Just reading through my post and I referred to CYT-387 as CYT-307 and CYT-397. For the sake of clarity, it's definitely CYT-387. It's now being developed by Gilead under the name momelotinib.
The drug candidate here that is most exciting is pacritinib. You probably recall that YM Bio was working on a JAK 1/2 inhibitor (CYT-397). The idea was that it would cause less anemia, but also would have less of a spleen response since its was supposedly preferential for JAK 1 or JAK 2. However, CYT-307 had no benefit for patients with thrombocytopenia. This is pacritinib's niche. The candidate is out of SBio and was picked up for very little money (just as happened when YM bought CYT-387 from Cytopia in Australia). The selling point of pacritinib is that it's a selective JAK 2 inhibitor while avoiding blockade at JAK1. The benefit of this is that patients with thrombocytopenia as part of their disease process can use this candidate. Also, JAKAFI makes thrombocytopenia worse so there will be some JAKAFI patients switched to pacritinib to allow them to continue treatment. What's interesting in that CTI believes that the spleen response with pacritinib is in line with what is seek with JAKAFI. If true, this is amazing. The spleen response apparently improves over time. In addition, there was something unexpected seen in the latest trial which was improvement in anemia. This is surprising since a selective JAK 2 technically shouldn't help anemia. I'll hold off from saying more until I see the actual data (hopefully some will come out in June at ASCO).
In terms of buyout, they're already partnered with Baxter so the only logical partner would be Baxter. I'm usually not bullish on buyout prospects when rights have already been out-licensed. Having said this, CTI has a pipeline and there is an M&A frenzy taking place as you know. If Baxter wants direct control of the asset then anything is possible. Like with CYT-387, there should be lots of additional indications for pacritinib. I think opportunistic investors will show up here soon. All just my opinion so please let me know your thoughts as well. All the best.
I think Davis is a very important figure as long as Baker Bros is in the picture. You have to know the history, but Davis has been involved in a lot of Baker deals as CEO, Director and other. He's a key figure and they seem to trust him. He is one reason that I still believe that M&A will happen.
This wasn't a good Seeking Alpha piece. The reasons for my opinions are as follows:
1. The timelines don't match what has been publicly disclosed.
2. There are hints that a cash raise is near term, but there is no evidence to support this.
3. He cites the ROTH target price of $4.5, but doesn't present the Piper Jaffray estimate of $8 which is definitely as justifiable.
To support the above:
1. Where did data come from saying for Persist 2 that "Enrollment completion is expected early Q3'15, with results to come during Q1'16"? I never say anything from CTI to support this.
What the company stated in their Q4 2014 release was that "CTI BioPharma plans to possibly commence a regulatory submission to the U.S. Food and Drug Administration (FDA) and/or European Medicines Agency (EMA) as early as late in 2015.".
The company cannot file the NDA before having the Persist-2 data so clearly the readout is coming well before the end of 2015. At this moment, on clinicatrials .gov, the Persist-2 final collection of data for the primary outcome measures is scheduled to occur in April. We will know more once it's fully enrolled but enrollment does not appear to be an issue. I'm assuming roughly 3 months from April for the data readout so my schedule brings me to about July 2015. That sets things up for an NDA filing by year end.
2. The seeking alpha author also assumes that a near term cash raise is definite because he states that "The company's financial situation will likely hinder the stock for the next year or so.". They ended the year with roughly $70 million. They will need cash at some point, but it's not clear that they need to raise cash on sub-optimal terms. With positive Persist-2 data they can raise on much better terms if they choose to do so. Also, there may be other options/alternatives that we're not considering at this time. Baxter has been known to buy companies. CTIC could be acquired.
3. Piper Jaffray gave an $8 target.
I couldn't agree with you more about Adam F. as he's not a prime time analyst in any capacity. Bashing seems to be part of his business model. Anyway, it doesn't matter because we have some really good analysts following CTIC. I'm not pointing our Piper Jaffray because of their high price target ($8.00), but Charles Duncan has been consistently good in the Q&A's of multiple companies that he follows.
I suppose the other possibility for Adam F. is just sour grapes. I'm pretty sure that CTIC busted the so-called Feuerstein-Ratain Rule that says a company can't have a positive Phase 3 result if the company has a market cap under $300 million. I don't know where the market cap was when the Phase 3 Persist-1 data was released but it was close.
Also, Adam F. might not have a good grasp on myelofibrosis or its treatment. He definitely wasn't a supporter of YM Bio which was sold to Gilead for $500 million based around Phase 2 results for their JAK1/2 inhibitor. At this moment, pacritinib is looking like the superior candidate as it doesn't carry the JAK 1 baggage. I'm really looking forward to the full enrollment of Persist 2 and then the readout.
If they're being sold he will remain CEO. If they are going it alone he will be replaced and will remain as CFO. That's my guess anyway.
I read it and understand the data. The key with this drug IS NOT the spleen reduction and has never been the spleen size reduction. That is well known.
Myelofibrosis is about much more than an enlarged spleen.
Jakafi cannot be used in patients with low blood platelets.
That's the niche for pacritinib and that's the pathway to market.
JAKs also have a place in the treatment of many cancers and this is why CTI is special. Baxter is here for a reason. By the way publications on Seeking Alpha are hardly empirical or trustworthy.
Please do your own DD and good luck!
Disagree. The data was very much in line with expectations. Everyone knows that a selective JAK2 is going to have more modest effects on the spleen. It's thrombocytopenia patients who will benefit. I went through the same nonsense with YM Bioscience. Pacritinib will be a winner and those willing to buy, add and hold will be rewarded.
I don't agree and have never agreed with this strategy. These are the growing pains that a small company faces when they go alone and so far Acadia is not executing in a way that gives me confidence. The drug package looks great and that's where Uli was strong. The manufacturing side is a disaster and we're losing precious time and precious money. I'm not very happy with Acadia's execution. This is a new tone from me on this board. Suddenly we're flooded with investor lawsuits and totally confusing messages from Acadia's management. I know I'm not the only one here who is completely ticked that Uli promised the NDA filing this quarter and that was just two weeks ago on the earnings call. Totally unacceptable and amateurish. Baker Bros needs to handle this process much better. Personally, I'm ready for a partner to step in and help Acadia take this over the goal line. I'm not seeing the talent within Acadia (yet) that tells me they can go it alone. I'm still very long, but I'm also very annoyed. I want to see some execution out of these guys. Enough is enough with the missed timelines. Promise and deliver and then over deliver.
Great points. Alzheimer's is sort of a lottery ticket in my mind. I am expecting a sleep benefit, but I don't know about anything else. I think we all feel the same about that.
If they do an M&A deal I would do it before Alzheimer's data and then attach some contingency value rights so there is more upside if Alzheimer's pans out.
Wow, what a crazy 24 hours. I almost wish the next earnings report would come up soon so we can get a corporate update! I want to know much more about the strategic thoughts of this management team.
One thing does still concern me so I want to see what others think. Acadia has cash through "at least" 2016 so they have plenty. However, we don't know when the NDA will be filed and if it's late 2015 then we may only have a year of cash on hand. Do you think they will raise again? I'm on the wall about this.
I agree that we need the name of the reporter. Typically, reporters are not privy to this type of information. This is a public company and I doubt seriously that any insiders were speaking to reporters off the record.
It wouldn't shock his options in the hopper. He was blowing them out for a long time, but I think he had many many options since Acadia was his baby since it was a private company.
I did some digging regarding the CFO a long time ago and heard that he was quite ill. I don't think it's related. However, Tom Aasen was Uli's right hand man before Pimavanserin became this potential blockbuster. I don't doubt that Uli struggled a bit without him. Having said all of this, your point is valid as this is an entirely new management team. Like you, I'm a bit shell shocked. Painful day but I don't want to react and miss and opportunity. I really wish the analysts would have asked more questions on the call today. No one even asked asked the CEO search. I was surprised that it didn't come up. If it did come up I missed it.
I actually had confidence in Uli as well, but in the sense that he would bring the right people on board. I really think he's an academic guy who truly doesn't understand M&A or commercial launches. I'm a bit annoyed that Baker Bros didn't replace him sooner. The bummer here is that we gave up such an excellent gain. The good thing is that the lost value will come back once Acadia 1) is sold or 2) truly brings in a highly experienced CEO ready/able to take a drug to market. Stephen Davis could be our guy if it's M&A. If they bring in someone else then I'll be sold that they really want to stay independent.
Anyway, I'm not selling any shares at all and might even add here and there. If the drug is the same (and it sounds like the drug is not the issue) then I'm not very worried. I'm just missing that beautiful gain. However, sometimes these drops are opportunities so I'll be watching closely. Don't hate me by the way...I enjoy our dialogue and it's good to bounce ideas back and forth to try and come up with the real picture.
This certainly crossed my mind. I even wondered if they neglected certain areas simply because they thought they would be sold by now. Regardless, Uli being out seems like the best thing. He is not a deal maker on any level. One thing I definitely believe is that this delay increases the odds of M&A. Acadia is not executing on the commercial side in a way that gives confidence. A pharma partner could correct this immediately.
I will share another post that I wrote a few moments ago regarding Baker. I will just paste the part about Baker Bros below. I don't think they will buy more, but I do think they will become much more hands-on to get this company going in the right direction. There has never been more justification for M&A in my opinion.
My main argument for M&A early on was that Acadia was more of a drug development virtual company and wasn't prepared to become a commercial organization. I think we're seeing now that this was definitely true. Very bad execution Acadia.
I expect Baker Bros to do the logical thing which is to start the M&A process to bring the partner that can help Acadia cross the finish line. This isn't the first time Stephen David has led a Baker Bros company. He ran Neurogen for them (I was an investor) and did a very interesting deal.