All old news. Persistence of liver problems in even a few ET patients is horrible, because the disease is so mild--but that's not a current issue. Gerontiacs claim FDA has declared that liver stuff is a non-issue. What I see is that FDA considers it likely that trial subjects will benefit more from treatment than they suffer, and that IS possible that the drug may be approvable. I came up with a nicely sententious version of FDA's attitude to not-quite-Hy's-Law liver damage: no absolution, but perhaps redemption. (I loved the book on the sociology of surgical training: "Forgive and Remember" If you read it, think of Tefferi and his personal take on how drug trials ought to be done)
Mechanism? "Don't know." It's quite possible that there are several, all controlling part of the story. Plenty of speculation on that in the SA discussion. I particularly liked 'gob smacked at the drop's' comment "I find the imet mechanism of telomerase inhibition simple to grasp/visualize..... but you're saying it may not be real.....but didn't Blackburn get a Nobel for this?" It captures the problem exactly. Nothing wrong therapeutically with having an indefinite mechanism, but uncomfortable for the studio audience.
I seem to recall you scribbling stuff up here in the past. Please play nice now.
Looks like the "thinks it's smart" money is in "Papers. Good for Geron. Bad for Incyte." mode today.
I still don't know much, but the first little dribble I saw suggests that the MF paper has been sanitized of instances that look too non-protocol-guided. That could turn interesting. Some of the instances where treatment didn't resemble a protocol turned out well in the posters, and Geron partisans will want to keep the ability to talk about those.
That was exhausting. Rubbing up close against those people I have a much better sense of who's what. [Somebody calls Jakafi palliative no matter how many times you put the survival data on the label in front of him, and claims to know about adverse events FDA doesn't know about]
Until more information is available TO US (online access to NEJM isn't common among individual investors), the presumption is that these are formal reports of old news. We saw the posters years ago.
The earliest plausible time when Imetelstat might reach market is 2018. That's beyond most investors' time horizon, and by then Jakafi for MF is expected to be a detail of Incyte's earnings.
The ET publication is of limited business interest because, pasting a paragraph from Geron's web site:
"Menlo Park, Calif., November 3, 2014 - Geron Corporation (Nasdaq: GERN) announced today that the U.S. Food and Drug Administration (FDA) has removed the full clinical hold on Geron's investigational new drug (IND) application for imetelstat. In addition, the FDA stated that Geron's proposed clinical development plan for imetelstat that is focused on high-risk myeloid malignancies, such as myelofibrosis (MF), is acceptable. The FDA acknowledged that the company does not intend to conduct further studies in, or develop imetelstat for, the treatment of essential thrombocythemia (ET) or polycythemia vera, which is consistent with the company's plans as originally disclosed in April 2013."
What got into his bloodstream? Generic ruxo this year? He ought to have woken up after writing that. Confusing targets with drugs? That's how he gave the impression that ruxo and bari are the same thing.
The revision also cites bunch of potential drug candidates not on the "official" list. perhaps they were previously announced, I don't recall.
A lot of things have driven prices higher, but the one I consider the worst was Medicare part D (You did a heckuva job, Bushie). This is what you get when people who believe government can do no good try to put together a government program that does good. Medicare is the biggest single customer for drugs, and is forbidden to negotiate drug pricing. Obamacare was supposed to partially correct it by expanding Medicaid, which IS allowed to negotiate drug pricing. But the panjandrums of too many states don't want to expand a program For Those People, so Medicaid didn't grow as much as anticipated. Insurance companies, of course, have no incentive to get lower drug prices (in fact, have an incentive against it) so long as they all get the SAME price. So nobody with real market power is trying to push prices down, and this is what we get. Medicare IS permitted to negotiate pricing of medical tests, and the situation there is a lot closer to reasonable.
Yeah, that was me. As long as the Geroniacs don't scribble up THIS board again I'm inclined to leave their board alone; it's probably better that I don't look. ONLY if someone says something funny, pass it on. As I said: stub of a company, of no particular interest to us, but they really wanted an Incyte fan to play.
My favorite part of it was that it got me to read adverse event listings form the PPI (label). 8% incidence of urinary tract infections...everyone's heard of "Honeymoon bladder," right? Sex is SO much better when your giant spleen is shrunk to normal. Hadn't thought...
After a lot of devious thinking, my best present guess is that in the present low interest rate environment they consider commercial real estate a good place to park cash, and they particularly like a building that they are in a position to see keeps its tenant
The art isn't never to lose money (The Blessed Warren gives that as a goal, but even he sometimes falls short), but to make more on your winners than you lose on your losers. That takes a lot more discipline on the short side than on the long side. [sitting forever on a position that has gone 20+% against you, and where the original "fatal damage" hasn't actually hurt much, doesn't sound like the needed level of discipline]
Most I can read into this is that somebody is acting as if Incyte will have a use for its own headquarters for a few years. And we already knew that top brass were thinking that way. There isn't a heck of a lot that they could know and not be required to disclose. The really material one, that they would even be forbidden to disclose, would be if Janus 1 JUST failed to get stopped for slaughter. They know the results of the open-label run-ins of the various phase 2-s (a person could go broke very quickly investing based on the run-in parts of phase 2-s). And of course they know a lot about the pipeline that they aren't publicizing. Lilly will be doing the selling on Bari, so that doesn't require more desk space for sales. Any one of the combos, though, probably WOULD put more butts in chairs, and PaCa is different enough for MPNs to probably need new hires. The best guarantee of continued independence is a pipeline rich enough so the uncertainty about the real value of far future business is comparable to or larger than the market cap.
Continuing on short interest: came out yesterday. Basically, unchanged report. If I was short, I'd have covered some in this negative market, but we'll have to wait a few more weeks to see if anyone did.
Not that it would be hard (It would probably be criminal), but I doubt that you know how MUCH EZ I own. That use of 'we,' though--are you a Goldman house login? I'd be sad.
If you can find where I claimed to be perfect, please ridicule that publicly. You won't have a lot of trouble, though, finding where I said that Myriad's trade secrets were critical but the gene patents weren't, and management distraction due to lawsuits was a drag. And sure enough, that's what time seems to be revealing.
If you've been short any large sector that MYGN was a logical part of for the last 2 years, you've probably lost a ton. If you were just short Myriad, you still have your skin, and you can save it by covering. And if you're Goldman, well, justice is delayed, but some day...
Just read the SA summary of the narrative. Basically, WF is believing the obvious. Hereditary cancer holding steady because the value is all in trade secrets (mostly database). Prolaris making a modest real contribution once CMS lists it, and Vectra benefitting from the new selling emphasis. They think the mid-Sept thing may draw some buyers.
I HAVE to think Goldman and friends are about to make another assault against the database.
I try to keep the ones that should be mechanical pretty mechanical. So "no air" is basically 5 x value of existing revenue streams. I showed my work for "fair value." You could maybe credit for an estimate of milestones earned but not paid, or for a bigger estimate of solid tumor revenues within a reasonable time window. But then again, you might debit for uncertainties of Bari timing (there WILL be political opposition) or of moving from a pure development company to a full drug company. Or you might do things completely differently--we're in the extraordinary situation of being able to put good estimates on trajectory of risk-free rate (constant for 3 years), so a formal Black-Scholes valuation of some of the development programs might be plausible (if you do it, offer it for big bux to the wire houses). Obviously, with no good way of putting a value on the IP assets, a classic Graham / Dodd analysis can't even start.
I should really revisit my old essay on different values. But I don't have time. A few are "All air squeezed out" around $50, "hostile takeover" around $230 and "price when presently-visible pipeline matures" around $400. Each of the Incyte drug targets I know of has the pleasant property that the total loss from a failure of the program addressing it would be much less than a year of the sales that could be generated by success.
What I called 'fair' was roughly based on money that could be made "beyond reasonable doubt" (in the legal sense), with marketing in sight within 2 years. Jakafi for MPNs, Bari and some success in a solid tumor program (we know for sure that both Ruxo for PaCa and and epac in a combination for melanoma "sorta work;" $1 bln corresponds to 1 of them being a moderate success).
I said some candidate programs are open to the sky. I don't include Bari for diabetic nephropathy because the money, if any, would be 5-6 years out (the condition addressed is the single most expensive disease, but being chronic, it has a hard time attracting accelerated approvals) I DO include Ruxo for toxic cancers beyond PaCa, since it could be sold immediately if Janus 1 succeeds, and wasting (wasting and weakness pretty much define toxic cancer) is VERY prominent in advanced PaCa. I include Epac... in combination with Keytruda because the companion drug is already marketed and an effective booster would be a gimme for accelerated approval...and after that, Merck is good at selling. I include the '110 + '093 program, even though it isn't quite as advanced as the others, because oncologists are really ready to mow down B cell malignancies (so many half-miracles; it REALLY has the feel that one new mode of action should push them over the goal line) (My friend Sara Jane is living on a half-miracle now, against myeloma).
The BRD drug is another possible sprinter; some of the stuff it did in pre-clinical demos was just "impossible." If partisans of that oligonucleotide drug can point to demos, we can too.
Taking 5 x peak sales as fair value for a drug developer. Gonna be at least $1 1/4 bln for Jakafi in MPNs. $1 bln for Bari in RA and at least another $1bln from solid tumors (Ruxo, Epac). Some of that stuff seriously open-ended to the sky (Ruxo for solid tumors is my favorite). Yeah, you can get way below fair value, but a company making its first solid move into black GAAP numbers is a good candidate for fair value or better.
No China business. EU business a bag on the side. No oil futures that I know of. My understanding of Incyte's institutional ownership is that a minority of it is in mutual funds that could be forced to liquidate. I think the late (but not on-close) weakness looks like a move of available funds into Dow stocks to try to break the drop.
I have Peter Lynch's story about his family vacation on a shelf somewhere. Gonna re-read it if I can.