Entering text into the input field will update the search result below

ZIOP: Finally It Is All Coming Together!

Nov. 09, 2015 2:44 AM ETPGEN, TCRT3 Comments
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Successful investing is a combination of fundamental analysis, technical analysis, some luck and lots of patience...did I say patience? Yes, tons of patience...especially if you know you have found the proverbial "diamond in the ruff."

My story with ZIOPHARM Oncology (ZIOP) started with luck...A good friend, who was one of the original seed investors in Halozyme (HALO) turned me on to HALO and through that investment I discovered Randal Kirk which then led me to ZIOP...My first foray into ZIOP went terribly wrong and my entire CALL position went poof when the company abruptly terminated clinical trial of its lead Phase 3 drug, Palifosfamide, four days before my 55th birthday...talk about a birthday present...what was especially surprising is that its PnF chart was looking absolutely prime for a breakout and instead the chart just broke down and in a nano second, poof went my CALL bet...Because I lost a lot of money, I kept an eye on the company's new pivot towards synthetic biology, hoping to someday recoup my considerable losses...

Those who have been following my blog for sometime know that even though I spend considerable bandwidth talking about stock charts and technicals, I spend equal if not more time doing good, old fashioned fundamental research...I believe that having the ability to read charts is hugely helpful in not only getting a good grip on the overall health of a company's stock...and when coupled with good fundamental analysis, it helps stack the odds in my favor...even with all the copious analysis, once I have found that one in a million stock with massive potential, I need to be super p-a-t-i-e-n-t because through experience I have learnt that good stocks tend to test my patience to the absolute nth degree...

And ZIOP has been no different...

Let's evaluate the stock's performance since January 26th, 2015, when I wrote my first blog post on the company titled, Ziopharm is the Stock to Watch!

First, the Bad News:

Since that first post almost 10 months ago, the stock has almost doubled in price.

Ok, I lied...

I can't help it that I have the tendency to exaggerate a little...

The stock is only up a measley 89%...

:(

What? The stock is up 89% in less than 10 months and I call that bad news??? Have I lost my marbles???

Honestly, having diligently connected the dots and also counted 101 reasons why ZIOP's stock price could've and should've been higher, way higher, its below-my-expectations performace to date had me flummoxed...and only recently did I notice the veil that had kept the company shrouded in mystery and thus preventing its stock price from reaching its full potential...

Wink...Hint: The links in the above paragraph will lead you to good, old fashioned, due diligence on the company. I strongly recommend that both old and new investors may wanna take the time to read those posts to help understand why ZIOP is such a compelling, investment opportunity...

Now, the Good News:

Starting tomorrow, Monday, November 9th, 2015, and continuing over the next several weeks, that veil will start lifting in earnest when the new ZIOPHARM, under its new CEO, Dr. Laurence Cooper, will serenade us with a cascade of data releases...tomorrow's data, in the form of an abstract on its multi-center, Glioma clinical trial, will be the first of many that will be released over the next few weeks and months for public consumption and will be formally presented at the Society for Neuro-Oncology Annual Meeting to be held in San Antonio from November 19th thru the 22nd. What is especially interesting, and intriguing, is that this abstract is based on data collected from a Phase 1 trial that enrolled its very first patient barely 5 months ago and it is common knowledge that the purpose of Phase 1 trial is to analyze the tested drug's safety, not its efficacy...so why the rush to present data from a limited run Phase 1 trial? The only explanation that makes sense to me is that the drug must have shown such impressive efficacy on patients who have very limited options available to help extend their lives beyond a few precious months that Dr. Cooper could not wait to share this information with the world...Of course, I could be completely off base with my conjecture...either way, we should know the answer in a few hours...

This will be Gretzky's, oops, I mean, Cooper's first shot on goal since he took over the helm of Team ZIOP...however, by no means will it be his only shot. He has made it very clear that he will be attempting many more shots on goal, including one in the next couple of weeks when 2 abstracts that have been accepted for poster presentations at next month's San Antonio Breast Cancer Symposium on ZIOP's Phase 1b/2 clinical trial for the treatment of patients with locally advanced or metastatic breast cancer, will be released.

And let's not forget Intrexon's first ever Investor Day meeting is this coming Thursday, November 12th and it will be webcast live! Having observed Randal Kirk's modus operandi over the past couple of years, I have to believe he must have at least a couple of aces hidden up his sleeve that he plans to reveal and thus ensure that his first ever Investor Day is a rip-roaring success for the invited guest investors and also the thousands of investors in XON and its ECC partner companies watching the live webcast...and being that he is on record saying that "in health we're smokin' hot," what could be a better venue than his first ever Investor Day meeting to prove that there's more to that rhetoric than just hot air...

After keeping everything under wraps for the last 10 months, Cooper is finally ready to release data from the various clinical trials to prove that ZIOPHARM is at the forefront of immuno-oncology research...And if my read is right and ZIOP is indeed the leader in this white-hot space, then its market cap should quickly catch up, and surpass both JUNO's and KITE's market cap(s) within the next 12 months...if not sooner!

The one risk that investors in almost all, pre-revenue stage biotech companies have to contend with is their constant need to raise money for research by printing new shares and thus dilute existing shareholders...According to its most recent quarterly report, ZIOPHARM has more than $160 million in cash and zero debt. This horde of cash should last the company till the first quarter of 2018...Additionally, ZIOPHARM, along with its ECC partner, Intrexon, has an arrangement with Europe's Merck Serono whereby Merck Serono will act as the company's ATM of sorts for any new research project that ZIOP may want to undertake against other cancer indications, eliminating the need for the company to constantly issue new shares to raise capital. I cannot overemphasize the level of comfort this somewhat unique arrangement that ZIOP has with Intrexon and Merck Serono, provides to existing and new investors in ZIOP...

Technical read of ZIOP's Stock Chart: The stock has a very formidable resistance around the $14 mark that dates back to March of this year...Three times the stock has tried to break through and each time it has been pushed back...On Friday, the stock tried very hard to print $14, but could only manage to make it to $13.96 before being pushed back by a wave of selling...Based on its PnF chart, in order for ZIOP to break through the $14 resistance, it will need to print $14.50...I believe that on this fourth attempt, it will be successful...

ZIOP closed this past week @ $13.70...If Monday's release of its Glioma abstract is as impressive as I suspect it to be, then it is quite conceivable for ZIOP's stock to catapult above the $14 resistance and open tomorrow's trading session above $14.50...should it do so, then that should result in a wave of buying by the large number of shorts and that could easily and very quickly drive the price towards $18-$20 mark...If the abstract is somewhat ho-hum then the price may pull-back down to around $13 or so, before stabilizing and then strengthening to attack the $14 resistance again..Absolutely worse case scenario, the stock may take another week or two before printing the magic number $14.50 leaving the stock with nothing but clear blue skies up ahead...

While we await the stream of data, let me take a minute to see which horse the market is betting its money on...a year-to-date comparison between the three main players in the immuno-oncology space, i.e.JUNO, KITE and ZIOP is a fair way to measure the market's sentiment:

Juno: Closing Price on 12/31/2014: $52.22 Closing Price on 11/6/ 2015: $49.69 Perentage Change: -4.8%

KITE: Closing Price on 12/31/2014: $57.67 Closing Price on 11/6/ 2015: $73.77 YTD Perentage Change: +27.9%

ZIOP: Closing Price on 12/31/2014: $ 5.07 Closing Price on 11/6/ 2015: $13.70 YTD Perentage Change: +170%

There is no comparison...ZIOP by a mile and a half!

Finally, from my The Chuckle that Lifted the Veil post, I will again show slide 11 of Dr. Cooper's presentation at the Wells Fargo Healthcare Conference , along with his direct quote explaining the slide:

Slide #11: (The Blood / Brain Barrier Slide shown at the 11:50 mark):

(click to enlarge)

"So I think one of the take home points for the community to look for as these data are revealed is this bullet point at the top and that is really this important question: Does the oral drug cross the blood brain barrier? From our mouse models we have every expectation that it would occur and it is part of our commentary later in the year in Q4 we will talk about that data in the human environment. The reason that's important is of course that if it doesn't occur, then the local injection of the adenovirus may not receive the activating signal so obviously that is an important part of the story and it has a corollary…and the corollary is that we are also interested in delivering T-Cells that might be targeting brain tumors and you can imagine therefore that this T-Cell would need to see the oral ligand if its immune privilege in situ, or essentially in the brain. So just to alert you essentially to some of the data that will be coming out in the next few months..."

ZIOP will present the most uptodate data from its currently ongoing Phase 1 trial in its poster presentation at the SNO in less than 2 weeks!

No matter how I slice it, between now and end of the month, ZIOP should notch multiple, all-time highs...and based on the stock's past chart pattern, I can see ZIOP in the $20s by the end of the year, if not by the end of this month...(!!!)

Nothing but very exciting times ahead...

karim

DISCLAIMER: All postings made here are strictly for my personal record keeping and in no way, shape or form, am I even remotely suggesting others to follow my Buy and Sell moves. Trading options is definitely not for the faint of heart as one's portfolio can move up, or down, anywhere between 10%-30% during a single trading day. Feel free to follow my progress here, but PLEASE do not follow my moves. However, if, in spite of all my exhortations, should you decide to do so, be advised that you, and ONLY YOU will be responsible for any losses that you may suffer...In other words, the onus is strictly on you. On the other hand, if the move(s) result in a profit for you, I am open to discussing a split.

Analyst's Disclosure: I am/we are long HALO, XON, ZIOP.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You