Still reading. There's a lot to it. But it'll take a couple reports before I know how much to trust the new guy. FWIW, there are the usual signs that he wanted to give a bigger number but had to stop adding parts to his sum.
Yahoo has truncated ancient news, but reading Intermune releases and free associating, I think the last time Intermune dropped below 8 was when Spain missed a confidently-predicted approval date. Shortly after that, France approved a little earlier than expected and the stock price went up a bit.
Spain, of course, still hasn't approved.
Intercept is actually less attractive from an investment standpoint. Their breakthrough result came about as a result of a third-party trial. A lot of commercially valuable information simply wasn't gathered. The company had not worked itself into anything resembling preparedness to take advantage of the success.
Intermune ran its own trials and obtained results it is prepared to act on. Intercept skyrocketed because its spectacular result was a surprise to most observers. Intermune ought to grow going forward because its spectacular result is near the top of an anticipated range.
My time horizon is relatively long, but Intercept is likely to take longer than I like to wait to grow into its shoes (alternatively, to get the best price in a buy-out it helps to look prepared to go it alone--a potential acquirer of Intercept could step back for a couple of years; Intermune is ready to go in about a year).
If you'd take the (slight) trouble to look up the news around those prior huge up and down moves you would understand that ASCEND has delivered what was only hoped for in the past.
I was there when it did those jumps and dives. I got crushed in a small way by most of them trying plausible option strategies. I've learned to keep it simple.
I can't believe that FDA will be any obstacle at all after a result as compelling as this in a trial that was meant to be the tie breaker. They ALWAYS want mortality endpoints, but they also know perfectly well that requiring them is unreasonable for chronic diseases of any rarity. Management would be criminally stupid to say this, but FDA already looks bad in the face of 2 years of satisfactory European experience and a very favorable meta-analysis.
I'm overcommitted to this one issue. I'll sell soon in my IRAs, which are supposed to be exclusively closed-end funds (very easy long-term strategy; see "A Random Walk Down Wall Street") Probably sell a little in regular accounts to pay off margin, but keep selling puts into ongoing disbelief. Today wasn't most of the money to be made, but it was the easy, don't need a strategy part.
The ATS conf could be a positive catalyst if BI reports an AE profile anything like what they had in p2. I really can't see FDA convening another expert panel, but if they do, that could be another opportunity. It's possible that in the next few Qs we'll hear about increased European sales...that would be positive, especially if total European sales pass $60MM a quarter (a stretch for the next year, but still very symbolic).
My biggest payday in 40+years of investing. Special situation that was easy to predict if you knew to look, but scary because of all sorts of irrelevancies (see Scott Harkonen, the details of charges in the SAC mess, maybe Google Intermune together with IQWiG). Like INCY, the price is justified eventually, but there's some question about right now.
BoA/ML didn't actually cover ITMN, but neither did a lot of the other big boys, and all the rest of the gang were on the call asking questions.
Big doings with Intermune, another biotech that's turning into a real drug company (maybe), and again BoA/ML had nobody asking questions on the call.
That was one of the improvements in the ASCEND protocol: COPD progresses slower than IPF and doesn't respond to Pirfenidone. A greater effort was made to ensure that enrolled patients had IPF rather than a combination.
Dan Welch actually called it that on the brag call. Said to be 10x as potent on a weight basis and better tolerated. IND hoped for in about a year. If its clinical effectiveness is comparable to Pirfenidone it would rise to 'fair' in my estimation. More important for IPF patients, a more potent drug bespeaks better characterization of a target for the drug. It's a tenet of scientific medicine that understanding exactly what is going wrong can guide efforts to make it not go wrong.
First thing, I don't see a reason for Intermune to remain independent, but neither do I see any rush to sell the company. Probably like 9-18 months off; probably in the $60-100 range.
It'll be interesting to see how European sales react to this result. Potential acquirers will be looking at potential market penetration. Side effects of the BI candidate are another item to watch.
Reading the 10K, the R&D staff has gotten respectably large. Add that to recent reappearance of talk about a "Son of Pirfenidone" and there might be some pipeline value that we don't know about--but such things also get in the way of takeover.
Generic competition in the US will be impeded by label instructions for reducing side effects--the generic label will have to be the same as the proprietary label, but those instructions are patented. That gimmick may not help much outside the US. So a lot remains TBD.
I too would have expected a quick filing, but the language doesn't rule it out, only says "by" third Q. There's a case for waiting until after mid-May (Thoracic conf) to file: Intermune can get a lot of discussion of its preference for categorical analysis of the data, and adjust for how it leads.
Partly it's getting paid up front, partly that the rollover tends to be cheaper if the timing is off When you're right, the put liquidates itself completely, while it's awfully tempting to roll calls when you're right (and correct to do it if the move is long-term) The other side is that rolling calls upward in the middle of their lifetime preserves a lot of value when the movement is smooth but faster than expected. Just in general, put prices just seem to adjust more sluggishly than call prices, so "events" can be exploited more easily (the other side there is put liquidity tends to be lower, so it's sometimes slow for even retail buyers to take a position)
Well, the $30MM is nice, and the conciliatory noises along with the money are nice too. But I think the big fish in this kettle is Qualcomm, and they aren't real likely to settle. So unfortunately, the legal fees continue. I think.
The language in the 10K leaves that as a possibility. But really, a formal Black-Scholes viewpoint is kind of sideways when looking at an underlying that people hold such strong opinions about.
There re LOTS of possible events over the next year. Take your choice, and invent some, too (EMA release of commercially-sensitive information? Euro crisis?).
While they're formally equivalent, I prefer covered calls when the underlying price is likely to move somewhat smoothly and short puts when movements are more likely to be sudden.
The 10-K reports a solved problem regarding internal controls over tax reporting. I didn't see anything that looked like real substance, and for a loss-making company I can't see that in itself it's anything to worry about. But I don't recall any contemporaneous announcement of the problem, and I don't recall any qualified accountants' letters. Anyone else?