Even worse...You can't spell catalyst. Xtandi is the whole ball of wax. Most believe that they were conservative on their guidance--but the guidance was less than what was hoped for. Urologists have a strong incentive to prescribe Xtandi---I'm in
Indeed...Dah is correct here. Marckx of Zacks is the only analyst covering this and he bases all of his valuation models based upon fully diluted shares. Presently the market cap is what Dah says that it is.
First of all...Most corporate public relations departments are NOT 24 hour operations. The Orphan Drug Designation came out well after the stock market closed and in all likelihood after the company's public relations department or agency was home for the day. The FDA's granting of Orphan Drug status is documented and it will undoubtedly propel the stock.
Keep in mind that the news today was considered a "long shot" and the news came completely out of left field. The share count isn't as easy to calculate as going on Yahoo's statistic pages because their recent financing put in place a bunch of warrants that will be available at a price far less than tomorrow's stock price. (I can't even imaging the IRR that these warrant holders got....)
The big question is, "How high will the stock go?" Let's assume that DARA has 10MM fully diluted shares after the warrants are exercised. So let's say before the news we were talking about at $25MM company. Is the Orphan status alone worth the price of the company prior to the news? It might very well be.
Make no mistake about it--this was huge news--those who are claiming that it's no big deal and just like ZLCS are in one word, "wrong". We'll see who they license up with--and we can speculate all we want about how much it will go up--but I would not be surprised if we see an ICPT percentage type move (though nothing like the overall market cap of ICPT).
I have the the posts made since the market closed and am amazed that not a single person posted the reason for the after hours activity--simply put, KRN5500 received Orphan Drug Designation from the FDA. This was considered to be a long shot and the news came surprisingly early.
First of all...You can't expect a true gauge of "market reaction" when the biggest news of the year is released on New Year's Eve Day...
After reading Ping and the other posters, I think that we're all in the frustrating position of "being on the right track but not quite there". I often feel like I'm 9 years old and we're on a road trip to visit my grandparents and "We're not there yet".
In my mind, the finish line is not FDA approval, but finding a deep pocket partner who can basically take over operations and provide CTSO with a licensing fee in perpetuity. Take a look at the ABBV-ENTA deal as a framework. That would be the home run that we're looking for....
What we've been faced with is a perpetual race against the dilution clock in order to fund operations. Whether fourth quarter sales are this or that is really irrelevant in that it's not enough to bring this guy over the finish line of test funding.
The present data seems to indicate that things do look promising. In an ideal world, that guy they hired from J&J has industry contacts to make sure this thing comes all the way home. Is the data good enough now? or do we have to wait for more results to come in? That's the question.
For the record, I am long CMXI for reasons best stated in Napodano's many well written articles.
The question being asked--or what should be asked--is "How can this stock be done after the CMS decision appeared to be so favorable?"
The first theory of the stock collapse from $0.70 is that the news wasn't as good as it could have been. Napodano describes the "donut hole" better than I can. CMXI got part of what it wanted--but it could have been better. That said, the part that they did get should have propelled the stock--or at least keep it above what it is now.
The second theory I've heard is the impact of Lincoln Park Capital selling. Keep in mind that Lincoln Park does NOT work in a vacuum. They have gains and losses elsewhere. Lincoln Park had a similar financing arrangement with ZCLS. Unfortunately, ZLCS did not gain FDA approval on their lead drug. The stock cratered. And with it, the theory goes, Lincoln Park suffered substantial losses. Hence, the gains that they had in CMXI--albeit temporary---were quickly liquidated to offset the ZLCS losses--maybe for tax reasons.
Will the selling abate in 2014? Hard to tell. My best guess is that we're in wait and see mode until the CMS guidelines become less murky.