overall trading volumes are thinning out this second half of the week as we come into the holiday weekend. look for those "no volume" hard flushes to happen tmmrw as well. just big bulls trying to run sell stops so that they can pick up shares on the cheap. i've said it before and will say it again. NEVER sell a quiet mkt in a trending(bullish) stock.
i stick by my belief that this is the "summer of the buyouts" with large pharm going after the sub 50b companies like incy. light volume rally today so i don't put too much weight into it. that said, if you are a short it has to be painful when you see a vicious reversal off this mornings flush and such a strong run today. $115 this week?
i am already long a large amount of common shares, june 80 calls for size(bought last nov and dec) but wanted more exposure and not necessarily "leverage". I'll most likely exercise my june calls so content to add exposure via the option.
why the sep 80.00 call you might ask. i picked that because as opposed to $1,070,000 buying 10k more shares i am only laying out 300k. so i pay for the time value, but that gives me 600k to use elsewhere. I might add, sure..... i could really lever up and buy a lot more sep 130 calls, but i do not want to be eaten alive with the theta bill.
point is, i just wanted to post what i'm doing. i appreciate your pov.
as i said, i think that we will have an "active" summer of buyouts this summer. I do think INCY will be a target and decided to pony up a few bucks and buy 100 sep 80 calls. i had to pay a little "extra" to get my order filled, but such is life in the options market.
I was not an english major, but certainly you know what an Adverb is, yes? secondly, do you have any opinion about the ML report?
firstly, i think it is wrong that ws analysts can have private meetings and dinners with management of public companies and gain "private" information prior to the general public. that said, i have accounts with ML.
so...the report. $120 price target and the write up is pretty boring.
"Our DCF-derived PO of $120 for INCY includes $45/share for Jakafi in MF and
PV, $38/share for JAK inhibition in oncology, $20/share for the IDO (24360)
platform, $9/share for baricitinib and $8/share for the early pipeline, offset, in part,
by net debt. We use a 9% WACC for Jakafi, an 11% WACC for ruxolitinib and
'39110 in solid tumors, a 10% WACC for the IDO platform and a 9-10% WACC for
baricitinib. We use a range of WACCs from 11-13% for the remainder of the
pipeline. We assume zero terminal value for all products, consistent with our other
way too conservative in my opinion. Barictinib for RA & additional indications could be a massive mkt for incy. given that they have royalties in the mid/high 20's% i believe it is under appreciated still.
Lilly should/will just try take out the entire company in my opinion.
part of the pump today is maybe on the galapagos ipo. i believe it is way over hypded given they are developing a jak-1 blocked for r.a. and way behind the curve. i guess you could argue that just makes it more bullish for us. dunno. my 2cents tonight.
that's pretty much what i am trying to say without the hype. i think lilly is going to make the move on incy and then pfizer will step into the mix as well. I doubt abbvie can make a move after the pcyc aquisition, but i think incy would be a better choice than galapagos.
i think we are about to get the press up to new highs on wed/thurs. would not feel good sitting on a call short or even a covered call. i think incy has plenty of legs(fundamentals) to take it to $125-130. ultimately, i think the company is sold.
finally back on the board. My thesis is that we actually rally post asco along with other names. I think this is the summer of the "mega buyouts" and that we do not hit the typical summer doldrums. SGEN is another name that i own and was pleased with on friday. I Actually adding to that now sub $40 and looking for $55, or a buyout offer, by year end.
quarter on quarter sales..... i think that is why we sold off today, with the rest of bios. i don't make much of it on a one quarter basis, but if uptake is not better over the next couple/few quarters i will possibly change my mind. overall, i still content to maintain my position and keep adding on and drop into the lower 90's should that happen. my personal feeling is that we are close to a low on the overall sector puke and i am buying fidelity select biotech fund today.
keeps us at risk of a sub "fair value" buyout offer in the $140 range post asco if you ask me. I bought a little more yesterday and happy to scale in here on further weakness. BIIB i am also buying after the massive puke there. i think decent value to be had over the longer term.
i think todays move in the sector may be largely amgn driven. i did not catch the news earlier, but that is my 2cents. biogen has also struggled recently and starting to look decent to me being 25% off the highs. time to maybe start scaling in. this said, at least i feel that i have a clue as to why we flushed today, but that is ok. buy dips and sell rallies.
i just read the ml report. really nothing "incytefull" in it if you ask me. we had the run up on the recent data and now were are trading off on fairly light volume and removing margin buyers from the equation. looking back, it is pretty funny that every time ml seems to upgrade incy's target price the shares dump before recovering and trading to new highs.
Jakafi sales for MF and PV should bring in plenty of money over the next 18-24 months. Even with higher R&D expenses INCY is looking at 2016 eps estimates of 1.70 and 3.26 for 2017 per BOFA/ML.
drivers will continue to be new streams concerning LLY and the phase3 data on R.A. not to mention potential for diabetic nephropathy. alopecia and psoriasis. We also will be getting s bunch of data on IDO studies. we also should be getting data from phase3 studies for pancreatic cancer........that could be a long shot, but positive data would send us up an easy $20 imo.
the bottom line is that the pipeline is full and rich and incy can be generating $700-800 million of free cash flow in 2017. that makes them ripe for growth and an obvious target for an activist shareholder that might try to force the company to be sold.
personal opinion is that this move is consolidation after the 90-110 move. there are a ton of investor conferences pre asco and i'd look for a move towards $120 to maybe $125 into asco. jak sales... sure they are solid, but i think the "cancer story" is now moving our baby.
toying with the idea of selling may 105p and buying 110c.
i agree. there is no way I would tender my shares for anything close to $150. happy to sit tight for a couple/few years and make a lot more money. that said, if a $200 offer came in post asco i'd be happy to take it and hold onto the shares of the purchasing company.
just went through the data and certainly can see why we are up the way we are today. I despise pumpers and fear i might be taken as one.... i think INCY could become a legit 75-100b mkt cap company in 5-7 years. the data looks astonishing to me and the foundation for some potential massive growth. How to fund the trials? revenue off Jak and assumed royalties from lilly off r.a. approval.
feeling pretty good right now(scary to say) and content to sit on my hands.
check out SGEN's news from yesterday. I am long that stock as well & think it is poised to breakout over the $40 resistance given improving fundamentals.
crazy thought, but maybe INCY tries to buy them? i'd guess they would have to pay close to $60 per share to get the deal done.