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  • Building a Biotech Portfolio With High Potential Returns, Modest Risk [View article]
    The sixth has been written up and submitted to Seeking Alpha. It should be published soon. I'll try to find two more in the near future.
    Jun 22 06:08 PM | Likes Like |Link to Comment
  • Tellabs: Cheap Like Cisco, But With Better Downside Protection [View article]
    I don't really disagree with you on Cisco. It's cheap and profitable, and I've been very tempted to buy it recently (I still might). I just felt that TLAB was similarly cheap, with a cash floor closer to its market cap than Cisco's.

    I appreciate your comments on the Titan lines/SONET. It does sound like the kind of risk that would escape me since I don't have experience with this sort of business. Unfortunately, I don't have much of an answer for you. I can tell you that Titan lines are mentioned nowhere in their recent filings, and SONET is only defined as one of the multiple data transport technologies that their equipment supports.

    I can estimate a ceiling on this business though. It would have to be in their broadband segment, the entirety of which represents 46% of their gross profits, if that helps put things in perspective.

    Also, if this business were very important and in sharp decline, I would expect that sharp decline to show up in revenues. Here are the revenues (and free cash flows) for 2006-2010 (in $millions): $2041 ($251), $1913 ($74), $1729 ($81), $1526 ($189), $1642 ($233).

    Clearly there is a downtrend in revenues. I believe some of that is explained by the recession, customer purchasing power, and increased competition. Some could well be from a decline in Titan lines revenue too, but it doesn't look to be falling off a cliff.

    Hope that's helpful.
    Jun 11 08:44 PM | Likes Like |Link to Comment
  • Tellabs: Cheap Like Cisco, But With Better Downside Protection [View article]
    I've only been a Tellabs investor since Monday (June 6). I've taken a look back at the last 5 years' annual reports to get an idea of what has brought the share price down. First, 2007 was a market peak and most stocks are down modestly since then. Specifically for Tellabs, the extra downdraft seems to have come from two factors. There has been some consolidation among their customers (e.g., Verizon buying Alltel in 2008) that has given the customers more pricing power. Also, their business has become more competitive. Cisco has suffered under the same competitive pressure as Tellabs. I don't believe that the business for either is in decline, but competition has made it less generously profitable for both.

    I think it's important to remember that changes in stock price are a function of changes in the business and changes in sentiment. Some of the price decline since 2007 is a result of a less favorable business environment, which makes the business less valuable. Some of the decline (I believe) is a function of unjustified sentiment, which makes the stock cheaper while the business is still quite valuable. The cash simply puts a floor under that value. Is the stock price cheap relative to the business value? That is the question we have to answer for ourselves before we invest.

    I believe the answer is yes.
    Jun 11 01:57 AM | 3 Likes Like |Link to Comment
  • Tellabs: Cheap Like Cisco, But With Better Downside Protection [View article]
    You make good points. That's how a seeming "value company" becomes a "value trap". I don't think that's the case with TLAB. The smart mobile internet initiative is not a new business for them. It is just the next generation of their current products, optimized for the smart data management. And their international presence isn't new either. They've been active internationally for several years.

    As for having 70% of their share price in cash, the cash on their balance sheet hasn't changed markedly over the last 5 years or so. It's just that their market cap has come down so much that it's in the same ballpark as their cash.

    That's not to say that your "value trap" fears couldn't become reality, but given the trajectory so far, I don't think it's a particularly great risk.
    Jun 10 09:22 PM | 1 Like Like |Link to Comment
  • The Future of Handset Gaming May Well Be Sensation [View article]
    Interesting. Could you comment on how strong their IP position is in haptics? Are there other systems available for game developers to license? I notice IMMR is focused on Android, and I'm not seeing anything about the iPhone/iPad. Is that because Apple has their own haptic system, or is it something else?

    Also, I notice they had a profitable first quarter this year after several years of losses. I assumed that meant they were seeing growth, but their projections for 2011 suggest flat-to-lower revenue for the next 3 quarters relative to Q1. Any comments on that lack of growth?
    Jun 7 01:54 PM | Likes Like |Link to Comment
  • Careful Analysis Reveals Good Probability of Large Gains for Vical [View article]
    I'm sorry, I really don't understand your criticism. I've included a link to a Conaccord Genuity analyst report with a good valuation analysis that suggests an $8 price target based on a 25% chance of success for A-7 (and no value for any other VICL assets). With that as a starting point, I make scientific arguments as to why the probability of success is much higher than 25%. If the probability of success is higher, the probability-adjusted present value of the stock is higher. Is that "ordinary"? Okay.

    And as you can see disclosed above, I am long VICL, and I plan on holding at least through the release of the A-7 study results. Sadly, I am not nearly influential enough to move stock prices with my articles. I write my articles to help others who are interested, and so I have a record of my own investment thesis when I'm looking back on how the investment performed.
    Jun 6 04:22 PM | 2 Likes Like |Link to Comment
  • Depomed: Light-Risk Small Pharma With Huge Potential [View article]
    One the CEO turnover, check my comment above, posted April 22, 11:07 AM.

    I actually think my Gralise sales estimates are pretty conservative. It's a very large market, Gralise is arguably better than any product in that market, and my estimates only require them to take 15-20% market share. As for marketing muscle, I don't think Endo Pharmaceuticals is famous for their muscle and they did annual sales of ~$750 million for their comparable product.
    Jun 5 01:48 PM | Likes Like |Link to Comment
  • Careful Analysis Reveals Good Probability of Large Gains for Vical [View article]
    Feuerstein doesn't claim there was data missing from phase 2. He just decided to ignore the data since there was no control arm. (Not running a control in a cancer phase 2 isn't unusual.) In my article, I use several different historical control studies to show that A-7 has better outcomes than all the historical controls on all measures. Feuerstein is alright sometimes, but he has a tendency to give authoritative opinions on topics without doing enough research. A little like Jim Cramer, but not as bad.
    Jun 2 03:21 PM | 1 Like Like |Link to Comment
  • Careful Analysis Reveals Good Probability of Large Gains for Vical [View article]
    The SPA (special protocol assessment), by law, means that the FDA has reviewed the trial design and believes that positive results in the trial would justify approval of the drug. Your opinion of the trial design carries no weight with me.

    You're right that A-7 failed earlier trials where it was given at lower doses. Dose levels will make the difference between efficacy and lack of efficacy for any drug.

    And I did not say I expected a 700% gain on approval. If you look closely, I said that a reasonable price target upon the announcement of favorable phase 3 results would be roughly $32. That's >700% appreciation from today's price levels, and it would give them a $2.3 billion market cap. Seattle Genetics is a good rough comparison. They have their good trial results, but they don't have FDA approval yet, and they have a $2.2 billion market cap.
    Jun 2 11:03 AM | Likes Like |Link to Comment
  • Careful Analysis Reveals Good Probability of Large Gains for Vical [View article]
    Please provide details and sources backing up your claims. I know of no such allegations.
    Jun 2 08:28 AM | 1 Like Like |Link to Comment
  • Careful Analysis Reveals Good Probability of Large Gains for Vical [View article]
    You make a fair point. If Allovectin-7 fails, I don't think you'd likely be stuck with a 75% loss, but I would expect a fall to $1 or thereabouts temporarily. Vical would still have good prospects, but they would have to endure investor disfavor and raise dilutive cash to advance the rest of the pipeline. Ultimately, the investment could still work out, but it would be tough in the short term, and the payoff would be longer term and more modest.
    Jun 2 01:01 AM | 1 Like Like |Link to Comment
  • Imperial Sugar: A Phenomenal Quarter Creates a Sugar High [View article]
    A lot more than that, I would guess. The option is to purchase at a fixed multiple of Wholesome's earnings. Those earnings have been growing very quickly (EBITDA up 43% in 2010), so the value of Wholesome has probably more than doubled since July 2008.
    May 12 03:51 PM | Likes Like |Link to Comment
  • Depomed: Light-Risk Small Pharma With Huge Potential [View article]
    They haven't announced when they're going to report earnings yet. I don't have a precise estimate for their Q3 earnings, but I'd guess a few cents/share of "normalized" earnings, and around $1.67/share number for GAAP earnings. The $88 million they received from Abbott this quarter comes to $1.63/share, and I assume that will all go to earnings this quarter since the agreement between ABT and DEPO has been terminated.
    Apr 25 04:53 PM | Likes Like |Link to Comment
  • Depomed: Light-Risk Small Pharma With Huge Potential [View article]
    Glumetza has been approved and on the market for several years without any mention of digestive problem side effects. Gralise was also approved without any mention of such side effects. Those are the facts. As to why, here's my best guess: The pills, like similar-sized pieces of food, are churned by the stomach, aiding digestion and preventing obstruction.

    As for what happens to the pills, this is from Depomed's 10k: After drug delivery is complete, the polymeric tablet dissolves and becomes a watery gel, which is safely eliminated through the intestine sight unseen.
    Apr 24 05:11 PM | Likes Like |Link to Comment
  • Depomed: Light-Risk Small Pharma With Huge Potential [View article]
    I need to correct myself here. DEPO getting orphan drug status for Gralise in PHN would not keep Horizant out of that market. Nevertheless, I've seen nothing about phase 3 trials for Horizant in PHN.
    Apr 22 04:51 PM | Likes Like |Link to Comment
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146 Comments
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