As drama goes, this doesn't exactly rank up there with "Hamlet". So the Interim guy phases himself out to go on to bigger things? Not exactly earth-shattering news here.
My take? He was brought in to audit the processes and practices that were put in place under Reynolds' tenure and to fix anything that was broken before the Annual Reports were due. That's done, so away he goes riding into the sunset.
It's perfectly normal - once the trial is done, it's done and there is no obligation to continue participants on the therapy under test.
Just fuel for the fire on the next leg up.
The increase in Short Interest here is just a numbers game. The rally from late August to late November (and particularly the leg of the rally that occurred in November) was so violent that it had to pause. Short traders bet on a pause with the RSI "pegged" during a period when nearly every day's trading represented a new 52-week high knowing that the "mo-mo" contingent would set tight stops. A pretty safe bet.
The weakness of the Short position is that they have no fundamental thesis here beyond short-term market dynamics. There's no financial weakness, sales momentum on Duexis and Rayos are strong, acquisition of Vimovo was capitalized without requiring a Secondary Offering and last (but not least) the company is guiding for profitability in 2014 (every time I type that it gives me the "shivers").
Of course they will contend that Vimovo is a "loser", just as they did with Duexis and Rayos, but given the fact that they've been wrong two out of three times now, that dog won't hunt. One month of sales with an improving trajectory will pretty much send that down in flames. Qne Q/Q of compounded monthly growth and they'll be running for the exits.
The bottom line here is that the spike in Short Interest here is likely an anomaly. In fact I will be somewhat surprised if we don't see a decline there when the end of December reports are posted by NASDAQ.
Zacks periodically proves that they, too can read the Yahoo Financial Analyst Opinion Page and use the Interactive Chart feature to see where the RSI is. Not exactly what I would call a hotbed of cutting-edge analysis. Still, a positive is a positive and may pique some retail interest.
Fact is, we're consolidating right now (finally showing accumulation) and it is probably going to be a few days or so before we start seeing anything like meaningful action. I'm still looking for a couple of low volume trading days with neutral or slightly positive price action.
Hey ranger, in a world where every high school coach wants every player to give "110%" who is going to quibble over 105% portfolio?
It's been over a week now since we set a new 52-week high and it was only yesterday that the RSI started falling off. Yeah, we needed one of two things; a pullback or more good news. I'll settle for the pullback and the buying opportunity.
No, what would have been "stupid" would have been to pass on a financing deal that enabled the company to address a long-term debt issue under favorable terms, avoid dilution through a Secondary offering, capitalize a third product to the line-up and position themselves to acquire more products in future - all at the cost of a short term dip in the stock price which will be in the rear view mirror shortly. This pullback might matter to day-traders; in the long run it will prove to be healthy for the stock.
Why in the name of (insert Hairy Thunderer or Cosmic Muffin name here) would ANY partner step up at the time of the NDA submission? From the standpoint of the partner it makes no sense at all. From the standpoint of Mannkind it makes even less sense; the longer they can play this out, the better their deal will be. And, in any event why would you ever expect any company to be "transparent" about a process which by its very nature is confidential?
As to your January 13 "deadline", kevin, what will you do if it isn't met? Sell your stock? Flood the message board with more whiny little posts wondering why nobody will give you inside information? They will announce the deal when there is material progress, and not one nanosecond sooner.
I agree with your point, but not your example.
Arena's drug has been on the market for less than a year, and their biggest barrier has not been marketing but insurance coverage. They are already partnered globally with Eisai, who has a long and effective sales track record and has only recently started any element of their Direct-To-Consumer campaign. Seven-odd months post-launch doesn't make for a marketing problem, not with steadily increasing (seasonally adjusted) sales - especially in the field of obesity.
Horizon could very well become the marketing partner of choice in the Rheumatoid Arthritis space. They are building quite the network and the products that they have selected to bring to market have huge potential.
No question that there's potential impact. I agree that we are less exposed to that here, than with some companies. Oncology is probably the toughest investment area in this sector anyway, and it certainly doesn't need the drag that ACA is likely to create in the near-term. I generally steer clear of cancer treatment investments once they are out of Phase III development, and this is just going to tighten my filter some.
The "politics and religion" thing was my attempt at humor. Discussing macro influences here is certainly appropriate.
I've got my "wait and see" hat on with ACA, pb. It introduces an interesting element to the whole "cost of development" picture for sure. Of course the whole bloody mess could crash and burn with the next election cycle, so it simply may not ever materialize into much of anything.
Now there's three topics to stay away from in bars: religion, politics and health care.
It's easy to get the willies when a stock you've invested in behaves the way this one has for the past couple of months. It reminds me of the action in Apple last year, and as much fun as that was, it was kind of nerve-wracking too, a real challenge to my normal Zen-like attitude to this sort of thing.
The rally that we just came off of was HUGE, no question about it. And I don't think that any of us really saw it coming. I mean, after all going from $2.14 in August to $4.83 in October, pulling back to $3.74 in early November and running non-stop to $7.39 a little more than a week ago? What a RUSH! And it validated our opinion of where this company is headed in a big way, and even more just WHY we share that belief.
The management of this little outfit is spectacular. That's the only way I can describe them. They have put together a sales and marketing model that is probably the most innovative and productive way to sell (legal) drugs that I have ever seen. And it's working.
So now we're in a pullback. The company has added a third product to their stable, which is good news - but Mr. Market is a skittish sort of fellow, and will want to see results. And the nasty ol' shorts out there are going to capitalize on the uncertainty - it's what they do. So until we get some PR or some positive rah-rah from the blogosphere there's going to be day-trading, profit-taking and shorting and we're going to bounce around a bit. It won't last.
The day will come when the world assembled will recognize that if Tim & Company say that they are going to sell therapeutic ice at the North Pole and profit handsomely from the process, that they will in fact do just that. Now we ain't there just yet, but it's looking good. So take a breath, look at the chart since August and ask yourself if anything has fundamentally changed here. (Actually, the answer is "yes" and much for the better, but you know what I mean). Things are looking pretty good.
So don't sweat the small stuff.
Are you talking about the same HZNP that generated 300+ percent returns here since August, and nearly a double in the month of November alone? Hardly "stuck in the mud" my friend. This is just a breather before the next leg up. Yes, we have gotten more short activity here during the rally, but that's not "manipulation" it's just a normal feature of the markets.
This is a good period in which to trade the swings (if you are inclined) or to add at the dips. Either way, a little patience will go a long way.
Different strokes, I guess.
As to your judgement on the quality of the trades:
AMRN is completely speculative, but a cheap buy in with a reasonably high potential return. Even if they don't get an "idiot rally" next week, they're range-bound and cheap so it's pretty low-risk.
ARNA was an stupid buy at twelve dollars, but with increasing prescription numbers and a global partner that just doubled their US sales force and with realignment of insurers in Q1, at current prices (especially with the recent pullback) it's a pretty good play around weekly scripts.
MNKD has their 74-Day Letter due in the next few weeks and has formed an extremely strong base in the $5.00 range. Yesterday's spike was due to a positive "puff" piece in the LA Times - today's pullback was predictable. And I'd never hold them into approval. Sell during the run-up at a good profit and buy back after the news.
And POZN didn't "lose" Vimovo to HZNP. They got rid of a partner that couldn't sell their drug very well and replaced that partner with one that would. Sounds like a "win-win" to me.
You are right,pb, that this is a fundamentals story. No question. My point is that an increase in short position over this brief a period is generally opportunistic. The strategy for the short trade is either that there is a weakness in fundamentals (thesis driven) or an opportunity that presents itself because rallies tend to over-run themselves driven by price chasing and momentum. Of the two, the latter is the weaker trading position because (assuming sound fundamentals) the stock will re-base, consolidate and (if undervalued, as we remain) continue.
I'm still convinced that the analysis I posted earlier in the day is accurate: we are in the late distribution phase of the recent rally, vulnerable to opportunistic shorting, which will be followed by accumulation and a major breakout.
Patience and dry powder.
And again (I know I've said this before) if you look at small-cap biopharms, 21% isn't that high a percentage of float held short. Several that I have researched run in the low 30's and if I recall correctly Horizon was higher than that prior to the Rayos PDUFA. Anyway, at least the numbers are out now.
Just saw the 11/29 report pb. Shares held short increased from 5,530,382 on 11/15 to 9,483,381 on 11/29 with 3.05 Days to cover. Certainly explains the battleground at the seven-fifteen level. That makes the percentage of the float held short about 21.2%.
Fuel for the fire, my friend.