Unfortunately, I think your worst case above is also the likely case, at least in the US. Regarding the EU, what leads you to believe they would need two trials there too? My reading of their last presentation is that they would move forward on filing in the EU. Also, CRE resistance is a bigger deal in the EU than in the US, so they need this drug more.
If you mean filing for cUTI with what they have, no, that is highly unlikely. The CEO said that any redo of the trial would need to be as large as Ignite2. They would effectively be starting over, but with greater foresight into site selection and dosing.
Just to be clear, they had the results in hand since "late last week" and not a full week before they disclosed them. (according to the conference call after the P3 results). "Late last week" implies Friday, or maybe Thursday of the preceding week.
The lawsuit is for a period from March to September 2015 (basically close of Q4 2014, and including the secondary offering). I think if anything is misleading, it would have to be the selection of the sites for the oral dosing. If they intentionally chose hospitals with known resistance to levofloxacin, then maybe the case has merit. That's the main risk that I see.
I am truly surprised by the number of law firms angling to get in on this. Hopefully it dies down in a couple of months. Unfortunately, it probably keeps a ceiling over the stock price in the near term.
Here's what we know from their update in December: They:
1) Plan to submit a regulatory filing in Europe
2) Plan to conduct an additional clinical trial in cUTI with IV
With TTPH trading below cash-value, the market is rightly anticipating another round of dilution to see them through (2) above. What scares me here: part of the investor base is still holding out for an NDA with only one successful trial. Others are hoping for just a small confirmatory cUTI trial. So when the company confirms (2) above, the share price can very easily take another leg down.
Celgene's PDE4 inhibitor is running at $330 million a year and growing 50% per quarter. They are projecting sales of between $1.5 billion and $2 billion in 2017. Granted, they are for different indications (currently) and Celgene's is an oral medication. Do you feel an oral medicine has greater potential than a topical?
You seem to have a decent head on your shoulders. I have been short VIX off-and-on generally since mid August, clearly in the minus column but doing better than elsewhere in the market. If you look at past bull-bear transition periods, I think we are in the 4th or 5th inning in terms of volatility adjustments. My worst case scenario for ZIV would be futures rising to 30, which would require a specific crisis and would mean a ZIV in the 24-25 range. The good news is that such an elevated reading in unsustainable in the long run. The bad news is that we could easily get futures into the 26 range (and ZIV down to around 30).
What concerns me here is the possibility of returning to an environment much like 1998, with spot VIX jumping around these level for months on end. That would certainly send ZIV lower for longer. XIV too would get hurt, as backwardation and "volatility of volatility" erodes its value. XIV can be a reasonable risk if you enter conservatively (spot VIX 27), scale in over time, and take some profits quickly. Pick a lower bound for spot VIX in this environment (20? 22?) and scale out whenever you have the chance. Assume you'll be given another chance to re-enter in the future.
Has anyone looked more closely at a short VXX/short SVXY pair trade through a synthetic short in each? I am considering this trade as a lower-risk alternative.
In hindsight, it was obvious this was coming. Markets are forward-looking by about six months. Everybody knows that the tanker fleet is about to grow into oversupply. The building plans are known, the timelines are known. It was musical chairs out there, and the music just stopped.
I took a huge loss on this today, and it hurt even more because I had a limit order at 8.19 several weeks ago that didn't fill. Anyone holding buying this for the dividend yield is kidding themselves. Money is fungible. You can make your own dividend anytime you want to just by selling shares and pocketing the cash. The dividend represents less than a days worth of equity gains/losses, as we've witnessed repeatedly over the last week.
Two other headwinds I'd like others here to think about: The VLCC rates are driven by Asia, and Asia is in a slowdown. That's probably the main reason why rates have collapsed over the past week. China sneezes and DHT gets a cold. Second, the Iranian fleet is mostly VLCC carriers. Where do you think those ships are going to sail to? That's right, Asia. So when Iran comes online, VLCC rates will likely take another beating. After that, we are into the summer and have to contend with an endless supply of new builds.
Intertanko spot rates now at $81700. Has anyone here kept a list of the spot rates over the past year or so? If so and you can share, I'll gladly build a model of the share price and share it here.
$200 million cash on hand. $260 market cap. No long term debt. Burning $20 million per quarter. Is eravacycline worth $60 million in its curent state?
Big question will be the timing of any secondary. They will need to raise to fund a new P3 IV cUTI study, which they've stated will need to be as large as the previous study. So is 2016 downside 20% from here, or more? Is it time to mortgage that house?
This looks about it to me. $175/1260 is only about 14% or so dilution. We are down that plus some more (risk-off sentiment). Seems excessive, given the decline in the run-up to the offering.
This stock has been a bit frustrating in 2015. Compared to its peers, it's been the laggard of the group:
TNK: + 31.8%
Things look a bit better over the 3 month and 6 month timeframe, and I'd gladly hold DHT over FRO and TNK. I don't know much about EURN.
NAT, however, has been outstanding. Why the outperformance? Is it simply its low debt and focus on the spot market? Is it winner-take-all in this environment of rising spot rates? We would expect DHT to do relatively better in a falling rate environment, but the share price would get killed anyway.
DHT's strategy of pinning the dividend to earnings may also be keeping us down. Sure, it gives shareholders some upside, but it cuts both ways. It's essentially a built-in dividend cut when rates turn lower. Management won't be defending the dividend, and that indicates a lack of confidence. As a shareholder, you can always create your own dividend anytime you want to, simply by selling shares (minus the tax benefit, of course). I've tried to do that this year, trading some of the swings rather than holding for the long term.
Is the prudent trade here to consider some sort of pair strategy with one of its peers? For example, go short NAT and long DHT? Either the values converge as DHT new-builds hit the water. Or someone buys DHT, whose assets are relatively undervalued compared to its peers.
All-in-all not a bad year but not a great one either. Here's to a prosperous 2016!
I just listened to the call from September, and Guy stated they had the results in hand "at the end of last week". So it is entirely possible they got it on Friday afternoon and chose to hold it a day. I have no idea what the disclosure requirements may be (if any) but it does seem suspicious...particularly given all the selling going on up to that point. I also question the very misleading lead-in data and whether the lead-in sites were chosen randomly. Bottom line is that I don't trust this management team.
BTW, OnPoint had a great program on antibiotic resistance recently (12/16/2015). Worth a listen. I don't believe this drug is dead, but I am not an investor at this time.
Hey, how are you holding up here? Things are not shaping up well for next week. Thus junk bond fund issue has potential, in my opinion. Be safe.
This is a liquidity issue, not a solvency issue. It doesn't matter if the underlying companies are anywhere near default. The problem with this ETF is that it gives the illusion of liquidity to a less liquid asset (the underlying bond). What happens if everyone tries to step out of this ETF at the same time? The ETF managers will need to sell the underlying in order to raise the cash to pay for redemptions. If there are no buyers for the underlying bonds at the currently quoted prices, then the bonds reprice downwards. What happens when bonds reprice downwards? The yields spike up. Granted, there will still be a market for these bonds at some low price/high yield. In the meantime, though, these ETFs will be under more and more pressure. It is potentially a cascading scenario. If the junk bond market implodes, then corporate borrowing costs will go up. People will begin questioning the ability of corporations to buy back shares or invest in general. That will affect equities and the broader market in ways we can only imagine.
One interpretation of the Piper note is: "Remember those non-responding patients we told you about? Well, let's not give up on them so soon." However, people are interpreting his comments as preparing the street for more bad news, or maybe they will be lengthening the timeframe of the outstanding trials.
Today seems like traders decided to shoot first and ask question later. According to Street Insider, the CEO commented: "Reaction to Piper note much ado about nothing"
Here is a useful article that shows historical growth in revenue for new antibiotics. While I like TTPH's chances of approval (eventually), I don't like the expected revenue curve here. I bet they raise equity again next year on any sustained pop.
Also do a google search for the colistin news out of China this past week. Scary stuff!
This is really an excellent post, but you are forgot something: Not only did they use the debt for acquisitions they also used a portion to buy back stock at a price far higher than here!