Port 24 update and other news

First some news ...

I have not decided exactly how or when, but I am going to switch out my Port24 (fake money, albeit serious thought) holdings for one of my real life IRAs. It is getting to be too much of a headache to actually manage another portfolio that does not immediately affect my new worth.

This is sad for one specific reason: this was the one portfolio where I tried to focus as exclusively on covered calls as possible. I see that as "safe", even with the priority on pre-earnings biotechs. On the plus side, you'll get to see exactly how I think and react on stocks I own and am thinking about. I do not think I will go to the lengths of posting every move before actually trading; it is my real money and sometimes I will want to make the trade ASAP. I will think more about this over a few weeks and let you know. Feedback is ALWAYS welcome.

Dendreon announced another BIG hiring this morning. Varun Nanda has joined the management team as SVP of Global Commercial Operations. Mr. Nanda comes from Roche/Genentech, where he brought Avastin into commercialization.
I do not see a Rest Of World partnership for Dendreon anymore... with Mr. Nanda and Hans Bishop on board they look ready to market Provenge themselves, worldwide. May 1, and probable Provenge approval, is less than a month away!

Port24:

A fair amount of movement this morning!
I sold 1500 ALTH ($$8.36) and 1000 MELA ($7.32), while buying 500 more Dendreon ($39.11), 7000 PZG ($1.44), and 3500 VICL ($3.45). I sold 29 $5 Jul calls against ARNA, and 5 Apr $40s against the DNDN.

Allos had a nice couple days this week, adding almost $1. It is time to take the gains. I *think* they will have great news in Q2, from an ongoing trial, but in biotech, you take some off the table when you get some gains. I had bought these at $6.68 in October 2009, and sold some calls against them, so I definitely had a winner here.

MELA is the opposite, although I sold so many calls that the loss is not as bad. The FDA delayed their application by 180 days recently, and it fell 20%. I may just get back in, later, but I see this as "dead money" for 3 months.

The 500 Dendreon is just a 8 day play for the almost 3% of option premium. I'd LOVE for Dendreon to close on 4/16 under $40 so I can keep the shares, though!

ARNA will have it's FDA PDUFA date on October 22. The July calls net me a little premium (6% for less than 4 months) while I wait. And heck, with the stock at $3.16, if I "lose" them at $5 I will not be crying!

The two new buys are VICL and PZG.
PZG (Paramount Mining) is a black sheep here, being neither a biotech, nor optionable. A gold exploration company, it is strictly a 2-5 month buy for straight-up capital appreciation. I will talk about this one more later, suffice it to say I have some in my real money IRA as well.
VICL (Vical) has a great pipeline and should have some news in the summer/fall that will allow me to sell some $5 or even $7.50 calls later in the year for some juicy premiums.

That makes the Port now worth $130,206, or a 30% return. Annualized, it is only 15.9%, well shy of my target. On the plus side, the S&P and Nasdaq indices have annualized returns over the same period of -6.75% and 9.5% respectively, so I am beating them. In a month and a week, the Port turns 2!

Regards,
Trond

Port Update

Sold the 4000 GNVC, as planned yesterday, and at $2.88. It is higher today, and it killed me to do it, but I really do want stocks that can have calls sold against them, in the Port. I mostly want to make money here, so if I see something enticing enough, I will buy non-optionable stocks, but the ground rules are there for a reason!

I looked at the other holdings of the Port this morning and nothing appeals to me in terms of selling calls. I have a bunch of cash, and Oncothyreon (ONTY) happens to be a watchlist stock that had bad news this morning. I bought 3,000 shares at $3.41 (and 1k in my real-world IRA at $3.45, earlier) - I'll let the share price shake out a little and then sell calls against them.

So now the Port is comprised of

2000 AOB
2000 NBIX
1600 ELN
400 DNDN
4900 ARNA
2500 SGMO
1000 MELA
200 AMAG
1500 ALTH
3000 ONTY
with $21,585 of cash.

I'm at a 30.8% return in nearly two years, a 16.6% annualized rate. The S&P 500 over that time has returned -7.3% and the Nasdaq has returned 9.3%.

Regards,
Trond

Port 24 and assorted biotech news

Port 24 update:
The only January options I had sold were 10 MELA $10 calls, and they were exercised, with the stock at $11.05 last Friday.

With that cash, I bought 300 more Dendreon shares today, and sold 3 Feb $32 calls against them for $0.89 per share.
I am living by my resolution to be a little more active in the Port! I also sold the following calls today:
16 ELN March $9s for $0.30
15 SGMO Feb $7.50s for $0.25
10 MELA Feb $12.50s for $0.20
2 AMAG Feb $55s for $0.50

I almost sold calls against ALTH - but I feel there is a little more room beneath the stock before selling calls. AOB needs to climb closer to $5 to make it worth selling calls, and NBIX at $2.50 is not satisfactory to sell the $2.50s, and the $5s are not worth anything yet.

The Port 24 thus has the following stocks (covered calls in parentheses)
1500 ALTH
200 AMAG (2)
2000 AOB
4900 ARNA (24)
700 DNDN (3)
1600 ELN (16)
1000 MELA (10)
2000 NBIX
2000 PGNX (20)
1000 RMTI (10)
2500 SGMO (15)
.. with cash of $2,680. This gives me a port value of about $132,500 and a 19.3% annualized return. I'm getting closer to my 24% return, again!

Stocks:
Genvec released a PR that they have licensed their hearing loss pre-clinical work to Novartis, for $5M plus milestones and royalties. They also hit the 184 death interim trigger in the PACT trial on Friday, and will have data in 10 to 12 weeks. I'm nearly as excited about Genvec as I was about Dendreon, but caution that the risk/reward is much slighter here at $2 than at $0.76 when I first mentioned it here a few months ago. I was still buying in my real-world IRA at $1.70, but am probably done for now.

Dendreon had an interview published in the Xconomy online magazine with the new COO Hans Bishop. It is a MUST READ, here: http://www.xconomy.com/seattle/2010/01/19/dendreons-new-operations-man-hans-bishop-aims-to-keep-provenge-trains-running-on-time/

Sangamo had good results (albeit from one patient, in a Phase I trial) here: http://finance.yahoo.com/news/Sangamo-BioSciences-Announces-prnews-1693198508.html?x=0&.v=1

Regards,
Trond

Happy New Year

Thanks to all who read this - I have not been good about keeping up posting, or even the Port 24. I shall strive to do better in the new year, as I want to bring my returns back up to the 24% level.

I am closing out the year with a few calls being sold in the Port. 24 Arena Feb $4s, 10 Electro-Optical Jan $10s, and 20 Progenics Feb $5s ... all with a monthly return of about 4%.
I will be ending 2009 with an annualized rate of return of about 13% - good, but far short of my target. I do take comfort in the fact that I ignored the Port for long stretches of time and would have made a few more percentage points on the calls I neglected to sell.

My worst move this year was to not sell ARNA on the spikes. That cost me around $20,000. Of course I would not have sold at exactly the high point, but I really should have lightened up. On the plus side, I did exactly that with BioCryst - buying low, selling high, and selling a lot of calls in the interim. Dendreon was the clear winner this year - going from around $5 to the current $26.

Next year should see Dendreon achieve FDA approval for Provenge, Electro-Optical gain approval for MelaFund, partnerships for Arena and Neurocrine, and significant appreciation for Elan, Amag, and Allos. I find myself hoping that GenVec starts trading options as I would love to have some GNVC in the Port.

May everyone have a fun and safe New Year!

Regards,
Trond

Port 24 update

Options expiration was yesterday and I was only exercised on 600 Dendreon shares. Elan, Sangamo, American Oriental, Arena, and Electro-Optical calls all expired with the premium as 100% profit.

Dendreon was a little disappointing, as I hate to see any shares of this company go, even in a ficticious portfolio. I had sold the $35s at $0.84, and then bought them back at a profit ($0.20), and then sold the $28s. It closed at $29.51 and so they were called away from me; I now have only 400 shares left (just under 10% of the Port).

I have to say I am a little surprised at Dendreon's strength. The addition of two new Board members (one, Ian Clark, the upcoming CEO of Genentech North America) certainly fueled speculation about the Rest-Of-World partner for Provenge being Genentech.

For me, the only real news of interest coming up is the amended BLA scheduled for mid-November. And the aBLA itself really is not newsworthy as they announced it a month ago. But - the sensitivity analysis should be included and hopefully made public. This sensitivity analysis is important to me because it will show the continued strength of Provenge over time. In April, the final results of the IMPACT trial showed a statistically significant reduction of risk of death of 22.5% over the placebo group. This 8+ month (results were released in April but the results were based off data cut off in January) should show an improving hazard ratio over and above the 22.5% aleready seen. I would like to see 26%+.

Elan will be having their quarterly earnings call on 10/21, but will be upstaged slightly on the 20th when Biogen releases Tysabri numbers for Q3. I expect to see continuing, although not blowout, growth in the patient count. However, I also expect Elan to announce they will swing to profitability in either Q4 or Q1 2010. We should see real growth in revenue from the EDT branch, and unfortunately we probably will not hear any real news of the Alzheimers platform on this call.

In my real money IRA, I have been buying GenVec (GNVC) and MannKind (MKND) for the first time and more Elan (ELN) and Sangamo (SGMO). I am very excited for GNVC but the move started earlier than I thought it would: I started buying at $0.76 per share and it already touched $1 this last week.

I'll be adding a couple watchlist stocks, mentioning now only that Allos (ALTH), AMAG Pharma (AMAG), and MannKind (MKND) should deliver 50-100% returns in the next 12-24 months.

Regards,
Trond

More Port24 calls...

Busy day at lunch.

I sold the remaining 800 ALTH shares at $8.50. The decision date is tomorrow and while I believe they will get approved, the Port wants a steady 2% a month return, not the uncertainty of FDA politics. This is up from the $7.99 purchase price (as well as the premiums on the September calls) so I am ahead of the game.

I also bought 1000 more MELA. The FDA date is 12/7, so the Oct and Nov calls are going to be free money while we wait.

I sold the following calls:
DNDN - 6 Oct $35s for $0.84 (2.8% return)
ELN - 10 Oct $8s for $0.15 (2%)
MELA - 10 Nov $10s for $1.20 (12%, or 6% monthly)
ARNA - 29 Oct $5s for $0.40 (7.5%)
SGMO - 15 Oct $10s for $0.25 (2.8%)

I think the MELA and ARNA calls are the best play of all right now. The stocks may go down slightly but you keep the premium and the stock should recover before the expiration. And of course, if the stock stays where it's at, the premium is pure profit. 6 and 7% a month is nothing to sneeze at!

The Port is now at $138,700 -- a 28.4% annualized return. I have $12,653 in cash and the following positions:

Stock (calls written)
2000 NBIX
1600 ELN (10)
1000 DNDN (6)
2500 SGMO (15)
400 BCRX
4900 ARNA (29)
200 AMAG
2000 MELA (10)

Regards,
Trond

Port24 update

Well, I had my AOB and MELA called away from me last Friday in the Port. I am sad at losing MELA as I expect it to gain quite a bit over the next couple months - it started Wednesday with a couple dollar spike. I ended up buying some back and selling the $10 strikes. Again, too early, as it is up over $10 today.

On Wednesday I sold 29 ARNA $6 Sept calls at $0.20. They have announced that the BLOSSOM trial results will come out in late September and I halfway expect these will be called away. If it is still under $6 in mid-Sept I will not be crying as I expect at least a 50% stock move on the results soon thereafter.

Yesterday I bought my MELA back at $9.50 and sold the Sept $10s for $0.45. The FDA will rule on MelaFind by December so these should be good for trading until the November series.

Finally, I also bought 1600 ALTH at $7.99... selling 8 Sept $7.50 calls and the other 8 Sept $10 calls. Allos has an advisory committee meeting on Sept 2 so the price should either be above $10 or back in the $6s.

So the Port now has the following holdings: (# calls sold against holding)
2000 NBIX
1600 ELN
1000 DNDN
2500 SGMO
400 BCRX
1000 MELA (10)
4900 ARNA (29)
200 AMAG
1600 ALTH (16)
Cash = $6,567...
... for a total worth of about $125,000. This is a 19.46 annualized return... still below my target of 24% but well above the market returns over a similar period (S&P and NASDAQ).
Note that I actually do not think either the S&P nor the NASDAQ is a correct index to compare the Port against, as I think of this as an absolute return fund. If I am not positive, I don't care if I beat the market by 100%.

Current favorites:
Look for ALTH to return ~30-50% in the next week.
ARNA is one of the best September covered call plays ever at the $5 strike. 10%+ return for less than a month with a large margin of safety.

Regards,
Trond

Port 24, Sangamo, and Elan

Made one trade today in the Port -- sold 4 Aug $12.50 calls against my BioCryst. 4 BIUHV at $0.75.

With the MELA, BCRX, and SGMO spikes, the Port is now at an 18.3% annualized return. I'm getting close to my projected 24%!

Sangamo has had a surprising few days of strength. I think unless there is news it'll fall back somewhat -- anything under $5.10 ($5.76 today) would be a very good buy.

Elan will hear soon about palperidone palmitate -- JNJ's schizo drug that the EDT division re-formulated and which is now in front of the FDA. An approval here will mean some significant royalties in the future, and I expect a nice 2-5% bump on that news.

Regards,
Trond

New buys in the Port 24

Bought 2000 MELA at $7.26, sold 20 AUG $7.50s for $0.70.
Bought 2900 ARNA at $4.70, sold 29 AUG $6 for $0.40.

Cash = $1,208.86 and positions are:

1600 AOB (16) (=calls written against)
2000 NBIX ()
1600 ELN ()
1000 DNDN ()
2500 SGMO ()
400 BCRX ()
2000 MELA (20)
6000 JAV ()
4900 ARNA (29)

ARNA, by the way, may be the safest 3 month play ever.

Regards,
Trond