Brandon Abbs

Long/short equity, special situations, options, biotech
Brandon Abbs
Long/short equity, special situations, options, biotech
Contributor since: 2015
Are you implying that PML is not a potential issue for 8700? There is nothing about 8700 that suggests it will not carry the same risk for PML as Tecfidera.
Very interesting timeline - thanks for putting that all together!
I posted this morning, but I lucked out by being scared at the open and buying after the big dip in the S&P.
XIV closed at 25.57 for a 10.5% gain.
Thanks for commenting, but I don't see why it's a "no Brainer" that the stock is headed higher. The stock is down almost 20% over the past 3 months while the sector is flat or up depending on your measure. Although the catalysts I mentioned should help, there's always risk involved. If the data are all negative results, I doubt the stock will head higher.
Thanks for the extra information - I wondered why earnings was delayed and so did the market, apparently. Others seemed to have feared the worst (the stock was down), but it looks like it could be good news.
Yes, thank you for the clarification of the comment - scheduling is a drug-by-drug decision (eg, heroin and oxycodone are both opioids but are scheduled differently). However, the class of drug does reflect on the specific medication and scheduling would depend on how well the drug can be differentiated from currently scheduled substances based on chemical structure, use, abuse potential, etc.
Really? DVDs of made-for-tv documentaries is a major deal? Viewers will definitely buy Blu-Ray rather than surf the free VOD shows cable gives them. I hear direct-to-video is a growth market too. Sarcasm intended - short LGF.
I waited to see if it would come back up and it did not, so I ended up closing out around 26.00. Then I went short and by the end of the day had made back what I lost overnight. That is a tactic I have not tried before, but I will backtest.
Plus coffee futures are way down
Are you short FXI or not? It's not in your disclosures.
I did buy - With the holiday craziness, I did not find time to post, so thanks to the person whose comment prompted this update.
I bought at $27.58. The UVXY rose into the close on Tuesday, so I would have liked to have waited until yesterday, but that's not my system - and the overnight gap down was not very big, so I probably would not have gained much. I was just happy UVXY dropped from near $28 in the last half hour on Tuesday for a nicer entry.
And yes, UVXY was down yesterday, but that's to be expected. I have been playing with a system where VXX is used in times of less certainty to reduce the risk, but I have not fully defined when that should be. Also, I checked last year's numbers and volatility dropped the day before Thanksgiving but rose during the 1/2 day Friday and Monday after TDAY for a nice gain. With the shakiness in the market on Tuesday, I expect the same and to close out this trade on Monday. I'll post again when it closes.
Sorry - that should read "lower PDUFA fees for US companies"
How about giving companies reasons to stay rather than trying to block the exits? For pharma, you could lower PDUFA fees for non-US companies or offer priority review. Or you could support research through NIH. Or you could offer better patent protection. We have one of the biggest markets and most fertile research environments - how about we act like it?
Both the MS and AUD regulatory pathways for Xenoport are tough roads. A 505(b)2 in MS is only helpful if FDA doesn't require efficacy data. This is the agreement Alkermes reports it has gotten. Otherwise you are looking at a 2-year placebo controlled trial that no patient will enroll in. Getting stuck doing even one trial to demonstrate efficacy is not good. Plus, you have to beat both Alkermes and ForwardPharma to market in MS.
And it's not clear that psoriasis is a lucrative market. DMF is approved for psoriasis in Germany and Biogen has never shown any interest in commercializing it, gaining wider EU approval, or getting US approval in that indication.
For AUD, FDA requires improvements in abstinence, which is a tough endpoint to meet.
I am not sure what company would be willing to taking on these clinical trial challenges. People think Xenoport and ForwardPharma are easy sells, but approval for an MMF prodrug is not going to be an easy win for them, patent issues aside.
In my opinion, The most attractive piece is the growing Horizant sales. I think that's why you have companies looking at that and nothing else.
Although the article is not advice to buy or sell NK, I don't know why anyone would go short based on this article. It argues that the share price could have been at its bottom and that there may be a catalyst on the horizon. Plus, it was a rare opportunity to get on the same side of the trade as a CEO/owner. If anyone went short after reading this article then I really did a poor job of explaining myself. I consider the fact that the stock is up almost 50% since I published evidence that I was on to something. We still don't know what that something is, but it will be interesting to find out.
Thanks for the additional information and the patient perspective - standard of care, illness management, and the patient's point-of-view are not often discussed in SA articles!
Politics aside, the law clearly states that Schedule I is only for drugs with "no currently accepted medical use in treatment in the United States." Hard to argue an FDA approved medication does not have accepted medical use. However, in my opinion, the DEA is much harder to work with than FDA, so it will be interesting to see how far down the schedule cannabis falls if it ever becomes an FDA approved medication.
Has the efficacy been compared to DBV (not head to head of course, but by comparing Phase 2 data)? If the effectiveness is the same, I would think parents and doctors are going to choose the DBV patch over the oral therapy.
Looks like I was wrong - NK is up another 10% as of 10:45 AM. Could mean it is headed to the $20-25 range (my article gives the rationale for this).
Wish I had followed my own advice on NK - It's up 25% since my SA article, but if the recent filing is driving this bump, then it will hover around $15.30 until it gets a catalyst: (http://seekingalpha.co...)
Thanks for the comment. I agree that cancer pain studies will likely not be fruitful. There are some milestone payments for Sativex still on the table, including payments if the MS spasticity indication is pursued in the US, but sales revenue would not be a significant boost. The only projections I can find estimate annual revenue of $100M and GWPH would only see 20% of that (http://bit.ly/1H7v1e9). Also, I believe GWPH is responsible for manufacturing and supply, so the cost to ramping up manufacturing will eat into any potential gain for revenue.
The milestone payments for commercialization are potentially significant, and would be nice to get, but I think the revenue stream from epilepsy can be started with the cash on hand. Here are the data on milestones and royalties at play (from their annual report): "$54.0 million are linked to regulatory milestones, such as initiation of Phase 3 trials, submission of an NDA to the FDA and other regulatory approvals, and $200.0 million are linked to various commercial milestones, as well as revenue from the supply of products and royalties on product sales. Our combined supply price and royalty to Otsuka equates to a percentage in the mid-twenties of Otsuka’s in-market net sales revenue."
Right now, the best thing that GWPH might be getting from Sativex is that it can say it's a "real" company with a "real" product even if the revenue stream is insignificant.
I plan to look into the potential revenue for the rest of the pipeline in future articles to better evaluate the actual growth prospects. The catalysts will drive the stock price in the near-term.
UPDATE: I failed to look at SRNE filings for clues as to their motivation. They do not say that they are getting anything directly in return for these options, but they do indicate an indirect gain --
"Pursuant to a limited liability company agreement dated as of July 2, 2015 for NantCancerStemCell, LLC (“NantCancerStemCell”) by and between the Company and NantBioScience, Inc. (“NantBioScience”), the Company agreed to make capital contributions to NantCancerStemCell equal to $40 million in the aggregate (and NantBioScience agreed to make capital contributions to NantCancerStemCell equal to $60 million in the aggregate). Pursuant to a letter agreement executed on
October 14, 2015 (the “October Letter”), the Company and NantBioScience agreed that the Company would be relieved of its obligation to make the final $20 million capital contribution to NantCancerStemCell and the Company’s percentage interest in NantCancerStemCell would be reduced to 20% and NantBioScience’s percentage interest in NantCancerStemCell would be increased to 80%."
This muddies the water a bit as Soon-Shiong could benefit from the new arrangement without NK's stock rising. He is getting the options plus the increased stake in return for relieving SRNE of their obligation, and the value of the options to Soon-Shiong depends on the cost associated with stepping in for SRNE.
Hi crichardt13,
We agree that the Catalyst business model is not a morally acceptable one. I was trying to add to the thesis that Catalyst may not be a good investment even if you can stomach it: Catalyst's plan to capture market exclusivity and charge for a drug that is currently free is dependent on being approved first. If Jacobus ends up with the approval, then game over for Catalyst on this product.
Even though Catalyst has breakthrough therapy designation, I don't think this offers any exclusivity until they are approved. Jacobus could get their NDA in before Catalyst and apply for expedited review. I was trying to point out that it looks like this is a real possibility. If Jacobus gets their NDA in first and gets expedited review, then Catalyst is behind them in line. At worst, I would guess the FDA will end up reviewing the applications at the same time as long as Jacobus has had a pre-NDA meeting and is on schedule to submit relatively soon.
Given that Jacobus has been giving the drug away for years, they should be able to offer FDA a larger safety database than Catalyst. In any case, given the morals involved, I would think that FDA would be interested in helping Jacobus in anyway they can and Catalyst's breakthrough designation may not really mean that much to their commercial prospects.
The more important point seems to be that Jacobus is planning to file an NDA before Catalyst. According to Feuerstein, Jacobus has confirmatory Phase 3 results and plans to file an NDA, perhaps in advance of Catalyst. This plan would seemingly eliminate any advantage Catalyst has with its breakthrough therapy designation - unless Jacobus has not been in good communication with the FDA and they consider Catalyst's trial design and patient numbers to be superior evidence. This will make a good regulatory case study when it's all over.
Interesting that they passed up the opportunity to confirm or even raise guidance. The release said they are waiting until the November investor meeting to give updated guidance, but if it's good news, why not pile it on? I'd look for them to report October sales at the Investor meeting to show the bump from All Day Breakfast and confirm or potentially raise guidance. If so, this meeting could be another catalyst. Even if breakfast were to disappoint in October, it probably won't dampen the enthusiasm. Easterbrook could give a presentation that declares bankruptcy and the buyers would still flood in. He's definitely got a hold on investors.
Good news except he has to get down to 1.86M by the end of the year to meet the call according to GMCR.
And no insiders buying since the plunge (or November, 2011 for that matter). Maybe they did see the warm winter coming after all.
To be fair, Jose did predict GMCR would go to $29.50