You're buying into a common fallacy. Yeah, companies with tiny net earnings show huge P/Es. You can't take them at face value. You have to make plausible GUESSES at what the business will look like in some future snapshot to assign a value. And I admit that this isn't what Benjamin Graham would call 'investing.' Plausibly, Volcano has at least its present market share of intravascular sensing done in conjunction with a majority of invasive catheter procedures, with cardiac PCIs at least as common as the historical rate. And by that time, the cost structure is better, too.
Of course, one can't assign 100% probability to perfection, but it doesn't take an unreasonably high probability to put a floor under the stock price well above $10.
I'm no expert either. I expect INCY to stay between $19.90 and $25.20 until significant news comes out. Possible significant events before YE would be any kind of success in RECAP, actual buzz about marrow structure in Jakafi patients or happy talk about results with bari vs nephropathy. In deference to Dr Paul's enthusiasm, maybe something about the IDO inhibitor. To be fair, another rare opportunistic infection associated with Jakafi could cost a couple of bucks.
Management said nothing new that I picked up on.
As stated, I'd LOVE to hear the voices. I've heard that there were technical problems: did that reduce the number of analysts participating, or is our company becoming uninteresting?
No way? The simple way would be for PCIs to return to a "normal" rate in the US. That would produce a satisfactory (if equally as accidental as the decline) bump in Volcano revenues. Since fixed costs are a little high, that would artificially improve gross margin and make some analysts happy. The drift away from stenting for stable angina seems contrary to the usual American "Do it and get it over with" attitude.
A little more complex (and probably more than a quarter off) is acceptance of IFR in the acute care setting. The apparent inevitability of that eventually happening ought to create a floor under the stock price, and I'd put it about at the present level.
Company is suffering from dropping rate of "elective" PCI heart procedures. That goes against natural trends. Meanwhile, company is holding share, with some gains at the edges. I don't see a case for further drops.
I suspect the big issue is that it's easier to estimate the total cost of the pivotal trial than to guess how much will be spent on it when.
If you've read a bunch of my posts, you know that I consider 6 months very near term. The working pros are very good at sucking out all the juice over shorter time spans, especially from a highly-institutional issue like Incyte. They chat, they know who feels what way. It doesn't have to be material NPI, shared working knowledge can be enough.
That said, a really good result in the PC trial would shift everything upward. Dr Paul sounded a little less optimistic than usual at BoA, but since he isn't supposed to know anything at all about clinical results (and if you believe that...) it could just be jet lag. He sounded bored by reversal of fibrotic changes in MF, too, and that is going to prompt some chatter. If '110 or its sisters show promise against inflammatory bowel disease, we could get a buck or two on speculation. Success of the RA trials could prompt a move; results there are about a year off. The one thing Dr Friedman sounded enthusiastic about was the IDO inhibitor. I think the overwhelming preference among observers is for drugs that blast cancer themselves, rather than boosting immune responses, but something could come from there by EoY.
And don't confuse me with a real expert. I can follow the biomed stuff after hitting the books. I know how the hands-on guys think and I have lots of investing experience. I guess exposure to FDA behavior from multiple viewpoints is something, I can't see the biomed stuff coming, nor do financial statements speak to me. FDA retains the ability to surprise. And experience??? 1999-2011 was outside anyone's experience. I'm struggling to recall the days when a growing actual business generated returns for owners.
Just listen to it. Dr Paul, hemming and hawing, gives the best explanation I've heard about why you'd want JAK 1 only compounds in your pipeline even if they give you commercial problems with the 1 & 2 mixed inhibitors. Its the one member of the family that you can afford to beat on really hard, and there are some new targets (like IBD) where that option looks potentially useful.
And the suggestion of maybe having a LONG presentation on the whole pipeline? That would eliminate a good deal of the risk of nasty surprise leaks. It would also reassure us that possible conflicts with existing partners had been addressed.
What little I know of Boehringer's drug makes it sound even worse than Esbriet. There MAY be some promise in a combination, particularly because the mechanism's are different. If I recall properly, the attempt to sell the company never got bids remotely into the $50 range; that came in the frenzy between the advisory committee recommendation and the CRL. While the marginal share could have gotten $50+, the whole company wouldn't have. In any event, drug discovery/development is about trying for huge wins and either getting them or failing. Taking the safe money early on is somebody else's way.
Possible price? Let's go for about 30 months out. Reality is slippery but my highest somewhat realistic estimate is well over $100 a share. That depends critically on US reception. Lest I get called a pumper, my lowest somewhat realistic estimate is $ low 20s. (and it was lower than that when tolerability was a bigger question)
The European launch is hard to judge because of Italy and Spain (flatlining governments). The German launch was better than Tracleer, a high standard, despite the IQWiG fiasco.
Stuff has happened. The main reason ITMN won't skyrocket again even on great news is that there have been too many "normal" drug introductions. Even very useful drugs take time (and active selling) to reach potential sales, and investors know it. Of course, the first drug that actually restores function for Alzheimer's disease patients will be different, but that isn't us.
Next likely catalyst for a big move in ITMN is primary completion of ASCEND--about 7 months off. If there are good ex-DE earnings come the next CC, that could be a moderate catalyst.
I've been around a while. With no CC, the earnings date can slide. I don't really mind. Earnings right now don't mean much.
Haven't listened to the 3 hours yet, but I read Derik de Bruin's (BoA/ML) reactions to it. Maybe, maybe. Reminds me a little of the story of why the marketer was childless (every night he told his wife how great sex with him was going to be until they both fell asleep). The business is HERE, and it's pretty nice, and the medium term trends look positive, and in three years the business is supposed to be THERE, and you can't fault them on the market drivers they expect will then make business good. Problem is the chaotic bit between HERE and THERE.
I have to give management top marks for seeing that present products go obsolete eventually. I can't guess whether their vision of the future is the right one, but at least it's plausible (and I always remember Motorola's Iridium, and really, GM's 'copper cooled engine') MAYBE, if analysts on the buy side were afraid that the company would try to run right through the looming mountain, and if they JUST took ongoing legal expenses forever out of their models, the recent run-up might make sense. That is, maybe the recent historic prices were unreasonably low, and we're seeing a return to realistic valuation.
Anyway, it's a story for why Friday was so good, and I guess none of it was the sort of "material non-public information" that people are terrified to even hint at, so there were more likely to have been leaks. So maybe it DOES explain the run-up.
Doesn't seem to capture the action. ET DOES phone home now and then, especially since the flash crash. Somebody [thinks he] has an idea.
I'm particularly concerned that this may be a reaction to the perceived end of gene patent litigation expense. That fight has been going on for what, 30 years? and it isn't likely to end with this case. And there's nothing like a "genius" who has been proved wrong to knock a stock down.
Or maybe someone expecting a spigot to open from Europe on BRACnalysis, or the US on Prolaris? I don't believe in sudden floods of business, myself. Most of the time you need to do a tough selling job. Sometimes big pharma makes it look easier than that because they can quickly piggyback a new product on their [huge] ongoing sales effort. A slow business ramp probably wouldn't annoy buyers as much as a new legal theory for opposing gene patents, but it wouldn't do the stock price any good, either.
Anyone know if maybe Cramer or IBD or something comparable have been touting MYGN?
I seem to be getting labeled as a fanboy because of, well, it's not worth talking about.
Partly to offset that--is anything unexpected happening? I could see a small move because there's a chance that the costly gene patents litigation may end. But 12+%?! (If I replaced the '?' with '@' would that collection of symbols be cursing?) Didn't notice any dramatic developments in 'other' tests, nothing new on companion diagnostics at all and predictions of business changes in the future, which might be positive, but definitely carry risk.
I've tried not to encourage hostility. V's numbered posts go beyond beyond. Please take at least the time to "report abuse" on a few of them (a drop-down from "flag message"). If we can get 1,000 abuse reports in one day somebody might notice.
Listen to the replay; the transcript is never as good.
On the surface, it was very good. Business is picking up and the BCD acquisition is going smoothly--probably better than anticipated. Enough analysts understand (and are coming to sympathize with) "profitable growth" that the tone was less confrontational than I'm used to. A couple of junior analysts were a bit confrontational, but we shouldn't get the sort of 'revenge downgrade' that has happened in the past.
My main concern is the possibility that improved sales are due to a 'sucker rally' among customers. With Europe continuing to seek depression, the US at risk of another dip from The Sequester and the Chinese economy suspect, the buyers just might be wrong. Management seemed aware of this possibility, even though they didn't warn explicitly.
Chengdu is ready to go, for all practical purposes, but mothballed.
It's just barely possible to get investors to pay attention to something happening 18 months in the future. So don't give me 2015. Yeah, they'll be at a disadvantage trying to sell tests they have less experience with--want mustard with your red herring?
For now, the stock-price-moving issue is ongoing legal expenses. Case ends decisively, stock price will be higher by YE. Case finds a way to drag on, who knows?