Mark Chapman

Long only, contrarian, event-driven
Mark Chapman
Long only, contrarian, event-driven
Contributor since: 2013
Same question as to previous commenter. Why would FDA allow different injectors for same product at same time for the originator, but not a generic?
Then why would the FDA allow two different EpiPen injectors to be used previously at the same time? Wouldn't that be dangerous too?
I am getting tempted at these prices... But just need some type of sign that biotech in general has found a bottom. I doubt it drops to $10, but you never know.
S.M. Ahmed,
A few trolls won't stop me from trying to increase awareness. Being a father of a 2 year old boy myself (although lucky enough that he is healthy), this topic is more than the greed of making a few bucks. It's mostly about the human element, and i will continue to support investment in DMD.
I really do wish you and your son the best of luck.
Yeah, I am torn with PTCT. The bar for getting FDA approval appears to be high, which will be a major hurdle. But from the data I've seen, the drug does seem to provide benefit. The cost is certainly an issue - however, will orphan drugs ever be developed if a company knows cost limiatations will prohibit being able to recoup the investment? That's the dilemma.
Wow, tough crowd here, but thanks for the feedback none the less.
I guess I thought the analysis was rather straight forward. Pretty much all the stocks are trading down sharply, despite several companies reporting some progress - which means that sentiment is dragging the peer group down. So despite Catabasis recently announcing positive phase 1 results, the stock drops due to the safety issue at Akashi.
So when you combine the bad news of Akashi, the FDA denying drisapersen, eteplirsen looking like a long shot to get approved, and ataluren failing to achieve stat sig, DMD is proving elusive to treat.
One of the ways I think Seeking Alpha could significantly improve, especially for the biotech/pharma space, is more individual sub-sector (DMD, RA, MS, etc) overviews of the competitive landscape. But if other contributors/users don't see a benefit of this, then it's not worth my time to write up and post either.
You are right that it could. But that's why i really like CATB's SMART technology, because it is based on extremely well known molecules, which should make it easier to determine dosage/risks. Either way, i am sticking with CATB as i am hopeful that someway it helps DMD patients. With a 2 year old boy myself, I can't imagine how devastating the disease is for the boys and their families.
An unexpected catalyst today (Hobbs was fired), which will require me to rewrite an article i was almost finished with. I'm more hopeful that things will start turning in our favor, with Teva's earnings call being the long awaited unflection point (assuming the CRL for Gx Epi is relatively minor).
Appreciate the investigative work. There is certainly something going on, i guess it just depends on how the patent proceedings end up...
Yeah, I wouldn't be a seller here if I was already long... I'm just going to wait a little longer to see what happens with sentiment in the sector before investing.
I'd like to hear/read your analysis of the clinical trials when you complete your DD. My take is that the unmet need is good enough in PDP that the drug would sell, and this was generally confirmed by people I've talked with. But you are right that launching a drug is difficult, and the vast majority of drugs are over-hyped prior to launch.
I still tend to think the weakness is algo and fund/etf selling, but I am surprised that the underwriters were not able to support the price better too.
I generally stray away from adding probabilities, simply because it would just be purely a guess. That's why I prefer to encompass it with the discount rate, as I can compare investing in a potential 15% CAGR stock in a safer industry versus a high risk/beta biotech stock.
BostonMatty- You are right that a 15% discount rate would significantly raise the present value. But remember, it doesn't change the ultimate value if everything ends up going according to plan, which I model as $96 per share in 5 years. I just use the discount rate to help determine the risk/reward of the current share price. I mean, for only a 15% gain, aren't there many other less risky stocks out there?
Scootto- Any model is only as good as the input data. So am I understating the potential? Sure, I could be. Am I willing to put my capital on the line with extremely aggressive assumptions? No.
The other thing to remember is the time frame and discount rate. If everything goes to plan, my model shows the stock would be at $96 in 5 years. Not a bad gain compared to the current price, eh?
I agree with your logic here biobetter, and a strong launch would only add to your reasoning.
This is a very good point Joe Trader 69. ACAD may have been concerned that a biotech sell-off could temporarily (or permanently?) cause multiple contraction as sentiment turns against the sector, which would make it extremely difficult to raise capital at a decent price WHILE simultaneously trying to prepare for an extremely important drug launch.
Really, you don't think a P3 trial will be needed? Do you know of any other non-orphan drugs that were able to skip P3 trials?
Very good comment Joe Trader 69, I agree with much of what you said. The only thing I would add is that I have a hard time including off-label usage in the valuation without Phase 2 results. Sure, it could significantly boost the company's valuation, but with the main driver being the PDP approval and launch, I would rather wait until my chickens are hatched before counting them.
About the pricing- I hope it's not priced at $13k per year unless ACAD is just planning to significantly discount it.
I am with you on this.... And even if ACAD would have filed the MAA and it was denied, doesn't that make it easier to partner at least knowing what may need to be fixed, rather than just waiting around and wasting time?
I may be undervaluing off label sales and overseas. But I'm not going to make my investment rationale based on these IF's. I would much rather just have the upside surprise if I end up taking a position.
Regarding the pricing - If they price it over $10,000 I would sell immediately. Do you think that they will be able to find a partner for Europe with attractive terms for NUPLAZID costing over $10,000 per year? Probably not... And with all the focus on controlling drug pricing in Washington in the run up to the elections, how would they justify pricing it much higher in the US than in Europe?
No, which is why i used the dip to add. Completely different technology and very limited data that both companies had.
The only negative i could see is that the bar for approval may be higher than many investors expected, and/or that more extensive trials will be needed than planned, which could drain more capital and take longer to get to market. However, i could also argue that the failure of biomarin and sarepta may increase interest in CAT-1004 if the initial data are good, as DMD patients desparately need to get a drug approved. In this case, once the phase 2 portion is done, accelerated approval could be possible if the data are good enough.
NN, you forecasted this selloff well in advance. Kudos, and you've helped save me a lot of money. We are still due for another leg down in HY, no?
No hard feelings at all... Since I don't short stocks, the only reason i post "negative" articles are for stocks i am considering a long position; by posting i hope that others will point out something i am missing. I may be underestimating ESPR here... But just too risky for me right now. Thanks for the comments.
I am assuming one round each year until CAT-1004 is marketed, so at least another 3 are likely. But if the MoveDMD trial is successful, the capital raises would be at a much higher price than current. Plus, the company may be able to partner with its SMART linker technology for other drugs. But first step is the phase 1 data.
How much will another phase 2, multiple phase 3, and a CVOT cost? $300 million will go fast.
What niche are they going to carve out? That's what i want answered. As i stated in the article, if the label gets changed to include statin intolerance, i'm definitely going to assess going long. However, i believe it will take results from a CVOT before that happens.
The company will likely toe the line and say they still plan to file NDA before CVOT... But I don't trust it - simple as that. I can be convinced otherwise, but would need more reason other than simply ETC 1002 being a pill instead of injectable.
I agree about all developmental biotechs having uncertainty... However, you have to agree that not even having a clear path on the phase 3 trials constitutes a lot of uncertainty, right?
See my comments in the article about the secondary endpoints, which is why i was interested inthe trial from a cardio standpoint.
Well thats why i am more bearish on Esperion... The 014 trial fell flat to show other cardio benefits. I'll revisit when the company provides a more complete plan for the phase 3 program.
But isn't that worse? The company will have to hire a large sales force and pour money into marketing the drug against stiff competition. If the CVOTs for the PCSK9 drugs fail, then i'll revisit. But otherwise I don't see how the company earns a profit on the HeFH or high risk patients without the CVOT.