesis.
3 - We saw strong anecdotal evidence via Aussie TV indicating that a patient involved in the AD study and extension has dramatically improved.
It's worth noting that point #1 tells us nothing whatsoever about the efficacy of PBT2 in the HD trial. Merely that the release of results will be delayed. Thus, from a long-term perspective this is neither good news nor bad news. It's totally neutral news.
Points #2 and #3 are good news in the sense that they add further evidence in favor of Prana's science.
Thus, in summary, I argue that the total body of information about Prana's science is more favorable now than it was at the time the share price peaked in August. Yet the share price is 30% lower.
I'm not complaining about the share price, because I don't care what the share price is. I'm merely pointing out a fundamental truth that applies to both speculation and investing: Share price doesn't always correlate with reality. The best opportunities to make money occur when share price and reality diverge by a substantial margin. While the value of Prana remains unknown, the recent trend of the share price has been in the opposite direction of the recent informational trend regarding Prana.
People make money by purchasing a stock when its price appears low compared with reality, and selling when the share price appears high compared with reality. Were it not for such discrepancies, it would be impossible to "beat the market".
I agree that there's a herd mentality in Big Pharma, just as there is in most other large established entities. But I don't think it's due to greed as much as it's due to the "not invented here" syndrome combined with the natural human attraction for groupthink. People often feel most comfortable belonging to a herd. Scientists are not immune from this tendency.
As resident curmudgeon, I'm going to refrain from recommending the Motley Fool article. First, like most Motley Fool articles, it contains no real information. It's a rehash of basic stuff we've known for months. Second, I have no interest in trying to persuade members of the public to buy Prana stock. If the trial results turn out to be on par with the apparent improvements shown by Kelvin Lawler, Prana stock will sell itself. Trying to "talk up" the share price in the meantime while we await results is pointless. Third, if the Fool article ends up increasing the share price a few percent, how does that help anyone here? Are ya'll going to sell your shares if it goes up 10% this week? I'm not going to sell mine.
Back when the share price was in the $2 ballpark and Prana was desperate for money, I criticized the CEO for not working hard enough to talk the price up in order to better enable the company to raise cash. But the company now has all the cash it needs to get through the trials.
The Kelvin Lawler video, by contrast, was a real piece of news, as in new information. That was worth getting excited about because it told us something we didn't know before. Even more exciting was the fact that it stayed below the radar for the better part of a day, giving us a form of inside information that was perfectly legal to use as we saw fit.
I'd recommend not shorting Prana at all. Unless you have access to a big piece of negative information that that isn't public yet. Right now, the only real glimpse we have of the IMAGINE trial is last week's Kelvin Lawler video, which, while purely anecdotal, would make me very nervous about shorting Prana.
Thus far, I haven't seen a single short post a rational argument for shorting. All the arguments I've seen are either totally ridiculous or are based purely on technical analysis. I haven't seen any shorts present scientific evidence or even anecdotal evidence against PBT2.
You contradict yourself. You claim that it's "dead money", then you claim that the price will go down in the near future. So which is it? If you're so confident that the price will go down, then you should actively be shorting Prana (which, I suspect, you already are). If you sell (or short-sell) shares now, then sit on the sidelines until after the results are announced, and if the results turn out to be really good, you will have lost your chance to make big gains.
Given my normal skepticism about any timeframe announced by Prana, I interpret "early 2014" to mean sometime during the first quarter of 2014. So I'll be happy if they announce the HD results by the end of March. If they announce the HD results before then, I'll regard it as a pleasant surprise. Bear in mind the possibility of additional delays that push the results into the second quarter. I'm not predicting that this will happen. I'm just pointing out that anything can happen.