Seeking Alpha

SeekingValue

 
View as an RSS Feed
View SeekingValue's Comments BY TICKER:
Latest  |  Highest rated
  • Nanosphere's Extraordinary Growth Potential in Medical Diagnostics [View article]
    The Plavix testing is most definitely not small potatoes. It's a $6.6 billion drug with a black box, life-or-death warning strongly recommending testing before Plavix use. And after Plavix goes generic this year, Plavix plus the test will be much cheaper than the Plavix alternatives that don't require testing. That will be a heavily used test.
    Jun 24 01:07 AM | Likes Like |Link to Comment
  • Nanosphere's Extraordinary Growth Potential in Medical Diagnostics [View article]
    In the smaller biotech space, stock price reactions can sometimes be waaaay out of proportion to the events that cause them. It can be unsettling, but it also creates good buying opportunities.

    I'd guess the Plavix test will now be approved roughly March, 2012, give or take a month or two.
    Jun 23 06:56 PM | Likes Like |Link to Comment
  • Nanosphere's Extraordinary Growth Potential in Medical Diagnostics [View article]
    No question, it's still reasonably risky. You don't get the potential for 600% upside without taking on a significant amount of risk. However, having 2-3 years worth of cash in the bank helps buffer the downside. Having FDA-approved products reduces technological risk. The only real risks that remain are execution risk and competitive risk. Not that those risks are insignificant, but they're pretty standard for any business, while the possibility of a 600% return is far from standard.
    Jun 23 06:46 PM | 1 Like Like |Link to Comment
  • Building a Biotech Portfolio With High Potential Returns, Modest Risk [View article]
    Yes, PTIE has the first catalyst of my portfolio, hopefully with Remoxy approval tomorrow. Pfizer has mentioned that there might be a minor delay (days or weeks) based on some sort of manufacturing issue. A delay might lead to a modest sell off, which might provide a good opportunity to start or build a position. A delay would not imply a lower chance of approval.
    Jun 22 06:13 PM | Likes Like |Link to Comment
  • 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
COMMENTS STATS
150 Comments
126 Likes