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InterMune, Inc. Message Board

jacosa 115 posts  |  Last Activity: 4 hours ago Member since: Jan 24, 2000
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  • That guy I try not to respond to directly has outdone himself, suggesting either that Myriad ought to be doing direct-to-consumer promotion for Prolaris or that Myriad ought to be lobbying specialty medical associations [it's hard to tell which; maybe even both] while CMS reimbursement is under consideration. I remember a device company that tried to light a fire under FDA...the extra 6-month delay let competitors get a stranglehold on the market. He ignores how much "objective quality assurance" has taken over medical practice. Order too many [I've heard of that being remarkably few] tests not on "the list" and insurers will drop your practice; maybe you even lose your hospital admitting privileges. Perhaps you can find hundreds of men who will back down their physicians to get Prolaris and then pay for it themselves [actually, that seems to be happening], but until CMS lists it, tens of thousands just aren't imaginable. Also, a medical association endorsement is very unlikely until CMS has acted. And once again we can look to AJ: fear of cancer recently led her to choose a more aggressive procedure than testing suggested [and post-op pathology supported the testing]. Men DON'T clamor in great numbers for the least aggressive management of prostate cancer.

    I mean, his other ideas about what Myriad management ought to be doing are seriously wrong, but this stretches to painfully self-destructive.

  • Reply to

    Orphan Drug Status

    by bfontana May 1, 2015 1:22 PM

    Looked it up. This is the lead phosphoinositol kinase 3 delta inhibitor. Orphan status isn't always a big deal.

  • Doesn't seem to be an enormous amount of anticipation. Management guidance suggests $0.40 earnings. and that's analyst consensus. Lower number would probably bother people, but the sense that we're in the middle of the show means that a beat would have to be substantial (say 45 cents or more) to move the stock up. Any change to the full-year guidance would be a negative (even raising it by a modest amount). Basically, money today isn't the interesting matter.

    MOST interesting matter is myRisk throughput. It'd be nice to have the time-to-report down to 10 days, but that's not realistic. Operating capacity "substantially" greater than at last report is the baseline. All new equipment integrated into the data processing systems and 25% of it in production would be plenty.

    Prolaris is probably next most interesting. Baseline is being given a week in June to expect CMS announcement. Any news on expected scope of reimbursement could be important, but I expect that it will be as anticipated by everyone (low predicted threat cancers), and will be adjusted later based on experience.

    Companion diagnostic business could be interesting, but we probably won't hear much--there is a fair amount being presented about Oleparib at ASCO, and abstracts will be released mid-May.

    It would be surprising to have news about Vectra. The test is a hard sell because it gives an objective measure of something rheumatologists consider themselves pretty good at estimating subjectively. Since I don't expect a major reimbursement decision, I'd prefer not to hear much right now.

  • Reply to

    Market reaction to CC

    by jacosa Apr 30, 2015 12:23 PM
    jacosa jacosa Apr 30, 2015 3:10 PM Flag

    I still make it a Q/Q sales increase corresponding to 38% annually. That has to be discounted for the inventory rebuild, but you can plausibly predict acceleration in PV (we're only barely starting to see the effect of actual selling into that market, and analysts ought to realize that) so it should be fairly representative.

    Anyway, if we're still focused on MPNs a year from now we will have already lost.

  • I'd like to keep the other item for what people thought was notable IN the CC. So I won't comment myself on the reaction in that item.

    I can understand the price drop. Even the general analyst predictions were awfully ambitious, and the whispers seem to have gotten ridiculous.

    There's probably a lot of concern out there that Incyte is following a classic road which leads small, innovative companies to failure. "So many attractive projects; they'll all make money some day, so let's chase them all!!"

    But Incyte is restraining itself, keeping the clinical program growing, but with restraint. Still, with the visible pipeline growing rapidly, new financing is likely to be needed. That's an uncertainty, and uncertainty costs the stock price.

    And also, this was the last opportunity for a positive surprise before ASCO, and there was none. I've said before that I expect ASCO to be negative for the stock price because investors will be reminded that Jakafi has potential competitors.

    I'm still bullish as all getout, but I can sympathize with those who aren't. [~30% CAGR on stock price coming over several years--try to get that from a mutual fund]

  • My usual. With the usual request: keep it to the conference call and substantive matters derived from it.

    I don't like it that a measurable number of bonds were converted. If you break down a convertible bond, it's an ordinary bond combined [inseparably] with a warrant. Conversion suggests dissatisfaction with the bond component. Could just be anticipation of rising mid-term interest rates, but that in itself is something not to like. In any event, it gives the bondholders more freedom to move their investment elsewhere.

    Inventory change as expected, and the fact that EOQ levels were called 'normal' suggests that they could go either way next Q. There seems to have been an expense for Jakavi API supplied to Novartis, suggesting that the stuff on hand is running out, but no definitive statement.

    Discussion about RA trials definitely sounded smug. Could it be that structural protection was seen in studies not intentionally powered to show it? Also, the answer about JAK1-specific drug for RA showed that Incyte has not entirely abandoned inflammation.

    Differential recruitment into Janus 1 over 2 suggests optimism--the futility/slaughter judgement may have happened already, and shown neither (which is a positive).

    Difficulty recruiting lung cancer patients shows that when a field is hot enough, and the rewards available big enough, the pharma giants can take what they want. Not a bad thing, and good to remember.

    R&D is not going to slow, and the description of how you grow sales for PV suggests that line will increase too. May be a while before bottom line turns black for good.

  • Reply to

    Trading today very erratic

    by bonkenx Apr 28, 2015 1:02 PM
    jacosa jacosa Apr 29, 2015 11:32 AM Flag

    I can't see a tender offer lower than $155 getting a majority of shares (it would, of course, attract several other bidders). Shutout hostile offer price is probably around $185. I don't think short-term moves affect the friendly price.

  • Reply to

    Shorts fail again

    by jacosa Apr 22, 2015 12:06 PM
    jacosa jacosa Apr 29, 2015 10:45 AM Flag

    Been thinking about my experience with the endgame at Intermune that someone else brought up. One of the last gasps of the shorts there was a news story reporting some unattributed, but "inside," tweets to the effect that a competitor's product was giving clearly better results in a phase 3 trial. (Well, when the results actually came out, it didn't have the SAME side effects)(Sorry about that sentence--it DOES parse if you work on it). So in the aftermath of yesterday's "earnings tweet" ruckus in an unrelated issue, I'll add that to my list of squirms we can expect from the shorts: 1) Foundation statements that variant significance data should be "freed" 2) Demonstration[s] demanding the same 3) Tweets that suggest Myriad's database is no longer precious.

  • Reply to

    Incyte and Agenus deal

    by ronbbck Apr 28, 2015 6:21 PM
    jacosa jacosa Apr 28, 2015 9:18 PM Flag

    I thought at the time that there were probably some specific pairings of small molecules with biologics of interest on a medium time scale, and there was a perceived likelihood that such pairings would be needed occasionally in the farther future.

    As we see more of Incyte's deep pipeline, my biggest takeaway is that the variety of targets is waaayyy greater than I was guessing at. We may not have heard yet about the small molecule that pairs with the first biologic prospect, but more than ever I think that something specific is going on.

    Giving bonkenx his negative, this IS Incyte acting as if it will remain independent for a long time.

    Other than that, I just think it's another of those projects with a time scale too long for investors to worry about right away.

  • Reply to

    Bank of America raises PO to $120 from $92

    by umcc2012 Apr 27, 2015 8:46 AM
    jacosa jacosa Apr 27, 2015 12:35 PM Flag

    If you read the report, you'll find that it lowers the value attributable to current business but raises the value attributable to clinical and pre-clinical pipeline. Frankly, I think the fear of competition is overdone and that attaching specific value to pipeline is a bad way to do business.

    I'd attach a price generally similar to that $120 to a report with this kind of audience, but it would be based mostly on Jakafi and on being less than a year from Bari commercialization come the target date [Bari acts on the same pathway as the anti-TNFs, which protect joint structure. Every OTHER effect of Bari is as good as an anti-TNF. The study on protection of joint structure has passed the date for futility evaluation. I think it's close enough to the goal to attach a probability of success]. In the text, I'd say that any one of the major pipeline initiatives could add sales equal to those of Jakafi, but they are too uncertain to use as a basis for investment.

  • Reply to

    consolidation

    by soozanie Apr 23, 2015 1:37 PM
    jacosa jacosa Apr 27, 2015 12:12 PM Flag

    Well this MIGHT be a consolidation (near-term bottom around $102), but the sharpness, in the face of upgrades, suggests that portfolio runners entranced by the spectacular pre-clinical data last week are being reminded from above about cash earnings, and timing thereof. We could see $90 [but I still expect $150 or better a year from now]

  • Reply to

    1 in 1000 have a defective brca

    by lakeside63a Apr 24, 2015 11:44 AM
    jacosa jacosa Apr 25, 2015 10:37 AM Flag

    And they spread The Plague, and a dozen of them meet once a month and plan everything that will happen in the world. And Myriad is a Utah company, and they're all Mormons and aren't The Mormons a Lost Tribe of Israel?

  • Reply to

    consolidation

    by soozanie Apr 23, 2015 1:37 PM
    jacosa jacosa Apr 24, 2015 1:29 PM Flag

    Everything is getting complicated. I'm falling back on looking for timing of new cash streams. I honestly think that a passed price increase or three will produce more from the sum of MF and PV than the stated plan, but I don't have the genuine data. The IDO compound, at best, remains just outside my skeptical 18 month to money time frame. Immune alopecia may generate off-label sales, but approval of the indication for Ruxo is unlikely because of toxicity...maybe for another compound. I agree that PaCa should be worth a quick $20 upon assurance of success, but unless Janus 1 is halted for slaughter that is more than 18 months off. I consider the most likely outcome of Janus 1 (say late January) to be a worthwhile increase in survival but an extraordinary reduction in cachexia. That would be enough to generate off-label use, but not to get accelerated consideration of a label expansion. The combination that arrested a model of AML is interesting because Incyte has unique access to worst-prognosis AML patients.

  • Reply to

    consolidation

    by soozanie Apr 23, 2015 1:37 PM
    jacosa jacosa Apr 23, 2015 4:57 PM Flag

    I'm not sure that a couple days of normal behavior after [or in the middle of] an incredible run need a description. I might call a drop to $106- a consolidation.

    I'm sticking with ASCO being more likely to be weak than strong, mostly because the ignorant [read: professional analysts] have forgotten that Incyte has possible competitors. The CC will probably be positive.

    The cancer stuff is genuinely a big deal, but I talk to a certain number of skeptics, and the recurring thread is "what will bring in money over the next 18 months?" I only see 2 big possibilities in the cancer space: in the unlikely event that Janus 1 is halted for slaughter, it would pay on that time scale. And if the drug combination that arrested AML (which I don't think is in the clinic at all yet) can generate a good phase 2, it also could go right to sales (and Incyte will know about most cases of post-MF AML).

  • Reply to

    Shorts fail again

    by jacosa Apr 22, 2015 12:06 PM
    jacosa jacosa Apr 23, 2015 3:25 PM Flag

    Yeah, mostly institutional. I suspect that a lot of institutions aren't buying for the reason I'm not buying right now: we expect the up move to start gradually, and meanwhile we expect shenanigans like the recent press release (The shorts may be more imaginative than I am, but my next move would be to have Susan G Komen and a couple thousand demonstrators in front of The Capitol demanding that Myriad "share" its database. Probably cost well under a mil, and the situation is getting serious.

    This next is just a guess: the short stock is probably on the accounts of some big players (position size suggests about 3). They borrowed it using repos with Treasuries on the other side, so the rental price is low, but the deals have to be renegotiated occasionally. It is, on their books, the short side of an "unrelated hedge" (they are long a similar principal amount of a basket of health care stocks). Since the other stocks have outperformed Myriad, they don't look so bad, net. But the approximately 25% move of Myriad against them itches. They are probably thinking about now that the easy money has been made in health care, and they'd like to move on. But to do that, they have to close both sides of the hedge, not just the long one. On top of that, each individual piece of the case for Myriad to go down is crumbling. The value of a potential future pot of gold is dictated by extensions of the "Black-Scholes equation," where time works against you and rising interest rates reinforce that. The itchy bad short threatens to become a carbuncle.

    There will be a time when the threats force shorts to buy; I'm guessing August when the full strength of myRisk demand will first be reported.

  • Reply to

    And if this new startup offers the brca

    by lakeside63a Apr 21, 2015 8:57 PM
    jacosa jacosa Apr 23, 2015 12:43 PM Flag

    Your science is worse than your truthfulness (I don't rub my education in people's faces too much, but the BRCA genes are what we call dominant genes of moderate penetrance. Consequence is that you can't breed out the traits by dilution)(Again to the most public example: AJ's mother had quite assorted ancestry). Your estimate is uninteresting. Your apparent political stance is getting interesting.

  • Reply to

    And if this new startup offers the brca

    by lakeside63a Apr 21, 2015 8:57 PM
    jacosa jacosa Apr 23, 2015 11:18 AM Flag

    "I never said the brca was exclusive to Jewish women" lakeside63a

    "Good spiel, but what is the brca really? It's officially listed as a "founders effect" defect, caused by inbreeding. It means your ancestral pool started out with a few fundamentalist, believed they were God's chosen, and only mated within that pool for many generations." lakeside63a

    "We report, you decide" Fox News

  • Reply to

    NVS Jakavi revenue 1st quarter

    by maddison3 Apr 23, 2015 8:43 AM
    jacosa jacosa Apr 23, 2015 11:10 AM Flag

    Consider also that pharmacy inventories of Jakafi were depleted as of the start of the quarter. On the other side, though, we ought to be hearing about exhaustion of already-expensed Jakafi API inventory.

  • 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?

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