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assetman07

assetman07
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  • Is Now The Time To Buy Merrimack Pharmaceuticals? [View article]
    For the most part, you provide pretty solid analysis of the Merrimack story.

    But... it's really not complete. Specifically on MM-121, these so-called Phase II studies were never designed to be "successful" on the first go-around at all. The purpose for the initial Phase II studies was to identify the specific biomarkers that would generate a screen to segment to a population that would most likely repond to the MM-121 therapy. Merrimack is just entering into the clinicals on these screened out, biomarker-identified patients. Yet I really didn't see the subject addressed at all in your commentary.

    As for Sanofi, there are many, many reasons why a company this size would put a halt to a development collaboration. Perhaps the most logical one is that Sanofi would have liked to have had a drug candidate with a larger addressable market for a specific cancer therapy-- and perhaps they found one, either organically or inorganically. But it could be what you suspect, as well. Interestingly enough, Sanofi has yet to sell any MACK shares post the announcement, and that's after dumping in millions in R&D capital for the cause. That's not to say they will do so at a later date, though.

    Investors should look at MM-121 as multiple shots on goal... but even with possible approval(s), the addressable market may be smaller than some expect. One can counter that by (1) charging the patient/clinic for the biomarker screening; and (2) charging a higher price per MM-121 unit... though the latter implies the drug better be very effective and very safe.

    As for MM-398, well... we will see what the FDA decides. From the oncologists I talk to, the NAPOLI-1 data are pretty darn compelling. The increase in OS and PFS doesn't sound like much on the surface... but we are talking about pancreatic cancer, a very fast spreading disease that is very hard to slow down. I think especially in the case of specific fast-spreading cancers, it appears that the FDA panels have been pragmatic enough to understand the context of the capabilities of a drug in the to environment in which it operates. Though, admittedly, this will be another test.

    In terms of when you buy MACK, I'm puzzled on why you would wait. Directors of the company are buying a buckload of shares in the open market (even post NAPOLI-1) while short sellers are pulling on a rubber band that could snap at literally any moment in the form of a giant short squeeze. The real question is... who do you want to follow? Short sellers? Or directors? Which party appears to have the better pulse on what is actually going on? If you recommend buying AFTER the FDA approves MM-398, you are leaving quite a bit of potential gains on the table.

    What is fair to say is that after MM-398, the prospects of MM-121 are basically lopsided coin flips, as Phase III data in stratified/screened populations should be rather positive (otherwise, why go further?). Still, efficacy hurdles could be steeper here, and the addressable populations could be smaller than some want.
    Jul 8 12:37 PM | 5 Likes Like |Link to Comment
  • Ukraine Crisis: A Decision That May Have Sealed The Fate Of The EU [View article]
    I don't know the political and ethnic context entirely, but the author appears to make some very valid points here.

    The aggressive actions that Putin/Russians are taking to Ukraine's sovereinity is not really in doubt-- rightly or wrongly. What the EU can actually do about it-- either militarily or through economic sanctions-- is certainly in doubt.

    Perhaps the best outcome of all is getting Ukraine working quickly toward monitored, legitimate elections. The hope would be that the new leadership apparatus there would take the steps to formally embrace recogniton of ethnic minority rights-- though, regretfully, that is far from a guaranteed outcome.

    During this transition, the EU could certainly use the time to think through the consequences of their seemingly blinding support for the new interim Ukrainian leadership structure. With such a large minority population and a resource rich "parent" sitting literally next door, I think if I were the EU, I'd tread very carefully and consider the unintended consequences of moving too quickly on the political front.
    Mar 3 05:37 PM | 2 Likes Like |Link to Comment
  • Evans: Taper could come next month ... or maybe next year [View news story]
    They are going to continue to put it off... all in the hopes of establishing some type of 'escape velocity' in the economy that hasn't to this point-- and will likely never occur.

    Has anyone in the mainstream press come close to noting that the economic growth projections from the Fed have been constantly revised downward-- despite all the open-ended monentary accomodation??? It doesn't appear to be the case.

    Given that pattern, people should openly wonder whether QE is truly delivering on its intended economic effect-- which, by the persistently downward revisions from the Fed itself-- is woefully missing the mark.

    If the Fed really wanted to spark economic growth and create inflation, they would have taken away IOER a long time ago and forced the banks to lend into the fractional reserve system (in other words, force money velocity to move higher). All that QE is doing effectively is artificially inflating paper assets-- regardless of whether those assets are creating any real economic value.
    Sep 27 10:34 AM | Likes Like |Link to Comment
  • Seeking Alpha fires a shot at Bloomberg, StreetAccount [View news story]
    Agreed. The bullet points are a little stupid. Please dont' be "just like" Bloomberg or StreetAccount.
    Jul 29 10:45 AM | 2 Likes Like |Link to Comment
  • Rentech: An Undervalued Special Situation Investment [View article]
    If the company is still doing PIPE deals, I'd be running the opposite direction. They should have cut and run on the alternative energy plan a decade ago.
    Jul 4 12:31 AM | Likes Like |Link to Comment
  • Jamie Dimon is threatening to leave JPMorgan (JPM) if stripped of the Chairman role, sources say. [View news story]
    I think the statement by Dimon is almost irrelevant-- he will be elected to the Chairmanship regardless, as it appears he has secured enough large shareholders. Given that knowledge, it's pretty easy to make such a bold statement.

    I'm pretty sure this subject was brought up for vote by a shareholder... so those who think there is something going on within the board to force Dimon out are just wrong. Proposals to separate Chairman and CEO roles have been fairly common occurrences the past few years, so it shouldn't be a surprise that such a vote was coming to JPM.

    As a practice our group on voting for separate people for CEO and Chairmanship roles as a rule-- for the simple reason that an independent Chairman is much more likely to provide proper checks and balances on the executive team. In the case if JPM, we actually did vote to split the two roles, even though we did not expect the vote to eventually pass.

    There's little doubt in my mind that Jamie Dimon is a great CEO. But by doing so, he becomes only a so-so Chairman precisely because he wants more control and less oversight. Now, that has indeed served investors well though the years... but JPM has earned some black eyes in terms of reputation as well.
    May 12 03:53 AM | 1 Like Like |Link to Comment
  • Jeffrey Lacker is sticking to his original allegation made in the summer of 2007, as storm clouds gathered over the world's financial system, that then-New York Federal Reserve President Timothy Geithner allegedly informed the Bank of America (BAC) and other banks about the possibility the central bank would lower the discount rate. According to transcripts of the call released by the Fed on Friday, Geithner at the time denied that banks knew the Fed was considering making any cut. Despite the inherent questionability of his actions however, its still not clear if the disclosure would have been illegal. [View news story]
    That explains why the Fed wants to stay opaque for as long as entirely possible.... gotta let those statues of limitations expire.
    Jan 19 07:46 PM | 1 Like Like |Link to Comment
  • At $28K a vial, Questcor's (QCOR) Acthar has propelled shares to huge gains. QCOR bought the drug for $100K in 2001, planning to produce it only to treat infantile spasms. But thanks to aggressive marketing, it's now being prescribed for MS, arthritis, and kidney disease. Aetna's (AET) decision to limit off-label treatments has hit shares, but it's not clear any viable alternatives are on the horizon. (NYT[View news story]
    Michael... to be sure, there are guidelines the FDA uses for generic biologics. In many cases, full fledged studies are required to prove bioequivalence. That's one of the primary reasons why Acthar has been such a challenge, despite it being "off patent". Proving bioequivalnece for Acthar has been very difficult... and with such a narrow market, potential competitors are reluctant to enter.

    As for the issue with price gouging, there are literally dozens and dozens of drug therapies out there that serve very small patient populations and priced in a similar way. One drug that comes to mind in Cinryze, a drug used to treat heriditary angiodema attacks (produced by ViroPharma). A few weeks use of that drug usually runs in the range of $75k to $125k.

    I think the problematic issue with QCOR is what they are doing with the profits. While they could easily acquire an emerging R&D pipeline, or invest internally in their own, they prefer to harvest Acthar for all it can. And I don't think that will serve their best interests in the long run, for a number of reasons.
    Dec 31 10:44 AM | Likes Like |Link to Comment
  • At $28K a vial, Questcor's (QCOR) Acthar has propelled shares to huge gains. QCOR bought the drug for $100K in 2001, planning to produce it only to treat infantile spasms. But thanks to aggressive marketing, it's now being prescribed for MS, arthritis, and kidney disease. Aetna's (AET) decision to limit off-label treatments has hit shares, but it's not clear any viable alternatives are on the horizon. (NYT[View news story]
    I don't think there are any uncertainties in any investment, Scott.

    But the mere suggesstion that what QCOR is doing in the marketplace is a "scam" is just ridiculous. QCOR is providing a therapy for a very narrow segment of the patient population, and they are pricing it in a relatively free market. Government and private insurers are paying for it. If you happen to find the "scam", I'm sure those entities are more than willing to listen.

    I think the real risks behind QCOR are not really what people are focusing on today. If you are getting massive profits from a one drug wonder where the patents have already expired-- you better start making the upfront investments in R&D to significantly broaden your product pipeline.

    To that end, it appears that QCOR management is content on milking the Achthar golden goose as much as they possibly can in the near term. And i think that ultimately becomes a big mistake.

    In the meantime, QCOR will continue to be a very profitable company that will remain a favorite targets for shorts. This stock can be pumped higher on fundamentals alone-- and it will continue to be exposed to short sellers willing to find a nugget or two that can challenge the business model.
    Dec 31 10:27 AM | 1 Like Like |Link to Comment
  • At $28K a vial, Questcor's (QCOR) Acthar has propelled shares to huge gains. QCOR bought the drug for $100K in 2001, planning to produce it only to treat infantile spasms. But thanks to aggressive marketing, it's now being prescribed for MS, arthritis, and kidney disease. Aetna's (AET) decision to limit off-label treatments has hit shares, but it's not clear any viable alternatives are on the horizon. (NYT[View news story]
    Just to be clear... if Medicare is reimbusing a drug, despite what you consider is "too expensive", they are doing so under no legal challenge whatsoever. Your opinions on the cost of the drug should be directed at the parties that are willing to pay the price for it.

    If managed care is reimbursing the drug, which they are under increasingly higher hurdles, they are also doing so under their own guidelines. Perhaps your arguments should be direct there as well.

    If one wants to take a moral stance on drug pricing for Acthar-- that is fine (I think there are literally dozens of other drugs that meet that criteria). But the legal and economic arguments have all fallen short of the mark.

    I think there are a whole lot of interested parties hoping that there is either a valid legal challenge on the horizon, or something on the R&D front that will force some competiton in these niche markets (whether its a generic equivalent or a branded drug). But until one gets to that point, QCOR will be a very profitable company-- with a whole lot of short sellers pumping and then dumping the stock.
    Dec 31 10:10 AM | Likes Like |Link to Comment
  • At $28K a vial, Questcor's (QCOR) Acthar has propelled shares to huge gains. QCOR bought the drug for $100K in 2001, planning to produce it only to treat infantile spasms. But thanks to aggressive marketing, it's now being prescribed for MS, arthritis, and kidney disease. Aetna's (AET) decision to limit off-label treatments has hit shares, but it's not clear any viable alternatives are on the horizon. (NYT[View news story]
    Here's the deal with Acthar.... perhaps besides for infantile spasms, the drug is used as a last line of defense in dealing with inflammatory indications. There are literally dozens of corticosteriods that could be used to treat these conditions-- and Medicare and managed care make well sure they are used first in therapy.

    When these don't work, then there is little available in the market that can address these flares. Questcor is pricing based on supply/demand factors-- when there is a viable product that can compete after corticosteriods, then the price will go down.

    Questcor tried at one time to use Acthar as a first line of defense in several inflammatory diseases-- and almost went bankrupt because they couldn't compete directly against corticosteriod alternatives.

    The pricing keeps the company viable. The risk is that there's another viable alternative in 3rd line therapy-- or if someone else figures out the biologic makeup of the drug and start making generic Achthar vials. This is literally a one-hit wonder for the company... which should really make one think.

    Managed care providers have every right to make the case for Acthar therapy a bigger uphill battle... and they are doing it. Interestingly enough, it isn't stopping patients who are really needing the therapy from getting it.
    Dec 30 04:56 PM | 2 Likes Like |Link to Comment
  • Prepare To Short Gold [View article]
    I'm in general agreement with you on volatility suppression. Between that and monkeyhammering the ES in after-hours is probably the central bankers best bang for the buck in keeping the markets in levitation.

    I don't know if politicians are too weak to implement smart regulations moreso than being willing to actively commit the political capital to enforce those regulations. Corporatism is a pretty nice windfall for a politician to do nothing... well, at least until social unrest hits the fan.
    Dec 7 10:51 PM | 1 Like Like |Link to Comment
  • Prepare To Short Gold [View article]
    What I think is interesting the that the commitment from large commercial traders can turn on a dime... so who really knows how they're positioning for the next turn?

    The global monetary environment is one where its not just one country debasing its currency-- its that most the developed world in a race to debase. We could certainly more downside in gold here in the near term due to technical considerations. But the cumulative effect of more fiat creation will erode confidence in those affected currencies. That's precisely where gold serves as a viable alternative.
    Dec 7 02:31 AM | 3 Likes Like |Link to Comment
  • The Keynesian Depression [View article]
    You're right... the closer analogy to the current US situation is 19th century England. In the end, it didn't turn out too well for the Brits, as the age of possessing the worlds reserve currency was effectively eroded over after years and years of issuing (and not fully paying back) primarily non asset-backed debt.

    You are exactly correct on one very important point, though-- a Gold Standard is no panacea. Pegging currencies to real assets takes away from any flexibility that could be needed to proactively deal with economic challenges. A more rational approach would be to develop a framework for a financial system that is primarily asset-backed-- yet allows for a degree of flexibility within workable constraints (i.e. limits on leverage, etc.).

    What's potentially dangerous, though, is to foster a financial system that is solely based on intangible "full faith" promises of a government and central bank with little accountability and no constraints. Yet we seem to be content on doing just that. It takes time, but without major structural reforms, we know how this story ends as well. It's not Weimar Germany, but risking one's reserve currency status isn't a terribly great outcome, either.

    At this stage, we have to "trust" that our monetary leaders will respond with a good degree of discipline if the ill-effects of current policy get out of hand. To that degree, the Fed has already loosened their views on what "price stability" really is. That doesn't make me sleep too well at night.
    Dec 4 11:57 PM | 6 Likes Like |Link to Comment
  • Frustrated with the lack of substantial job gains, the Fed is likely to continue buying both MBS and Treasurys in 2013, says the WSJ's Jon Hilsenrath, meaning he believes a new QE is soon to be imposed to replace the expiring Operation Twist. Stocks move to new highs for the day, the S&P 500 +0.7%. Beige Book earlier. [View news story]
    This really isn't new news, though. The doves in the FOMC have been suggesting as much since the last QE announcement.

    I wonder out loud, however, if "powerful" really means what you think it means.

    I think we are going even deeper into uncharted waters, where the powers that be have no idea on the unintended consequences of cumulative QE actions and extended ZIRP.

    In that respect, I agree that this next round of added QE will indeed be more powerful.

    On the other hand, it is becoming painfully clear that each new round of unsterilized QE has resulted in diminishing returns to overall economic growth.

    It will be effective in cheaply financing next year's government deficit, however. And it will bring back some jobs in the housing sector that would have otherwise disappeared due to structural imbalances.
    Nov 29 02:19 AM | Likes Like |Link to Comment
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