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Incyte Corporation Message Board

jacosa 105 posts  |  Last Activity: 10 hours ago Member since: Jan 24, 2000
  • Reply to

    And if this new startup offers the brca

    by lakeside63a Apr 21, 2015 8:57 PM
    jacosa jacosa Apr 23, 2015 10:01 AM Flag

    I wrote a long reply, but apparently fell asleep before posting it, and frankly it was a little too rude. I checked the NIH web site and the BRCA1 Wikipedia entry. It is not even close to true that dangerous BRCA mutations are exclusive to Jewish families--give quotes if you choose to dispute that (It appears likely that AJ's BRCA1 mutation came from Dutch ancestors). The variants of unknown significance tend to be relatively recent (which is why they are uncommon) and of lower threat than the spectacular ones (so the family pattern wouldn't be obvious).

    In any event, the issue is now 15-25 genes considered worth testing for (and evaluating), not just 2.

    A test for genetic cancer risk and a test for the presence of cancer are different things. The most obvious example of why the latter doesn't replace the former is that someone choosing treatment for a known cancer benefits from knowing whether it is hereditary or sporadic.

  • Reply to

    And if this new startup offers the brca

    by lakeside63a Apr 21, 2015 8:57 PM
    jacosa jacosa Apr 22, 2015 4:42 PM Flag

    “Everything should be made as simple as possible, but no simpler”

    You're trying to make this simpler than possible. Many easily classified variants in BRCA are in fact old and well-seasoned. But the stuff of present argument, the variants of unknown significance, tend to be more recent mutations, or old mutations with small recent changes to them. And of course, for other oncogenes there is less history available.

    The questions addressed are important: lumpectomy or bilateral mastectomy? Colonoscopy every 10 years or every other year?

  • Reply to

    Shorts fail again

    by jacosa Apr 22, 2015 12:06 PM
    jacosa jacosa Apr 22, 2015 2:00 PM Flag

    I know I shouldn't do this...

    And so far they're around $200MM in the hole, and that stink might not be from Myriad.

  • I admit to a cruel streak.

    The core short position is about 30MM shares. It was put on over a fairly short period around the Supreme Court decision that a patent on a human gene is not valid. The stock price at that time was in the $25-30 range; I use $28 as a plausible number. At the time, there was talk comparing Myriad to a drug company whose sole product went off patent. This was, even then, clearly a bad analogy. The number of professional bears is fairly small, and most of them are very bright--easily bright enough not to commit decent fractions of a billion dollars on a shaky analogy. There aren't enough small shorts to add up to a large fraction of $1bln. I conclude that a small number (one is possible, but no more than say 5) of large players have that core short position--and they're hurting, to the tune of about 25%. That small a group can work as a team.

    These people MUST cover. If not in fear of the move I predict for late Summer, then at least in the face of the 7% average annual appreciation of the market as a whole. They would LIKE to cover at $28 or below, for no or minimal loss. It is not enough for them to push the price of MYGN down (well, it may cut their Maalox consumption); the price has to stay down for a substantial amount of stock to cross. The GS downgrade failed miserably at that. I don't know whether to call the present flap a press release or a planted news story, the difference is subtle; but a couple hundred shares crossed at $32 and the price drop is not persisting.

    I don't hate shorts; they're some of the most entertaining people in investing. I've taken that side in a small way a few times. But I can't cheer for them when my money is on the other side.

    And by the way: I think my writing style is recognizable. No sock puppets.

  • Reply to

    And if this new startup offers the brca

    by lakeside63a Apr 21, 2015 8:57 PM
    jacosa jacosa Apr 22, 2015 10:22 AM Flag

    "Anyone" can do a test and determine whether you do or don't have the "consensus sequence" of the BRCA genes. If you have the consensus sequence, that's good enough. But these are big stretches of DNA, and differences from the consensus sequence are common (realistically, more common than the full consensus sequence). What differences ought to cause concern? THAT is what Myriad can do better than anyone else and better than anyone else is likely to do, well, ever. UNLESS, of course, Myriad's database is seized. And that's more a question of seized legally than of stolen, because if I do gene tests and have Myriad's database to interpret variants, the only way I can justify being paid extra is if I can SAY that I have the Myriad database--which I can't if it's stolen property.

    Why won't big guys like Quest and Labcorp generate a database just as good over time? Well, you've certainly had medical tests done by them. Did they come back to you periodically and check how you are? Of course not. That isn't the way they do business. But that's the way Myriad does business, and it's the way a variants database gets built up. Unless medical testing companies recreate a little Myriad in-house (which will do guess what to their pricing) they won't build the database.

    It is probably politically impossible for the US Government to seize Myriad's database, no matter how bitter a campaign is mounted. It might be possible, though, for them to require a copy of every oncogene sequence generated going forward. And The Census Bureau is very good at follow-up. In that case, the database would be built to match Myriad's in a few years. Somehow, though, I don't see that happening either (show of hands: does the government have a right to your genetic sequence?).

  • Reply to

    PDF Presentation

    by soozanie Apr 21, 2015 1:46 PM
    jacosa jacosa Apr 21, 2015 4:26 PM Flag

    Possible, but last week the friendly price was probably over $250. Today? I don't care to speculate. Still under $400, though, so I'd just as soon keep riding.

    It IS closer. The friendly price was probably around $200 when the stock was $35.

  • Reply to

    PDF Presentation

    by soozanie Apr 21, 2015 1:46 PM
    jacosa jacosa Apr 21, 2015 3:39 PM Flag

    At this point, I could suggest some drug trials that anyone who would even consider taking a $150 offer might be enrolled in.

    A cash settlement of remaining Jakavi milestones might be possible, and would be about the right size. Or some portion of Bari royalties might be sold back to Lilly.

  • Reply to

    Carrot in latest bear attack

    by jacosa Apr 21, 2015 10:47 AM
    jacosa jacosa Apr 21, 2015 12:16 PM Flag

    This is the last time I will reply to you, for the obvious reason.

    The short squeeze hits in August. That has been my call for a long time. I was temporarily mistaken about shorts making an orderly withdrawal because I was following days to cover rather than shares short: the shorts are holding firm [we'll see if they cover significantly on this pullback] while trading volume rose. If they wait until CMS announces reimbursement for substantial use of Prolaris in June, we'll see $50+.

    ITMN was neither my only nor my biggest good call, but this situation has something in common with it: the event I'm counting on is very nearly inevitable. The risk of holding a short position for a very long time is excessive. When it becomes evident that Myriad will not fail entirely and likely that the stock will rise for several years, the shorts must cover. (for ITMN, it was guaranteed that their drug would become approvable if a trial with an 80+% chance of success, based on abundant experience, succeeded).

    Free for nothing: INCY, if it remains independent, will at least quadruple by 2020.

  • Today's [too obviously planted] stories about a paradise of cheap genetic testing have an interesting feature: the proposed shared, curated database of gene variants would have a membership fee, and perhaps a per-use fee. Multiply the floated numbers by 10 (since Myriad has at least 10x the data of everybody else) and you get numbers that start to be interesting. You can read the apparent declaration of war as containing a proposed [still lowballed] peace settlement.

    If I was Mr Myriad, I might be inclined to make a [public] counter-offer along those lines. Say 30% of gross testing fees and you send at least 30% of your detailers per year to our training program, and we'll do your interpretation for genes we cover.

  • jacosa jacosa Apr 21, 2015 9:30 AM Flag

    Just wanted to isolate one theme: several of those drug combination results were in the "This sh.t just doesn't happen" range. Clinical results are NEVER as good as the models, but entire drug families grow out of results that good.

  • Reply to

    newt, you are really pumping hard on this

    by netprophecy2 Apr 20, 2015 11:16 AM
    jacosa jacosa Apr 21, 2015 9:17 AM Flag

    And in case there was any question about the buying of journalists...

    The other testing companies negotiated away the possibility of using anti-trust law to seize Myriad's databases. Today, we see multiple news stories promising a paradise of cheap and accurate genetic testing if only Myriad "shares" its data on the same basis as those who have nothing to share.

    As a Leftist, I feel strange defending collection of monopoly rents (that is, letting the owner of a unique data collection charge more than a nominal price for its use), but this monopoly was obtained legally, even ethically. If Labcorp, Quest, The French Government and a bunch of people I'd probably like in California want it, let them offer a realistic price. I live in one of the cities that had a bitter eminent domain battle this century. In the US, there is a very high barrier against government seizure of private property for the benefit of other private parties.

    Myriad is pretty high up the list of hated companies. We're gonna be more hated.

  • jacosa jacosa Apr 20, 2015 9:51 PM Flag

    I hope they warned key people what was coming, but from the small number of questions I'm guessing not. No way would I have called that an investor presentation.

    Very impressive technical presentation indeed. I had an internet burp near the end and missed some of the talk about how they'll go forward, but I'd guess that priority will go to the fastest likely paths to market. AML, while rare, has subtypes that have horrible prognosis. Second-line AML is probably licensable based on a very good p2. Myeloma is more common (still rare) and generally has a fairly benign prognosis today, but the treatments are brutal (to get decent 5-year survival, lethal marrow ablation with stem cell rescue is pretty much mandatory). There's a good patient organization which might be helpful. Long survival with periodic relapses is a good pattern for supplying trial subjects, but not so good for generating dramatic results. Still, probably fairly fast to market.

    But more than ever, I see a huge clinical trial program that will be difficult to support with the income I can see. Since the company is heading toward a cancer focus, maybe sell its piece of the Baricitinib business--in installments, to avoid having unusable amounts of cash on hand.

  • Reply to

    newt, you are really pumping hard on this

    by netprophecy2 Apr 20, 2015 11:16 AM
    jacosa jacosa Apr 20, 2015 3:54 PM Flag

    A short position in a non-dividend-paying stock is inexpensive to maintain in a cash flow sense (If you add a random-walk component to the cost, it looks a lot worse). The core short position has remained fairly constant for a while. It seems to have been established at around a $28 share price. In effect, the random walk part of the cost of holding the position has been realized.

    It is much less risky and expensive to buy financial journalists than to stage bear operations.

  • Reply to

    I just learned not to sell INCY covered CALL..

    by bonkenx Apr 20, 2015 12:09 PM
    jacosa jacosa Apr 20, 2015 1:44 PM Flag

    For about the past year, Incyte has gone up too fast for an optimal covered call strategy. Frankly, it's been unbelievable. But when you're overexposed, it's still a useful choice. One important part of the strategy, though, is that when a short call is more than $10 in the money you have to do something about it. I'm clearly overexposed, with about 2/3 of my discretionary funds in Incyte. Recently, I bought back one batch of calls and paid for the purchase by selling part of the covered stock, and I rolled another batch of calls from Sept to Jan moving up $15 in strike for a $5 debit.

  • Reply to

    4/17 press release

    by jacosa Apr 17, 2015 8:42 AM
    jacosa jacosa Apr 20, 2015 10:00 AM Flag

    First: I misread the summaries. First line use of '110 isn't being de-emphasized, but more dose-finding is being done (this is more often good than bad, cf Baricitinib).

    The PIM inhibitor stuff is pretty new. The PIM kinases are signal switching molecules affected by (and affecting) the JAK/STAT system [and others]. Loss of PIM regulation is often seen just as pre-cancerous cells become cancerous. PIM kinase function is not absolutely needed for survival of mice, so on the one hand, selective drugs ought to have manageable toxicity, but on the other hand tumors are likely to be able to evolve escape pathways around the drugs [I'd pay for a year of good health, even if it was only one].

  • Reply to

    IMAX China IPO

    by gharabe Apr 16, 2015 11:11 AM
    jacosa jacosa Apr 19, 2015 11:52 AM Flag

    I think people are heartily sick of hearing about deals for future Chinese installs that materialize late, or never.

  • Nice deke by management. They had us looking at ASCO. Then again, pretty much nobody expected much so soon from the combo trials.

    What do You think it means that they're expanding the trial of '110 for second-line against PaCa while dropping plans for first-line? Tea leaves not clear, but someplace in there is the possibility that Ruxo is doing well enough (when tolerated) to bump back '110.

    I hadn't heard of a bromodomain 4 months ago, and now I are a investor in one.

    Guess at why they call the Monday talk 'investor' rather than 'scientific' looking good.

  • Reuters has circulated an expanded version (dated 4/14) of the story that set me off a couple days ago. One guess how many people they found on the "poor people should just die" side of the issue. It lists a couple managed care programs that do panels when appropriate, some that don't and the nasty insurers.

    The article also touches on the VUS problem.

    Also, it says that Myriad has 90% of the hereditary cancer testing market, which suggests that competition has not been ruinous.

  • jacosa jacosa Apr 14, 2015 12:36 PM Flag

    A plausible guess is that the clinical research program is accelerating, and they want a central location for interactions with European project leaders. This would go along with my wild guess yesterday that we're about to be hearing more about the clinical trials roadmap. The preference in Europe for specialized institutes to treat diseases with sufficiently similar features makes it easier to recruit for medium-sized trials Over There. The announced 9000 sq ft is roughly appropriate to accommodate that function and a moderate amount of business activity (say, coordinating product reimbursement activities). It's too small to be a poison pill against Novartis (a laughable idea anyway) and too big to be a simple pied a terre for merger negotiations.

  • Reply to

    Insurance companies practicing medicine

    by jacosa Apr 13, 2015 10:46 AM
    jacosa jacosa Apr 13, 2015 4:37 PM Flag

    Try it again. Refusing to pay for myRisk [and similar] because it may get people to seek excessive medical treatment is only 95% evil. The 5% non-evil should be addressed by making it as easy as possible to turn findings into strongly justified courses of action. Almost for sure, testing company sales training programs are the best presently-available education on the practical significance of the test results. People in public health and counseling professions ought to be offered the same training that testing company sales staff get.

    But the insurance companies ARE being 95% evil.

    More coherent?

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