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Tessera Technologies Inc. Message Board

jacosa 121 posts  |  Last Activity: 5 hours ago Member since: Jan 24, 2000
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  • Reply to

    What to look for in a Prolaris LCD

    by jacosa Jul 15, 2015 3:10 PM
    jacosa jacosa Jul 15, 2015 10:36 PM Flag

    A Gleason score is a numerical summary of the most important (by experience) features of a pathology report. No separate test (although I presume the minimal bookkeeping involved gets charged for). It's a case of what chemists call "A Pauling point." (the reference is mostly to Linus Pauling's concept of electronegativity). It is an easy number to get, and to do better you have to work A Lot harder. The problem with restricting Prolaris by Gleason score is that if you did an aggressiveness vs Gleason score plot (only possible retrospectively), the scatter would be huge. A modest cutoff consigns many men with non-aggressive cancers to definitive treatment.

    I have to say this some time. At 67, I've lost the usual sort of number of friends and family to cancer. About half of them, though, actually died from secondary cancers apparently caused by radiation treatments. Cancer treatment is not benign.

  • jacosa jacosa Jul 15, 2015 3:54 PM Flag

    Well yeah. I think management has to act as if they expect Ruxolitinib to be used in all toxic cancers, Baricitinib to replace all anti-TNFs and at least 2 each of the present phase 2 candidates and the present barely-clinical candidates to succeed. (with a pipeline still full while those are paying off)

    Not likely, but not impossible either. An acquirer, of course, has to have "other" expectations.

  • With the decision due Any Day Now, I've been looking at whatever I can find on process, significance and surrounding circumstances. For the most part, it makes my head hurt. It might just be as bad as Germany.

    Anyway, the key to market size will be the circumstances under which the test will be considered appropriate. The draft LCD, from November, specified no evidence of metastasis, Gleason score 7 or less and estimated life expectancy of over 10 years; Myriad objected. I think the main problem was the Gleason score, which after all, Prolaris is intended to replace. No metastasis is also vague, since the language didn't make it clear whether spread to the seminal vesicles constituted metastasis for purposes of testing. The language requiring physician training and active follow-up of testing results is not burdensome to Myriad, since that is Myriad's usual practice.

    Watchful waiting has been a very difficult sell in the US, despite evidence that at the rate presently suggested, it has no mortality penalty and a large morbidity advantage relative to definitive treatment. The best selling target for Prolaris in the US may be to recommend against definitive treatment in cases where watchful waiting has an actual mortality advantage. Somewhat comfortingly the draft LCD population matches the profile of US men who might heed a recommendation to manage conservatively; a larger 'appropriate' population would be more useful in seeking expanded reimbursement in other countries than in increasing actual US sales.

  • jacosa jacosa Jul 15, 2015 1:59 PM Flag

    First: I have trouble believing in a real rise in interest rates. Strong dollar is constraining the US economy, and that would make it worse. MAYBE an extra quarter point on balances left with The Fed, just to reduce the political pressure.

    Low rates raise the value of far-future income streams. Incyte is less tied to really far future stuff than most small drug developers, so the extra pressure to do a deal quickly isn't as strong as it might be. Given that management seems to like to maintain the high level of uncertainty about the true value of the company that I've often referred to, higher rates might cause them to reveal more about the "dark pipeline."

    I think it would take an offer in the vicinity of $300 a share to get management endorsement. The company could be put in play for a lot less, but with at LEAST 3 likely interested parties, nobody is likely to want to kick that off.

  • Reply to

    Bear case

    by jacosa Jul 9, 2015 11:24 AM
    jacosa jacosa Jul 14, 2015 1:32 AM Flag

    I'll try to be brief, which everyone here knows is unnatural for me.

    Jakafi is an excellent drug (after about 15,000 patient years no unexpected problems; see the Kaplan-Meier topic for what it does in MF). Market only for presently on-label indications should peak a bit over $1.5bln. Janus 1, a registration trial in pancreatic cancer, has just passed the futility evaluation date and is continuing. Read-out Jan/Feb 2016, target market about $2bln on-label and frankly, infinity off-label (may combat systemic effects of cancers even when it has no other effect). Lilly's set of 4 pivotal trials for Baricitinib will finish before year-end. The 2 that have already completed gave unexpectedly good results, so success is very likely. It's hard to see how a drug as good as Bari now looks WOULDN'T take most of the TNF-antagonist market; Incyte's share would exceed $1 bln. And that's only drugs close to market. There are various smaller trials, mostly designated as phase 2, exploring combinations (well, occasionally single agents) among Ruxolitinib, specific JAK-1 inhibitors, the IDO inhibitor, the c-MET inhibitor and the PI3 kinase delta inhibitor; among them it's about an even chance that SOMETHING will work, every single target has more cases than MPNs, some of the combination trials could result in sales less than a year after a successful read-out. Then there are the just-now-clinical drug candidates, a couple of which have done incredible things in model systems.

    It's often pointed out that Incyte keeps showing GAAP losses. Some poking through the notes in the annual report reveals that intellectual property is carried on the books at cost of obtaining patents. That means that as Ruxolitinib went from promising candidate to marketed drug, there was never income or any other positive in the accounts corresponding to the increased value of its patent estate (etc for other drugs). Yeah, it's GAAP, but it isn't a great representation of reality.

  • Reply to

    Bear case

    by jacosa Jul 9, 2015 11:24 AM
    jacosa jacosa Jul 13, 2015 12:32 PM Flag

    Thanks. Snide remarks about Zack's assumed. I read their report from March (which if I remember correctly was the first Zack's report that acknowledged that Incyte was not primarily a human gene licensing operation).

    They actually mentioned a decent fraction of the collaborative trials, although they completely missed the point that some of them have the potential to generate sales earlier than normal for the designated stage--I'd leave that a 'some' in a formal report). Somehow Janus 1 completely evaded their attention (THEY might defend that as merely strengthening their warning that Incyte is a 1-drug company). Since they're focusing on Incyte as a company making oral anti-cancer drugs, Baricitinib is barely alluded to. Their hindsight remains acute, as they mention the failure of the sheddase inhibitor, what, six years ago?

    Once again I see, without comment, that only 20% of the total milestones negotiated with Novartis have been paid, and wonder what might come when.

    For all that, it's possible that the next quarterly report may be taken badly.

  • Reply to

    Bear case

    by jacosa Jul 9, 2015 11:24 AM
    jacosa jacosa Jul 9, 2015 12:57 PM Flag

    To continue: At this point, any new Jakafi side effect that turned up would have to be a tolerable one relative to MF. It's possible that a new infection signal might be bad enough to limit PV usage. It's pretty clear that the JAK-1 / JAK-2 activity mix can use some tweaking; I'll be looking for signs that Incyte will be ready to handle that when it becomes a business need. Debt, debt, debt. The significant part is in convertibles, and in a growing company that works in your favor: conversion takes it away, at the cost of dilution that everybody has been assuming for a long time in advance. The 3-legged stool of paid capital, borrowed money and retained earnings moves toward balance. But if things go bad, the unexpected need to pay back the lenders when money is already tight can be a deathblow. So right now the debt is no problem, but it could make an extreme event more extreme. Those drug combination trials: half-full/half-empty. There's a substantial chance that one WILL give a marketable result, too. we just have to keep watching. I share substantial concern about Incytes research plans. Less than before, since thay pointed out that the contribution to Lilly's phase 3s for Bari was larger than most of us assumed, and ends, by contract, with the year. But the Janus-s aren't cheap to run, the collaborative trials are individually manageable but there are a lot of them, and if Lilly chooses to pursue Bari vs diabetic nephropathy, it is a complete no-brainer to collaborate to get an increased share (this is the most expensive disease, and the money available for management is second only to dementia). I too am curious about the relatively low management ownership. Not, in my case, because I think they see a disaster coming, but because I think they're feeling too secure about their performance-based compensation.

    I'm almost through the 50-year supply of Jovan Musk for Men that I laid in.

  • jacosa by jacosa Jul 9, 2015 11:24 AM Flag

    When you're VERY long a stock, it's useful to have a bear case. The two recent Incyte bashes on Seeking Alpha have pretty well delivered the ingredients.

    First, the discussions are #$%$, but forgivable. Geron is under bear attack and by reflex, when its fans and owners defend it, they go medieval on Incyte.

    Ok: the elements of the bear case against Incyte are that all revenues are either Jakafi sales [including Jakavi royalties] or milestones, GAAP results are losses, cash flow is consistently negative, Jakafi is a bad drug, ripe for dethronement, Incyte has too much debt, there is less than an even chance that any of the combinations being tried will find a market, Bari is just a me-too of the failed Zeljanz and Incyte's research program is financially insupportable; management has sold a lot of stock and presently has little ownership. [and Incyte bulls smell funny]

    Hookay, some of these points are so scrambled that they can be used to identify paid bashers (Using Upton Sinclair's observation from his venture into politics. “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”). Anyone who calls Jakafi a palliative that relieves only one MF symptom for the short time it can be given before its side effects force discontinuation AFTER being shown the revised label is either stupid or paid. Pretty much the same for anyone who harps on GAAP losses after it's pointed out that intellectual property is carried at the cost of obtaining patents. Bari~Xeljanz is #$%$ too, but Lilly is spending 9-figures bux to be sure they can prove that to skeptics; it isn't obvious yet.

    Cash flow has always been hard to track. A lot of money moves around as payments (both in and out) for research, and there is a completely invisible fund of milestones pending. Best way through the Gordean knot is to look at working capital, and it's declining. So estimated cash flows may be worth watching.

  • An article comes out explaining why KODK has been unjustly pummeled and WE recover.

    It helps in staying sane to remember that portfolio runners are the burger flippers of finance.

  • Reply to

    PFE trying to outflank lly/incy

    by moreinfo424 Jul 7, 2015 1:11 AM
    jacosa jacosa Jul 7, 2015 2:11 PM Flag

    Xeljanz is still a pretty bad arthritis drug. And Pfizer's selling problems were in significant part the result of a badly designed program of pivotal trials. They can easily mess up again and gain nothing.

    From the 2 pivoal trials we've seen results of so far, Bari looks just insanely good.

  • I sure picked a great weekend to get norovirus (over the illness but still highly contagious); still, it gives me a chance to think about stuff.

    In Recap, the patients who entered hospice care all discontinued Ruxo (check me on that). I'm curious about whether they had any choice, and about whether there's a prospect of palliative use of Jakafi going on-label as a result of the Janus trials.

    Ruxo alone was not a test treatment in Recap, so continuing it in a hospice setting would have been outside the protocol; Capecitabine is a drug meant to prolong life which does not increase patient comfort, so it would surely be excluded from hospice use. So in a strict sense, continuing Ruxo into hospice should be excluded. But objectively, a meaningful number of subjects on the trial drug experienced weight gain, which is unheard of among terminal PaCa patients, and which in itself contributes to subjective wellbeing in both patients and families. Subjectively, it's not presented in a way that's easy to be sure of, but non-specific constitutional problems MAY have been helped by Ruxo.

    One of the secondary outcome measures of Janus 1 is "Safety and tolerability of the treatment regimens assessed by a summary of adverse events and clinical laboratory assessments. [ Time Frame: Baseline through approximately 30 days post treatment discontinuation. Approximately 21 months. ]"

    Again, Ruxo alone is not a treatment arm, but the study is large enough to highlight any "never happens" tolerability events. It seems possible, in principle, for Janus 2 to be modified to allow continuation of Ruxo alone into a hospice setting, if the hospice programs agree. That could be enough to put it on-label. Hospice programs could adopt palliative use of Ruxo without a label, but Incyte can't promote it without one.

  • Reply to

    How to look at a Kaplan-Meier chart

    by jacosa Jul 3, 2015 2:58 PM
    jacosa jacosa Jul 3, 2015 3:00 PM Flag

    We seem to be getting fewer characters to a posting.

    The long-time ends of those curves are confounded by crossovers in the trial designs, and of course you should study inclusion and exclusion criteria and protocols to be accurate about who is helped by what sort of treatment. But just from those curves one can say that a fairly typical mild-to-intermediate-risk MF patient will live a year longer taking Jakafi than with the control treatments.

    Future refinements in what you can say about survival advantage will not have such compelling trial designs behind them. The best we can hope for in medium- and high- risk patients is comparison against matched historical controls. While treatment of indolent and low-risk MF is not on the Jakafi label, we can expect to see studies in these groups, either from Incyte or from independent investigators. These trials may have simultaneous randomized control groups.

    Note that for less-rapidly-fatal diseases, a modest visual separation of Kaplan-Meier curves can represent a substantial difference in survival time. On the other hand, when we see results presented concerning pancreatic cancer, large visual separations may represent few days of survival. There are drugs that change the shape of Kaplan-Meier curves (this is often called disease modification) and drugs that shift the curves (often called giving a respite).

  • We haven't been affected much by it here, but lots of other internet stock discussion areas are in the throes of yet another [you know what company] battle. Basically, with a string of not-bad events, the stock price went up substantially and that appears to have precipitated a bear raid. The people who plague us from time to time are defending the stock price. I wouldn't have noticed, except for some Seeking Alpha articles suggesting shorting Incyte. There are the usual bleats about Jakafi giving only relief of symptoms. I just want to make it clear how dramatic the evidence of a survival benefit of Jakafi is [the magnitude of the effect is probably why the FDA took the extraordinary step of allowing data from a post-hoc trial data analysis on a drug label]

    Look at the right of page 8 of the professional package insert (find it online). Those curves show fraction of survivors vs time. There are details about how they're drawn, but with enough subjects and enough time the details become ignorable. What first catches the eye is the vertical separation between the curves, which is unfortunate. That's the difference between %survivors on the treatments compared at a given time; a rather sterile number. More compelling is the horizontal separation of the curves. That compares the time that a given fraction of subjects survive until. At a first glance, the 2/3 survival level is a reasonable starting point. In the upper graph we get a crib: the numbers called out say that 1/3 of controls had died by the 2 year point, but that number of deaths was not yet reached by 3 years in the treatment group. The lower curve shows slightly better experience for the control group, but very comparable experience for the treatment group. Less

  • Geron fanatics are good for something. One of them alerted me to a study out of Dr Verstovsek's lab recently published in "Blood," showing that the relatively small number of MF patients with 3 or more of the mutations commonly associated with MF do substantially less well on Jakafi than those with fewer mutations [Of course he was trying to say that it proved Jakafi is a lousy drug]. It isn't completely clear from the article, but the test looks comparable in complexity to some in use as companion diagnostics. It's also unclear whether this was a new purpose-designed study or a more detailed analysis of earlier results. I'm not including the link because I had to register to see the article.

    Obvious significance is that there's a real hope of this turning into a way to identify patients who might need extra attention if they are given Jakafi. Slightly less obviously, this may become part of the case for putting mild MF onto the Jakafi label.

  • Reply to

    Immunovaccine collaboration

    by jacosa Jun 25, 2015 12:39 PM
    jacosa jacosa Jul 1, 2015 2:09 AM Flag

    Look up the news story. Company name is Immunovaccine. Phase 1 trial. Unusual case: usually Incyte wants maximum publicity but the collaborator wants secrecy. Immunovaccine wants SOME publicity.

  • Reply to

    Technicals and buyout

    by soozanie Jun 28, 2015 3:59 PM
    jacosa jacosa Jun 29, 2015 3:45 PM Flag

    The market cliché that I keep repeating is "Don't sell on war news." Economic collapse of Greece is much like defeat in a war.

  • Reply to

    What if cohen wants to delist?

    by money_walker Jun 12, 2015 5:10 PM
    jacosa jacosa Jun 26, 2015 5:04 PM Flag

    Tricky. Any dividend and any proceeds of liquidation must be split with the same amount per share for both classes. The management advisory fee for the last 2-3 years of its existence looked like an end run around the dividend rule. The change in corporate bylaws by reverse merger shows how the whole thing could be defeated. But shafting the owners completely without triggering major legal action is not trivially easy.

  • Reply to

    Geron is no real competition for Incyte!

    by centquatre2015 Jun 22, 2015 5:39 AM
    jacosa jacosa Jun 25, 2015 3:16 PM Flag

    When does that phase 2 read out? And normally, even for an orphan indication, a phase 3 is required for approval. Furthermore, Incyte is already permitted to include a lengthened survival claim on the drug label; no matter how good Imetelstat might turn out to be, it will not launch with survival on its label (no previously treated patient can be counted because the present study is the first in MF with the kind of statistical safeguards FDA requires).

    The market has a short and a long side, and neither is immoral. (As long as the law allows, I'm happy to be making money charging what the market will bear for a vital drug). Shorts tend to be smarter and more interesting than longs, but they go broke pretty often.

  • I just found out what the proposed trial looks like. Combination of a biological that is targeted against a protein that helps cells resist an order to kill themselves from immune cells, an old-line DNA damaging drug and the IDO inhibitor. Pretty typical for this year's immunotherapy trials.

  • Reply to

    What if cohen wants to delist?

    by money_walker Jun 12, 2015 5:10 PM
    jacosa jacosa Jun 25, 2015 12:26 PM Flag

    His important holding is Class B common shares. No [dividend] preference over Class A. Any spectacularly anti-owner action would prompt lawsuits. Directors are personally liable, and if they act perversely to their fiduciary duties, I don't think their insurance covers it.

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