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Tessera Technologies Inc. Message Board

jacosa 128 posts  |  Last Activity: 22 hours ago Member since: Jan 24, 2000
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  • Reply to

    Congressional interest

    by jacosa Apr 27, 2016 12:06 PM

    In a typically bad, but on-theme, posting, ValueWalk just reported on the Senate hearing. (Important error: unlike Medicare, Medicaid is permitted to negotiate drug prices). The key theme is mechanisms OTHER THAN patent protection that drug companies use to hold monopoly power.

    Drug companies aren't supposed to be able to bill their patient assistance programs back to the government, but apparently Valeant was effectively doing that.

    I can't guess how this will tie into the REAL government money issue in drugs: hepatitis C (HCV). The drugs are under patent and hugely expensive. Numerous false starts made them costly to develop. There's a possible way to keep this messy situation from infecting the whole drug pricing system--since a vary large number of HCV patients were infected in Vietnam era service, a special sub-agency could take over their treatment, with price negotiating power (and then, heh-heh, also manage care for civilians in a parallel position). This would resemble the way Medicare was saved from kidney failure costs.

    The possible ways this could affect Incyte are that the HCV situation could lead to regulation of how companies are compensated for costly and uncertain development efforts (US "N.I.C.E." [shudder]) , or that the drug company / pharmacy relationship could be regulated in the name of promoting free markets. Since one tool drug companies use to retain monopolies is regulation of generic manufacturing, that may be relaxed. That doesn't nominally affect Incyte, but it increases the risk of midnight manufacturing of counterfeit drugs. Jakafi has one of the largest spreads between cost of API manufacture and selling price.

    Obviously, with both houses of Congress controlled by Repubs, little action is likely this year. Next year, a lot may depend on where Sen Warren fits into the administration. I THINK her first interest is non-bank financial instiutions, so the top firebrand will likely go elsewhere.

  • Reply to

    Congressional interest

    by jacosa Apr 27, 2016 12:06 PM
    jacosa jacosa Apr 28, 2016 9:58 AM Flag

    Don't worry. The Dem-controlled Congress will keep this going next year.

  • Reply to

    Disaster in Rennes

    by jacosa Jan 15, 2016 4:52 PM
    jacosa jacosa Apr 27, 2016 1:51 PM Flag

    Fierce Biotech reported tentative final conclusions on 4/21. Basically, the drug was metabolized slower than anticipated in humans and was weaker than anticipated at its intended action. It accumulated in the brains of the subjects until they were harmed by off-target toxicity. FDA [probably] wouldn't let you run a trial involving multiple administrations until the fate of administered drug was understood well enough to avoid this.

  • Right now, ongoing price increases are getting looked at (and they should be). Incyte has been doing this, but the asparagus-like volume growth of Jakafi has masked its significance. Another issue, getting less press attention right now, is abuse of the specialty pharmacy system. Incyte did this, but seems to have stopped.

    The story is VERY complicated. The market for old [out-of-patent] drugs in the general price range of $100 for a course of treatment [or a year, in chronic conditions] is where the real drama is happening. Many such drugs went years with no price increases. They now have single manufacturers which have no business incentive to meet increases in demand unless they can take price increases. While profit margins are spectacular on first look, the price for a new entrant to get into the market for one of these drugs is enough so effective monopolies continue. This is where Valeant used to play, and where Turing made its mess.

    Price increases on Jakafi-class drugs gather some headlines, but I don't see much actual concern, on either side. Only the uninsured pay list, true pricing is arcane, and nobody wants to open the box [it OUGHT to be opened, but then you might have to DO SOMETHING about what you find].

    Specialty pharmacy abuse is awaiting its star turn. Philidor was both a parking lot for bad investments and a competitive weapon, but it blew up real good. Non-captive specialty pharmacies are less problematic, but telegraphing a price increase near quarter end can get them to buy your stale inventory. The bigger issue is that draconian prescribing enforcement can prevent competitors getting your product for comparative trials. Incyte did both, but seems to have learned from bad press.

    I don't recall any real complaints about prices of new-to-market drugs. Again, headlines without stories.

  • Reply to

    incyte trading

    by tjnelis Apr 26, 2016 10:23 AM
    jacosa jacosa Apr 26, 2016 8:07 PM Flag

    Artile on drug pricing in NY Times may have hurt us.

  • Reply to

    1st q estimates for incyte

    by tjnelis Apr 21, 2016 5:26 PM
    jacosa jacosa Apr 26, 2016 5:19 PM Flag

    I looked. Yeah, GVHD is nasty and clearing it up can be dramatic. But the picture by itself is worth a lot less than 1000 words.

    We should know how the label expansion study is going to turn out by the time it begins, about a year from now, because a lot of open-label testing is likely to happen. If it goes on-label, it should happen in about 2 years. A JAK-1 drug figures to be starting phase 3 around when GVHD might go on the Jakafi label. But the initial proposed label for the JAK-1 drug may not include GVHD.

  • I just called up a 2-year chart to see if it told a story. I think it did.

    The start of the PV business was well-received. Then about a year ago enthusiasm developed for the prospects of epac, and people also started attaching value to the prospects of ruxo for solid tumors. To my eye, nothing related to bari made much difference at all--while sell-siders mostly ignored it, I presume buy-siders had already included a high likelihood of success into their actions. As it became clear that epac was something less than magical, that premium came down, and when the solid tumor trials failed that premium was lost (and a little extra).

    As I said at the time, the recent low-$60s bottom looked a lot like fair value for Jakafi in MPNs + value for bari as a somewhat-distant-future success. We're up about $15 from that--a decent guess is that hopes for epac have come back into the price (along with fading of competitive prospects in MPNs).

    The value of something like this is that putting a star next to items that have affected the price in the past can give a hint at areas in which changes may affect the price.

    There IS one thing that is highly visible and "different." There's a clock running on bari approval. and I put the time on it at 8 months right now. That's the edge between long-term and near-term for some big investors. But however likely, future drug approvals aren't ever valued as a pot of money at a given future time, so while the approaching approval is a tailwind, it probably won't be prominent.

  • Reply to

    Jacosa ASCO Abstracts

    by tazamatic2002 Apr 21, 2016 6:23 PM
    jacosa jacosa Apr 22, 2016 12:22 PM Flag

    I'm not paying much attention to pacritinib these days because AEs make it unlikely to become first-line.

    The IM poster represents something like 3% of the full patient experience by the time that study finishes (about another 18 months). This is an open label dose-finding (and also some basic pharmacology) / expansion study with no alternative treatment to IM as control. It's unlikely that the full abstract will even report a dose selected for the expansion phase, although it may be determined by the time of presentation. Do read the Sept NEJM paper for a hint of what to expect.

  • Reply to

    Jacosa ASCO Abstracts

    by tazamatic2002 Apr 21, 2016 6:23 PM
    jacosa jacosa Apr 21, 2016 7:27 PM Flag

    Both are highly important. I think the former one is unlikely to contain any surprises, and the cohort still being followed is getting depleted. The latter could genuinely double the MF market, but we're talking about giving a costly drug with a serious adverse events profile to generally healthy people for a long time. It's going to take a lot of evidence from more than one study to justify such a thing.

  • Reply to

    1st q estimates for incyte

    by tjnelis Apr 21, 2016 5:26 PM
    jacosa jacosa Apr 21, 2016 7:21 PM Flag

    I'm not sure how an outsider makes anything other than a pure guess on total ruxo sales, and that's still the most important number. The costs of ending a clinical trial are generally less than ongoing costs of running it; there may be some surprises here partly because I'm pretty sure the statistical analysis will be much more intensive than for the usual failed trial, and partly because slower projected LONG term growth of the ruxo business may cause some "corporate actions"

    This will be the first quarter entirely post bari development expenses.

    Incyte won't say, but analysts may, whether GVHD usage is visible yet. Cowboy oncologists do proportionally more marrow grafts, so they're more likely to grab at highly experimental treatments.

  • Reply to

    Word on the Street

    by njlorelei Apr 21, 2016 12:19 PM
    jacosa jacosa Apr 21, 2016 1:24 PM Flag

    Yeah, abstracts released yesterday. Struck me as odd to get any readout at all this soon, so I checked clinicaltrials. Imbark is a rather unusual study; mostly phase 2 with phase 1 aspects (rumored, at least on the Geron board, to have an option to become part of an approval package). Open label. Roughly 1/3 of the way to nominal completion. Most interesting thing that could come out this early is basic tolerability (since the study compares 2 doses of IM, that would probably be expressed in terms of preferable go-forward dose). I'll guess that they might have around 100 patient-months of experience on the poster (of around 3000 patient months for the total study, assuming good subject retention).

  • Reply to

    If I was out of peaches...

    by jacosa Apr 19, 2016 2:19 PM
    jacosa jacosa Apr 20, 2016 1:43 AM Flag

    I recall that you were highly bearish in the $32 range. You also didn't think Myriad had the sales ability to get a good Vectra sell-in. I seem to recall you predicting that without the gene patents Myriad would lose most of its sales the cheaper competitors. Nice going. If you don't already have a job with Goldman you might be able to get one.

    Again, I get no joy from this. You posted some slop after a long silence and I just thought a newcomer might be misled seeing it.

  • Reply to

    If I was out of peaches...

    by jacosa Apr 19, 2016 2:19 PM
    jacosa jacosa Apr 20, 2016 1:29 AM Flag

    The short interest went from about 3 MM to about 20 MM almost overnight while the stock price was between $26 1/2 and $28. I know that's Goldman (and advisees) because they've been the bearish cheerleaders. There has not been enough volume below that price to have permitted them to move the position without loss. Again, you have been told this before. I answered relatively fast, but I DO hope you held your breath long enough to do the job.

  • Today's drop seems to owe to 2 developments, both of which could be read positively if one chose to.

    1) A would-be competitor was given a substantially lower price (by Covidian acting for CMS) for its genetic cancer risk test than what they asked, or what Myriad gets. Different test, different surrounding package of database and follow-up. Covidian may try to push against Myriad next pricing review, but that's a while off. The medical societies are unlikely to support an attempt by CMS to unbundle testing from follow-up (there are already publications in good journals). And of course, a cheaper price from someone with a far-inferior variant database recalls the old grocer joke "If I was out of peaches I could price them cheaper too."

    2) A high tech medical testing company (Theranos) is in deepening doo-doo (rumored to extend to criminal charges). Being taken in some circles as "Democrats hate us."

    So is bad news for sorta-competitors good or bad for us?

    As for the failed village idiot: his friends at Goldman just reported a 40% year-under-year oops. And their MYGN short position is still $8 a share under water. And rather than answer his latest babble in place: I read Malkiel, not charts.

  • Reply to

    fundamentally a company adrift

    by netprophecy2 Apr 14, 2016 2:53 PM
    jacosa jacosa Apr 19, 2016 1:55 AM Flag

    But Jolie's hysterectomy was her own initiative, unsupported by testing. And you said at the time that it too was a marketing opportunity for Myriad. So this isn't just a case of you not knowing the key issue.

    And as I said before, tests get ordered when the group reviewing the prescriber considers them part of standard-of-care. Physicians can lose hospital privileges or insurance company reimbursement fro a remarkably small number of infractions. If you are a physician and your reviewer approves Prolaris you order it. If they don't, you don't. Patient awareness is a minor issue. And yes, I've had doctors order tests and then cancel them because my insurance company didn't list them.

    And that's enough for this pointless exchange.

  • Reply to

    fundamentally a company adrift

    by netprophecy2 Apr 14, 2016 2:53 PM
    jacosa jacosa Apr 18, 2016 10:09 AM Flag

    And for the zillionth time you've missed the most important point of all. Medical tests are not drugs. The test business is nothing like the drug business. There is some similarity between the medical device business and the test business, most importantly in the difficulty of getting a novel one into use.

    Could they have stopped Angelina Jolie from going on to get medically unjustified surgery? She's a horrible example of failed genetic counseling.and I seriously doubt that she could have been stopped. Makes the people who DIDN'T sign up that embarrassment look good.

  • That was over the top even for me. The key point is that the safety of '465 convincingly beats my benchmark at 12 1/2 weeks. There's absolutely no liver signal; the general thrust of one question was that this is too early to say much about infection, but knock wood, heh?

    I got a sense that the epigenetic agents are farther from clinical application than I'd thought. On the other hand, the immune stimulating agents may be a little closer, if not actually close.

    A chart showed ruxo ointment as on the schedule for use against alopecia areata, but there was no discussion. Nothing about the state of any collaborations or about why the CC is later than expected.

  • Reply to

    4/15 Press release

    by jacosa Apr 16, 2016 10:12 AM
    jacosa jacosa Apr 17, 2016 2:30 PM Flag

    Riffing a little on the list of topics... In a year for cash, nothing called out looks like cash by EoY. Most interesting one is '465, because we know from the marketplace that the target is worth hitting. Key here is safety, and while the hurdle for quality of evidence is high, a convincing case for something like fewer that 5% anticipated serious adverse events would generate a lot of talk. The BRD and LSD1 drugs have already shown potentially interesting profiles, so there could be progress that might promise pivotal-like studies within the year. A blemish has appeared in the BRD field, though--in a non-clinical test system, a different BRD inhibitor was evaded by simple over-production. That, in turn, can become a target, but simple regimens are more likely to get adopted

  • Reply to

    fundamentally a company adrift

    by netprophecy2 Apr 14, 2016 2:53 PM
    jacosa jacosa Apr 17, 2016 12:01 PM Flag

    Your ignorance of the business aspects of medical tests [and devices] is staggering. Your admiration for the Myriad core shorts [who are still $hundreds of million in the hole] is incomprenensible.

    Here, you give us a fine example of the first point. Clearly, you know about Prolaris--have you gotten yourself tested? Have you begged your physician for a Prolaris test? Hmmm, maybe general population awareness doesn't matter so much. Have you ever asked your physician to order a brand-new or unconventional test for you [I have]? Most (I know it's most, but not by what margin) US physicians have their decisions reviewed outside. They are on short-to-very short leashes outside "contemporary standard of care." But you want to run TV ads and detail at the physician level rather than make the pitches to insurance companies, CMS, and medical societies. [Regulation and review bind even tighter in Europe. Outside North America and Europe, except for local innovations, they mostly look at what we DO, not what we say]

    I well recall how you thought that when Angelina Jolie went against test results and medical advice to get a hysterectomy, that was a missed opportunity for Myriad to promote its products.

    And we've seen it before: when Myriad has good news, you'll tell us that you were long all the time.

    Agreed that the core shorts haven't given up yet. But it appears likely that forced covering as Myriad-short biotech baskets got liquidated in the bear reaction moderated the damage to MYGN.

  • I see it mostly as a move to avoid the consequences, seen last year, of mis-identifying a highly technical session as an "Investor presentation." Why they don't give it a more accurate name I can't guess, but after that menu of items to be discussed, all the big sell-side organizations will have techies in the loop as well as the basic business-oriented analysts.

    Just for fun, since we'll know the answers before market open, I'll run a little with the idea that Incyte may be divisionalizing more. I can read into the language a possiblility that the silo around epac will be joined by one around '465, and that immuno-oncology and other targeted therapies would be split out also. This sort of thing would shift the "Chief Drug Development Officer" role far more toward administration, leaving much of the technical work to the officers heading the divisions, which might have moved the job description away from things Rich Levy is interested in doing.

    And again, reshuffling [here, creation] of divisions is one of the things that wouldn't necessarily call for an immediate disclosure, but could delay financial reports.

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