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Tessera Technologies Inc. Message Board

jacosa 97 posts  |  Last Activity: Jul 25, 2015 1:30 PM Member since: Jan 24, 2000
  • http://www.cnbc.com/id/102710786

    Basically the same content as Myriad's takedown of public variant databases, but never saying that Myriad has a validated proprietary database, and with an exhortation to use only testers who contribute to public databases. Sorry, I'd like to know whether to go for the lumpectomy or the double mastectomy...sometime while it makes a difference.

    Maybe Myriad investor relations ought to plant some articles about investing in currency futures.

  • Reply to

    New guy at BoA/ML

    by jacosa May 29, 2015 1:10 PM
    jacosa jacosa May 29, 2015 1:52 PM Flag

    I got a capsule bio. He has a very checkered past. Just about every gang affiliation you could think of (Wachovia, Deutche, etc etc) over the last N years (hmmm, roughly since the meltdown) but before that he was a minor star in drug R&D. Probably drinking buddy of most of Incyte's top management from professional meetings past.

  • I admit it, I was in love with Rachael McMinn. When she entered a convent (or investment boutique or whatever) I was devastated. Derek DeBruyn was simply no replacement. He seemed to lack insider background sources, his analysis looked mechanical and he just didn't GET Incyte. Latest research report from BoA/ML is signed by Ying Huang, and he [or she; I don't know yet] has done a super job on a first report. Still pretending to do probability-weighted DCF valuation, rather than Black-Scholes, but I think that's required boilerplate. At least there's a single WACC used for all programs. Obviously did the homework on programs. I would have liked a bit more personality [there are things you could say about diabetic nephropathy and about CML]. Anyway, I'm comforted.

  • jacosa jacosa May 29, 2015 10:41 AM Flag

    It isn't moving anything up, at least for those who have been paying attention (we're talking an almost-purely institutional stock, remember). EVERYTHING hinges on preservation of joint structure, and these trials don't address that. The one thing that may be new-ish is that they will get to brag about the superiority of Bari's AE profile to Xeljanz's.

    Would it mean anything to anyone if Lilly announced a proprietary name for Bari? I don't think they will, but some people might take that as a sign of confidence.

  • jacosa jacosa May 29, 2015 1:22 AM Flag

    Doesn't look like anything special. We already have toplines on the first 2 p3s, and more detail will be presented at EULAR (probably in conjunction with journal publications). These companies both have a reputation for being able to keep secrets, so I don't expect anything beyond "two remaining trials have passed the dates for futility evaluation, and are continuing" concerning the more important p3s.

  • jacosa by jacosa May 27, 2015 11:46 AM Flag

    To help shorts, this had to run before Myriad's podium presentation on myRisk at ASCO, which figures to address the issue raised...well, for ONE panel test, anyway.

    Researchers oppose unvalidated gene panel tests for cancer links
    Reuters By Julie Steenhuysen
    3 hours ago
    
    By Julie Steenhuysen

    CHICAGO (Reuters) - A group of international researchers is making the case that genetic tests that look for multiple hereditary genes suspected of being linked to breast cancer should not be offered until they are proven to be valid and useful in clinical practice.

    Such tests, made by several companies including Myriad Genetics Inc, Ambry Genetics, Invitae and Illumina Inc, cover up to 100 inherited cancer genes, including more than 20 for breast cancer...
    --------------------
    And for you-know-who: staying clear of shi^H^H^Hstuff like this is part of why you don't go DTC until you have your professional ducks in a row.

  • jacosa jacosa May 26, 2015 7:40 PM Flag

    That's only big if there's lively trading already, and a chance of meaningful performance gains. By historical standards, EZPW trading has been slow recently With the Nth reorganization happening, the risk of pressure to cover quickly looks small. There were about 4MM shares shorted within a 2-week span about a year ago, and short interest has fluctuated since. There has been net covering lately..

  • The podium presentation on myChoice HRD at ASCO suggests that in the recent past Myriad management anticipated a US launch around now. Like Prolaris, this test requires a sample of tumor tissue, so the market is pretty well defined. What is fairly likely to get press coverage is that the HRD signal is dramatically not specific to breast cancer. I don't know what to make of the near-absence of myChoice from the web site.

    There will also be a podium presentation on myRisk. ASCO is a high impact meeting, so there should be an acceleration of prescribing in the aftermath. This is part of the reason integration of the new testing machinery into the Myriad LIMS was time-critical.

    And of course, the decision that ultimately controls Medicare coverage of Prolaris is due in the next month. Rejection is pretty much inconceivable, but the language around what kinds of cancers the test is approvable for will be important (I expect the guidance to be very conservative to begin with. The boundary to look for is between involvement of both lobes of the prostate and involvement of the seminal vesicles also. If they specify in terms of Gleason score, the boundary to look for is between 3 and 4. Since part of the case for Prolaris is that Gleason Score is unreliable, limiting prescribing based on that number would be a negative.) Firmness of language is also significant. Gentler language permits independent investigation of the test's value in near-boundary disease.

  • Reply to

    Maddie, what's in for this week ..Ur Prediction

    by bonkenx May 11, 2015 12:23 AM
    jacosa jacosa May 20, 2015 8:20 PM Flag

    I missed this post somehow. I don't think structure IMPROVEMENT is the target, but structure PRESERVATION. Whatever, Joint structure wasn't a primary endpoint in the Tofa trials and that caused a lot of trouble. I agree that Incyte investors were spoiled by the rapid approvals of Ruxo with both an FDA blessed protocol and orphan designation. But the whole point of the pivotal trials program is to generate a compelling submission package. We pretty well KNOW that the softer parts of the clinical response are going to be super. Since TNF acts largely through JAK-mediated pathways (and other inflammatory pathways are also damped by JAK inhibition), there's every reason to hope for structural protection comparable to the anti-TNFs. And that'll be out before drug approval. and called out on the label. In addition, Bari has a humongous therapeutic index (spectacularly unlike Tofa). I expect the sell-in to be rapid. This isn't some subtly different me-too drug.

  • Reply to

    Sep 80 calls

    by soozanie May 18, 2015 11:42 AM
    jacosa jacosa May 18, 2015 2:00 PM Flag

    Ok, just kicking this around. Normally, I HATE buying time value; the term is "wasting asset." But I see some points in favor of this. Obviously, the transaction is open to the upside, which is nice with Incyte. And it closes before the projected fireworks around November (I want freedom of action come November). Nothing foreseeable threatens to make those options die worthless, and that's a comfort. A hostile offer could blow INCY past the top limit of any hedged strategy (and I think we differ on estimating likelihood of that). I don't see any other event likely to put INCY above 120 by late Sept, though, and there are less risky ways to capture that much upside. And even if I was hell-for-leather bullish, the $90 strike doesn't list with terribly much more time value, and [since a transaction this big had to be negotiated] you could easily have gotten a decent share of the time premium back through greater liquidity.

    Basically, I'll give you credit for making a transaction that fits a high [say 30%] likelihood of an offer without being dependent on it. I just wouldn't figure the odds that way.

  • Reply to

    huge short interest drop

    by maddison3 May 18, 2015 10:52 AM
    jacosa jacosa May 18, 2015 1:24 PM Flag

    Definitely IS something to note. And either way it's part of a developing picture that we'll want to keep returning to.

  • Reply to

    huge short interest drop

    by maddison3 May 18, 2015 10:52 AM
    jacosa jacosa May 18, 2015 12:20 PM Flag

    Historically, most of the short interest in INCY has been connected with the convertible bonds. So I'll speculate that this has some connection with financing activities.

  • Reply to

    Trigger for a Buyout

    by centquatre2015 May 15, 2015 2:29 PM
    jacosa jacosa May 16, 2015 1:11 AM Flag

    $40bln isn't the easiest thing in the world to rustle up. And anyway, that probably wouldn't be enough to get management endorsement.

  • Reply to

    ML note "firing on all cylinders"

    by soozanie May 15, 2015 10:42 AM
    jacosa jacosa May 15, 2015 11:16 AM Flag

    Interesting item in that note: Ruxo ointment for immune alopecia to be tried this year. There's a little gimmick: development of Ruxo ointment for psoriasis was halted back when because it messed up the immune drug = Bari means Lilly equation. Results had been fairly good. (Ruxo penetrates skin a lot better than Bari). If the ointment reaches market, it has good off-label potential for psoriasis. Lilly IS looking at Bari pills for psoriasis, but RA has to come first.

  • Reply to

    Abstracts

    by bonkenx May 15, 2015 9:52 AM
    jacosa jacosa May 15, 2015 10:22 AM Flag

    I read the titles last week, and that's what it looked like we'd get.

  • Reply to

    A blast from the past

    by jacosa May 11, 2015 2:50 AM
    jacosa jacosa May 14, 2015 5:22 PM Flag

    Such things have happened. But usually in a 'corner' situation. The supply and demand situation would still tend to be good for TROU (think of the purest case: company sells new stock to the shorts in a negotiated secondary. That's a 50% capital infusion effectively without dilution.) In a less pure case, the money ends up in the hands of Myriad bulls. They'd be inclined to replenish depleted positions, just not as quickly as shorts with the market running against them.

  • jacosa jacosa May 14, 2015 5:05 PM Flag

    Hey. I'm delighted. But 2 years ago I was reading the vibe in shareholder presentations as management wanting desperately to stay independent, to the point that it'd take $220 a share to get wholehearted support from them. I Think that with the stock on the order of 4x as high, the happy buyout price has roughly doubled.

    I'm probably too optimistic--I expect Bari to preserve joint structure, and to be the biggest new drug introduction EVER in about 18 months. I expect something that can be called success from Janus 1, and that should open a market as big as Jakafi has now, total--even if it just lets people die about the same time with less unpleasantness along the way (and I expect better things than that). Don't bother offering me a 100% premium to the present stock price; we'll have that soon enough organically.

    We may be seeing a bit of a game of chicken. Journalists paid by people who don't want to make the FIRST bid for Incite making noises to rush someone else into making the first bid.

    I'd like to see management come up with a mildly dilutive split: say 2 shares and half a right per share.

  • jacosa jacosa May 14, 2015 2:10 PM Flag

    Still, nothing addressing the magnitude of the premium needed to do a friendly deal. Basically, that comes down to the expected success rate of pipeline candidates. I actually think that dark pipeline is being revealed at a rate to maintain the gap.

    DO listen to the BoA/ML presentation. While the stuff on the ASCO abstracts isn't terribly stirring, there were some nuggets. Most interesting is that Incyte's 30% contribution toward Bari development for RA ends with the year. That is a BIG R&D item going away. Also interesting: first read from Lilly on Bari vs diabetic nephropathy is expected late Fall. Let's put just a 25% chance on anything at all encouraging. But because the condition is common, costly to manage, and has shrugged off so many drug candidates. the potential is worth keeping in mind.

  • Reply to

    A blast from the past

    by jacosa May 11, 2015 2:50 AM
    jacosa jacosa May 12, 2015 11:32 AM Flag

    One more piece of the story: my personal proxy for health care stocks at large is the closed-end fund HQL (which has recently changed its name, but kept the symbol)(top 3 holdings Celgene, Gilead and Vertex). If you look at a 5-year chart, it has had a magnificent run, but presently looks kinda toppy. Holders of a very large hedge with something resembling HQL on the long side and Myriad on the short side might easily be thinking about unwinding even if Myriad didn't look as good as it does going forward.

  • Reply to

    A blast from the past

    by jacosa May 11, 2015 2:50 AM
    jacosa jacosa May 11, 2015 4:03 PM Flag

    Naked shorting (the bad name is stock watering) is, of course, against the law. It happens, but this would be too visible. In any event, nominal float + short interest comes close enough to apparent float to rule out a large rate of naked shorting. Anyway, borrowing stock in a swap against treasuries is inexpensive enough (I'm weak on nomenclature of derivatives; I'd call it a double repo if left to my own devices, but it's probably a term swap or some such. A puts up bonds, B puts up stock, each takes ownership of what the other puts up. There are fees paid depending on bond interest vs dividend and other considerations. Collateral is put up if the deal goes too out of balance. The deal expires on date X and needs to be re-done then)

    Most likely, the shorts on Myriad are mostly part of "unrelated hedges" ('unrelated' is a term of art here; it just means not the same company) Presuming that the long side of the hedge was biomedical it has probably done well enough to make the total positions profitable, but being short a company with big question marks ahead of it is very different from being short one with a new principal product hitting its stride and bright prospects ahead. If you concede market-matching performance for Myriad going forward, it is too expensive to keep it on the short side of a hedge (and its service rather than product nature makes it a poor representative of the industry you want a weak member of). I am not aware of any tax reason to short "against the box" for longer than a quarter.

    Even li'l ol' I have partially liquidated a hedge to get out when one side turned bad (sold part of the stock covered by calls to buy back the in=the-money calls).Sometimes you just have to re-mobilize the dead money in a too-hedged position.

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