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Tessera Technologies Inc. Message Board

jacosa 118 posts  |  Last Activity: 35 minutes ago Member since: Jan 24, 2000
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  • Just to give some balance to the outbreak of room temperature IQ postings. I hope my bull credentials remain good, and I too predicted February weakness. The possible remaining room to the downside is substantial, but it is so dwarfed by room to the upside later in the year that I'm not doing any "market timing" selling. I've said it before: if you can't stand fluctuations, you're better off with a balanced portfolio of closed end funds (and in fact, I have an account that is structured just like that--over time it does as well as my more adventurous accounts, but it is seriously boring).

  • jacosa jacosa Feb 3, 2015 12:39 PM Flag

    I forgot to mention: as this is posted, INCY is around $74, down from $84 or close enough a couple weeks ago. Unfortunately, this probably counts as a reply to the guy who recognized the reference to him, but when the item gets revived the price reference will help make the point.

  • jacosa jacosa Feb 3, 2015 2:41 PM Flag

    The key point in MYGN is that the short position is huge. It'll take weeks to liquidate. So whenever the bears give up, there will be plenty more up move to catch. I'm overextended. so I prefer to wait that one out a little more. The "floundering management" story has been used in the past by MYGN bears, and can probably be used once more. If you have the liquidity, I can't really object. I don't have it (unless I liquidate some airlines, but they are doing SO nicely).

  • Reply to

    decent results not unexpected

    by duhu12 Feb 3, 2015 4:23 PM
    jacosa jacosa Feb 3, 2015 6:09 PM Flag

    I heard nothing surprising. The money issues are MYRisk backlog and Prolaris reimbursement. The former is a little bit ahead of where it was supposed to be; the latter is dragging, but not spectacularly. Other businesses aren't really at issue.

    I take the CEO change as being timed to give Mr Capone a gofer ball to hit for his first quarter. Aside from all MYRisk hardware being in place, he's going to start with drastically reduced legal expense (and apparent removal of the risk of losing anti-trust suits). Still, I think a lot of analysts would be happier with an outside CEO.

  • jacosa jacosa Feb 4, 2015 1:59 AM Flag

    I don't think it's a common form of baldness

  • Reply to

    decent results not unexpected

    by duhu12 Feb 3, 2015 4:23 PM
    jacosa jacosa Feb 4, 2015 11:20 AM Flag

    Something incidental: Myriad is on a June fiscal year; I'm convinced that a lot of listeners to the call heard about good things anticipated for the 4th quarter and thought "reported in a year," not "reported in six months."

  • Tends to get lost in the other messages. Quoting from the Q1 2015 results release:
    "Myriad is also providing financial guidance for its second fiscal quarter of 2015. The Company is projecting total revenues for the second fiscal quarter of 2015 of $180 to $185 million and adjusted earnings per share of $0.33 to $0.36 (diluted EPS of $0.30 to $0.33)."

    They actually reported total sales of $184 million and adjusted eps of $0.40.

    So why does everyone think they missed? Well, the first thought is that with all those shares short, some of them figure to be concentrated in the accounts of the wonderful people who brought you collateralized debt obligations. They own a lot of the financial press and can rent a lot more of it. And of course, Myriad is much more hated than loved because of the gene ownership issue.

    Yeah, it was a punk quarter in a few ways, and the downward revision in projections was surprisingly large. And of course a CEO replacement always creates vulnerability. But they didn't miss their projections, and there's every reason to think that they revised to numbers that they are absolutely certain they can beat (which is in keeping with the corporate culture of Myriad). In fact, it's likely that some of the pps losses are due to portfolio managers recognizing that management is trying to lowball them (never popular). Where I see lowballing most clearly is in the non-assumption of a bolus of postponed demand for MyRisk.

    I'm adding.

  • Reply to

    Myriad met guidance; bull case intact

    by jacosa Feb 4, 2015 4:54 PM
    jacosa jacosa Feb 4, 2015 7:36 PM Flag

    Defend the statement "they didnt meet the guidance they already gave for fy2015" Same way I attacked it. Statement from management giving a number which can be compared with an actual result, and the actual result.

    The ONLY guidance The company has given that can be compared against actual fy2015 results is the statement cited in the lead item of this topic. There was no early Q1 or H1 guidance offered (maybe you can find something in a Q&A); there was a preannouncement for Q1, which was accurate. Yeah, they'll almost for sure miss original guidance for the full year, but what we just got was a timely revision of that guidance.

    The discussion in the CC makes me think that a MyRisk bolus WILL come through. They aren't allowing for that in their financial guidance, and it will likely bring final results somewhere above revised guidance. Unrestricted availability of MyRisk is likely to come too late in Q3 for actual results to be spectacular in the next CC, but the rate will be visible (and possibly inflated by that bolus). Given ample evidence that Prolaris will BOTH reduce prostate cancer suffering AND save insurance companies money, their foot-dragging is hard to understand, and thus hard to project a duration for. I wish this was surprising.

  • Reply to

    Looks like Pfizer is buying Hosperia - 15 Billion.

    by mrdtino Feb 5, 2015 7:55 AM
    jacosa jacosa Feb 5, 2015 9:46 AM Flag

    The interesting thing for us is that Hospira has a very short-term pipeline. Their interesting business is biosimilar drugs, the equivalent of generic drugs in the biologic space. It's relatively recent that the rules have become clear, but they're clear now.

    What makes Incyte a difficult acquisition target is that the pipeline is long-term and imaginably game-changing. Sure, there are several players who could afford to pay up, but it makes sense for them to wait for more clinical trials, even if the eventual price doubles.

  • jacosa jacosa Feb 5, 2015 10:13 AM Flag

    Mr Cohen DOES seem to be showing signs of clinical mania. In the latest move, all I can say about Mr Grimshaw is that his part in the messed-up conference call wasn't impressive.

    It would be appropriate, and might be a fiduciary duty, for the BoD to pass a resolution to the effect that the company can not continue in business with the recently-seen level of voting shareholder intervention...and give an ultimatum that most will resign if the present structure continues beyond date X.

    I am reminded of William C Durant and General Motors. The thought isn't pleasant.

  • jacosa jacosa Feb 5, 2015 11:02 AM Flag

    I think Mr Cohen trying to be hands-on is the absolute worst thing for the company. I'd support a management non-advisory fee at this point (pay him to go away). Hell, $10,000 for every month during which he has no contact with officers or board members. A bargain.

  • Reply to

    Myriad met guidance; bull case intact

    by jacosa Feb 4, 2015 4:54 PM
    jacosa jacosa Feb 5, 2015 11:24 AM Flag

    The 5 Jan 35 puts that just crossed is me. Trying to sell 5 more.

  • Reply to

    So, for the last week we traded down

    by anglesm Feb 5, 2015 1:00 PM
    jacosa jacosa Feb 5, 2015 3:18 PM Flag

    I think everyone who cares to look knows the results beforehand, at least well enough to be sure they won't prompt enthusiasm. I just saw the new BoA/ML guy's pre-results review, though, and he misses all of the short-term negatives.

  • Reply to

    Myriad met guidance; bull case intact

    by jacosa Feb 4, 2015 4:54 PM
    jacosa jacosa Feb 5, 2015 4:26 PM Flag

    Nobody at all wants to spend years short a company that keeps growing, whether it's growing quickly or slowly. We don't need new money, we don't need a sudden squeeze (Which is a real possibility come August). We just need that short interest of ~70% of the float to get covered gradually. 37 Days of average volume on the buy side, spread over about 100 days? NAAAAH, won't notice anything. Sure.

  • Reply to

    Myriad met guidance; bull case intact

    by jacosa Feb 4, 2015 4:54 PM
    jacosa jacosa Feb 6, 2015 2:36 AM Flag

    The insurance foot-dragging on Prolaris is worse than I had expected. But I speculate: suppose you were a health insurer, doing a lot of business with a [post Glass-Steagall] bank. Suppose they happened to mention that they had a big short position in a diagnostics company that they needed to reduce. Might this affect the speed with which you approved reimbursement of a test from that diagnostics company? Might gifts "of nominal value" be given? Don't bother pretending that anyone is too moral to act this way. The questions are whether the situation takes that form, and whether there's a chance anyone could get caught.

  • Reply to

    JPM just disclosed 75mm shares in GENE!!

    by jasonsons3 Feb 6, 2015 6:59 AM
    jacosa jacosa Feb 6, 2015 9:48 AM Flag

    I got motivated by all the noise to learn a little about GENE. It's Australian, which always prompts a bit of extra caution. The big JPM stake keeps it from falling into pink sheet trading, so a thorough DD process would look very closely at whether JPM gets extra goodies beyond what's available to a public stockholder. But the single most important issue relative to this board comes from the boilerplate attached to company releases:

    "Genetic Technologies is a molecular diagnostics company that offers predictive testing and assessment tools to help physicians proactively manage women's health. The Company's lead product, BREVAGenplus®, is a clinically validated risk assessment test for non-hereditary breast cancer and is first in its class."

    In other words, it does not compete against Myriad and is in a market that has not really been developed yet.

    Might be of interest to the same people as follow MYGN, but not too similar.

  • Reply to

    Jacosa...thoughts for the week?

    by mrdtino Feb 9, 2015 11:31 AM
    jacosa jacosa Feb 9, 2015 7:00 PM Flag

    Wish I could oblige. Close to home, Incyte numbers will come in pretty much as expected and disappoint most analysts. There will be demands for HH's scalp because he didn't devote 2 slides and a screaming fit at the JPM conference to re-emphasizing that pharmacies had loaded up on Jakafi before the last price hike. Globally, the Germans look like they're really going to force Greece off the Euro (which figures to cause economic catastrophe all through Europe, Germany most definitely included--that'll teach those irresponsible Greeks).

    Simply by maintaining the same Ruxo usage ramp that disappoints analysts in February, Incyte will surprise to the upside in May, rewarding us and justifying continued employment of the analysts. Neither a functioning European economy nor vigorous US growth are critical to Incyte's near-term prospects (and in fact, a credible threat of deflation will keep interest rates low) Pardon me, I saw my shadow a couple days ago and am predicting 6 more weeks of idiocy.

  • Reply to

    Earnings Call

    by mrdtino Feb 12, 2015 8:56 AM
    jacosa jacosa Feb 12, 2015 12:10 PM Flag

    I'm sick, so a lot of it probably went past me. It appears from market action that even though the sell-side analysts missed the Jakafi stocking weirdness, the portfolio runners were allowing for it. On that topic, note that estimated inventory in pharmacies is now below target. Near as I can tell, the next schedulable material event remains read-outs on Bari studies. The little explanation of how an exploratory phase 2 works was precious, and illustrates why they can't be scheduled.

    Interest in alopecia areata was palpable. The interesting business side of that would be if Ruxo ointment works. A distinct dosage form could be priced for the market. In addition, Ruxo ointment is in limbo as a treatment for psoriasis (Lilly owns the right to sell Ruxo PILLS for psoriasis. Incyte would be stupid to antagonize Lilly.) there was a p2, and other things being equal the results would have merited follow-up.

    Sounded like they expect to have to replenish Ruxo API stocks next year, for the first time. Not a material expense (well, in the financial sense).

  • jacosa jacosa Feb 13, 2015 9:50 AM Flag

    I just came back briefly to learn what caused the dramatic move and see this: " The FDA does not negotiate."

    Huh? They negotiate, and the results can be critical for a small company. Whence SPAs? Whence accelerated consideration? Do you need more than one phase 3 (or maybe none)?

    I watched a company destroy itself when a loudmouth CEO announced what the FDA was going to do (during the ensuing extra p3 an alternative therapy captured the market). I'm now watching a company prosper in part because of excellent relations with FDA. They have flexibility, the range of their flexibility is meaningful, and the surest way to get the toughest treatment is to pretend to speak for them.

  • Hey, it's Zack's, so the bar is pretty low. But it seems to give a decent summary of the current situation regarding Incyte.

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