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InterMune, Inc. Message Board

jacosa 140 posts  |  Last Activity: 7 hours ago Member since: Jan 24, 2000
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  • I think it will grow. Right up until a pharma earns the adjective 'giant,' paying for the p3s that you need to grow remains an issue. Some of the cancer programs might result in substantial sales ahead of p3, but it isn't something to count on. A particularly fast sell-in against PV might solve the problem; again, not something to count on. I think a straightforward stock sale may be the best cash amplifier overall, but I usually think that.

  • The problems of success. I ballpark the price of a p3 trial at $100MM. The Janus-es may be a little cheaper . But There are probably registration pushes coming for the PI3Jdelta drug and the IDO drug, both on Incyte's tab. You really want the money in the bank before you start one of those. Incyte is just turning GAAP profitable (it has been cash flow profitable relative to a normal rate of research for about a year, but research has picked up). Regular bonds are not likely to work yet. Now that management is calling Incyte an oncology company, Bari looks severely non-core, but Incyte's interest in it looks to be worth $5bln+ (maybe very +), which is an inconvenient size for a sale. Maybe more converts? A straight stock offering? Warrants? Suggestions for financing a bolus of R&D solicited.

  • Reply to

    well kids it looks like

    by netprophecy2 Jan 29, 2015 2:43 PM
    jacosa jacosa Jan 29, 2015 9:08 PM Flag

    Fair summary. I think a double in 2 years is plausible. The big issue has been the amount of money bet on the idea that Myriad can't survive. The last refuge of that argument is that excess demand for the new product is a perfectly straightforward issue, and good management ought to be able to deal with it. Well, they're dealing, but it won't be transparently obvious that it HAS been dealt with until May.

  • Reply to

    well kids it looks like

    by netprophecy2 Jan 29, 2015 2:43 PM
    jacosa jacosa Jan 29, 2015 3:54 PM Flag

    Oh, alright. From a "predictable but not appreciated fundamentals" standpoint, we're coming up on a CC that figures to annoy some analysts (at best, new sequencers just delivered so backlog remains excessive; substantial legal expenses). January is ending, and with it the influx of new money into growth stocks. So we're poised for a drop, imaginably even a sharp one ($31.xx wouldn't shock me). But come May, the new machines will be clearing the backlog and legal expenses should be way down. Even the hardest-core shorts will see that Myriad isn't going away. Let's say that they mostly cover by the August CC. That ought to be enough incremental demand to put the stock several points above where it is now. With Prolaris coming along and the CDx market prone to generating buzz (and no legal or regulatory risks in sight), the good bias ought to prevail for a while. I don't use stock for market timing. If the near-term price drop is biggish, I'll probably sell some puts. Disclaimer: I already have calls written against about half my MYGN position; they're generally close to the money and I may roll some or all, leaving me less-than-fully exposed. I like having the farm, and I'm not betting it on one idea, however promising.

  • Reply to

    AFTER THE BELL MORE GOOD NEWS

    by marinshell Jan 28, 2015 5:31 PM
    jacosa jacosa Jan 28, 2015 8:42 PM Flag

    I've been pointing out for a while that management seemed to be trying to get publication of the full RESPONSE readout in a good journal at roughly the same time as the PV rollout. So the good news is that they hit the timing. This makes a rapid sell-in more likely. There's still a problem with holding the price when half or more of sales are directed at an essentially non-life-threatening condition, but a rapid sell-in is a good start.

  • Reply to

    Earnings call is gonna be a disaster

    by hyvest Jan 27, 2015 2:47 PM
    jacosa jacosa Jan 28, 2015 4:36 PM Flag

    You will need a couple years to convince me that this new setup is WORSE for culture and morale than the prior gang (I'm not sure how much of that badness was due to Cohen interfering). There ARE still real pawn guys scattered around the company, and under the jargon I honestly think I hear "We're going to have the good ones teach the newbies, and newbies who don't learn will be out."

    Title loans are just too easy. The crash-by-night guys will keep getting replaced as they fail. Very like gold buying during the frenzy.

  • Reply to

    Lost all patent lawsuits

    by aecooter33 Jan 26, 2015 2:40 PM
    jacosa jacosa Jan 28, 2015 1:22 PM Flag

    Well, University of Utah has. Myriad's interest is a little different, and they're winning the big ones. The settlements to date require abandonment of efforts to collect anti-trust damages from Myriad or to force disclosure of Myriad's database of gene variants.

  • Reply to

    Aaron of Moron

    by mrdtino Jan 27, 2015 10:03 PM
    jacosa jacosa Jan 28, 2015 1:00 PM Flag

    But please don't feed the troll. We don't know yet what it is, but total responses are the whole payoff for the tweenies, and the basis of payment for a lot of the boiler stokers.

  • Reply to

    Earnings call is gonna be a disaster

    by hyvest Jan 27, 2015 2:47 PM
    jacosa jacosa Jan 28, 2015 12:53 PM Flag

    Title lending is a race to the very bottom. General pawn gives you some room to be different from the other guy, and to move merchandise from one place to another.

  • Reply to

    unreal

    by iknowwhatyoudontwanttoknow Jan 27, 2015 6:09 PM
    jacosa jacosa Jan 28, 2015 12:47 PM Flag

    I'm not at all sure that the sketchy presentation was an accident. If I was good at both acting and managing (and I am, although not at that high a level), and I wanted to put the best possible face on a turnaround, to get the portfolio runners on board, THAT is the meeting I'd run. Next meeting the tone would be similar, but the seams in delivering numbers would be covered up (if necessary, simply by saying that we didn't choose to go into that level of detail). In six months? Joseph Rotunda with a higher-pitched voice. [The CEO and CFO have enough actual work to do so that a week preparing for every single CC would be a waste, but going that far for the critical ones is worth at least 5% on the stock price)

    They still have one more quarter to blame the mess on the previous team, but after that it's Jerry Maguire time.

  • Reply to

    The big clean up has started

    by bridgejumper08 Jan 28, 2015 8:59 AM
    jacosa jacosa Jan 28, 2015 12:23 PM Flag

    What we're learning is that the company had gotten into worse shape than we had thought. The MBA-speak was very much less apparent than at previous presentations by this team. I'm less than certain that it's a good idea to be increasing store count at this stage of the re-indoctrination of the customer-contact staff.

  • jacosa jacosa Jan 26, 2015 4:50 PM Flag

    You have the problem identified exactly: WE'D like to see them battle it out, but nobody wants to start a bidding war that might result in a competitor getting the goodies. Presently, I'd guestimate the price at which an offer for INCY wouldn't attract a counter-offer as a bit over $160 a share, which is awfully high. And even at that price, if the deal isn't EXTREMELY friendly, there's substantial risk of losing key players from the drug discovery team.

    Before the drug world went nuts over checkpoint inhibitors, I think top management chewed on binkies with $220 written on them. Now, I wouldn't be surprised if some of them want 400 or more rubber duckies in the bath. (The choice of imagery is based on Lawrence Mcdonald's portrait of a [doomed] bank at work)

  • Reply to

    June 90 call

    by soozanie Jan 23, 2015 6:12 PM
    jacosa jacosa Jan 25, 2015 3:48 PM Flag

    I just looked at the last two Junes. 2014 Was a 20% gain, but 2013 was flat.

    I've said before that I HATE buying time value, like selling it and am receptive to spread ideas that mostly cancel it.

    What I'm wondering is if perhaps this is one leg of a complex transaction with the other leg[s] less visible. Maybe the other side is short sector fund [options?] on other things that experience a January effect? [something like Russell 2000] Or it could be part of a REALLY complex derivative on Incyte converts.

  • Reply to

    Sell it and run?

    by gamma05conquest Jan 22, 2015 2:21 PM
    jacosa jacosa Jan 24, 2015 1:16 PM Flag

    I think we'll see the rise in oil prices coming a mile away. It may be a while off, depending on what's REALLY causing it (European depression or Saudi economic war against IS could last a long time; manipulation against shale MLPs or against the "ghost tanker fleet" could be a lot quicker.) I'm more concerned with management getting swelled heads and making dumb [especially self-] deals. I'm staying for now.

    Those who want to get out early may want to look at the extraordinarily over-shorted medical testing company Myriad, with a time horizon of early Autumn.

  • Reply to

    Ok...it happened

    by dr_breckenridge Jan 23, 2015 11:37 AM
    jacosa jacosa Jan 24, 2015 12:31 PM Flag

    One of my favorite bits of market advice:

    J.P. Morgan once had a friend who was so worried about his stock holdings that he could not sleep at night. The friend asked, 'What should I do about my stocks?' Morgan replied, 'Sell down to your sleeping point' Every investor must decide the trade-off he or she is willing to make between eating well and sleeping well. High investment rewards can only be achieved at the cost of substantial risk-taking. So what is your sleeping point? Finding the answer to this question is one of the most important investment steps you must take.

    -- Burton Malkiel

  • Reply to

    Nice that $25 mil. will be recorded in Q1 2015

    by bonkenx Jan 23, 2015 12:07 PM
    jacosa jacosa Jan 23, 2015 12:25 PM Flag

    I was wondering. Sometimes accounting can be a contact sport.

    This (together with last year's inventory stocking and the expected course of the PV sell-in) sets up a hellacious boost for May. That's also a plausible time for some first reads on combination therapies [paraphrase: we call it research because we don't know what we'll find] (but we can hope for good results). Anyway, the expected April-August doldrums may be altered this year.

  • jacosa jacosa Jan 22, 2015 11:09 AM Flag

    With a CC approaching that can probably be spun as showing ineffective management (they STILL won't be clearing the backlog), there isn't a RUSH to cover shorts, but the May CC figures to be unequivocally good. That's a limited time to get out of a very dangerous position.

  • Reply to

    Somebody come and take us $150 works

    by ch3howard Jan 21, 2015 6:52 AM
    jacosa jacosa Jan 21, 2015 10:29 AM Flag

    It probably would work, too. But that's $25bln+ for a company that it's a stretch to value at $15bln based on existing product [no s]. Also, at that price the old timers inside the company might well feel grumpy and stalk off. The pipeline is valuable, but the organization that generated the pipeline is beyond value.

  • jacosa jacosa Jan 21, 2015 10:17 AM Flag

    Well, except that you may be overestimating bond yields.

  • Reply to

    JPM Conference

    by jacosa Jan 12, 2015 12:30 PM
    jacosa jacosa Jan 20, 2015 4:37 PM Flag

    Adam Feuerstein actually had a worthwhile remark toward the end of one of his reports from JPM:

    " Let's stop wasting everyone's time by stipulating now that all cancer immunotherapy drugs will be tested in combination with each other. Don't bug us until you have actual clinical data to report."

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