April options expiration came Friday and for the first time in three years my Port24 is without some Dendreon.
DNDN had a great run in the last month - moving from $32 to $42 - and my gamble that it wouldn't break $40 was a bad one. I will probably hold on to the cash for a few days to assess what I want to do. I really am not comfortable with the overall market but there are always places to put money to work.
PZG had a bad week - the first resource report came out and I feel was badly prepared-for by the company. I still look forward to a very good year for Paramount but it may be a couple months of sitting and waiting.
The Port's return is about 18% annualized, as of 4/15. In one month, it turns 3 years old! So I am lagging my desired return of 24% a year quite badly - by 6%! In my defense, for newer readers, I have made two stupid mistakes: 1) with Elan in not taking enormous profits when I could have, and 2) in neglecting the Port for about 9 of the 35 months I've been running it. Those nine months of "lost" covered call returns very well could have made up that 6%.
Even with the mistakes, I will concede that 18% is pretty good. And better, in comparison to the S&P 500 (SPY) and the Nasdaq (QQQQ), I am handily beating the market in the same period. The SPY has returned -0.6% in the 35 month period while the QQQQ's are at 5.7% annualized. So I'm still beating the better of the two by 12.4% per year. That is respectable.
Cash $19,372.85 Position (calls against)
2600 CLDX (26)
2000 NBIX (20)
7000 NNVC (0)
7000 ONTY (70)
1600 DCTH (16)
3600 PZG (0)
9000 CLSN (0)
2000 MITI (0)
800 SGEN (8)
Regards,
Trond
Showing posts with label Elan. Show all posts
Showing posts with label Elan. Show all posts
Saturday, April 16, 2011
Monday, May 3, 2010
Watchlists
I recommend that everyone who is interested in individual stocks maintain one or more watchlists.
This is simply a list of companies that you are interested in. Most brokerages allow you to maintain a list, or Yahoo Finance! does quite nicely. If you get into the habit of checking in every day, you'll see a few benefits.
For one, you will hear news about your stocks very quickly. Of course, most people don't live and breathe the market, and conventional wisdom has it that one should not do this as it leads to that most evil practice of all - day trading. Ha!
Of course, conventional wisdom also counsels one to place your long term dollars in mutual funds and let the experts do their thing. As you are reading this, gentle reader, I assume you probably had an internal "Ha!" go off yourself.
It's usually not necessary to know news of a stock that is important to you immediately; very few things will be life and death to a corporation. Biotech may be the exception - trial news can kill or revive those very quickly, of course. But being aware of something at least gives you the power of choice. Here's an example: Oncothyreon (ONTY) received the unwelcome news a couple months ago that Stimuvax trials were being halted on safety concerns. It dropped immediately, of course, but kept dropping some more over the next few days. If this news spooked you, you at least had the chance the next day to sell at a higher price than the succeeding days would have allowed you.
Immersing yourself in the news also mean you are more in tune with your choices. You see earnings announcements, insider buys or sells, product information and the like; and hopefully you begin to understand the company somewhat better over time.
The other main benefit of a watchlist is that you begin to have an appreciation for the daily swings in price. I am not endorsing very active trading (although not disparaging it either) - but knowing that a stock you are strongly interested in is at a low point for the year, with no appreciable bad news or other information, may give you the slight extra nudge to become a shareholder. Entry price does matter - even in the long term, buying a stock at $9 instead of $10.50 will mean several extra percentage points of gain, or allow you to buy more shares than you could otherwise have done. And over the course of months, a swing of a couple dollars in price WILL happen.
I desperately need to update my blog watchlist: JAV is being bought out at $2.19 (a nice gain from my rec about 16 months ago at $1-ish), SGMO probably won't see sub $5 again, and Dendreon almost certainly will never be available at my latest upgrade of under $30.
My additions will include MannKind, Oncothyreon, Paramount Gold, Lexicon, and Opexa. I hope to talk of some of these soon in future posts. MannKind, Oncothyreon, and Paramount are probably the most timely buys; Arena and Elan would be next.
On a final note: I sold some small amounts of Dendreon over the last couple days but intend on holding the majority for the absolutely long haul. The guy who sold Microsoft for 3 or 4 times his stake looked really smart in the short term, but I believe this puppy has legs. :-)
Regards,
Trond
This is simply a list of companies that you are interested in. Most brokerages allow you to maintain a list, or Yahoo Finance! does quite nicely. If you get into the habit of checking in every day, you'll see a few benefits.
For one, you will hear news about your stocks very quickly. Of course, most people don't live and breathe the market, and conventional wisdom has it that one should not do this as it leads to that most evil practice of all - day trading. Ha!
Of course, conventional wisdom also counsels one to place your long term dollars in mutual funds and let the experts do their thing. As you are reading this, gentle reader, I assume you probably had an internal "Ha!" go off yourself.
It's usually not necessary to know news of a stock that is important to you immediately; very few things will be life and death to a corporation. Biotech may be the exception - trial news can kill or revive those very quickly, of course. But being aware of something at least gives you the power of choice. Here's an example: Oncothyreon (ONTY) received the unwelcome news a couple months ago that Stimuvax trials were being halted on safety concerns. It dropped immediately, of course, but kept dropping some more over the next few days. If this news spooked you, you at least had the chance the next day to sell at a higher price than the succeeding days would have allowed you.
Immersing yourself in the news also mean you are more in tune with your choices. You see earnings announcements, insider buys or sells, product information and the like; and hopefully you begin to understand the company somewhat better over time.
The other main benefit of a watchlist is that you begin to have an appreciation for the daily swings in price. I am not endorsing very active trading (although not disparaging it either) - but knowing that a stock you are strongly interested in is at a low point for the year, with no appreciable bad news or other information, may give you the slight extra nudge to become a shareholder. Entry price does matter - even in the long term, buying a stock at $9 instead of $10.50 will mean several extra percentage points of gain, or allow you to buy more shares than you could otherwise have done. And over the course of months, a swing of a couple dollars in price WILL happen.
I desperately need to update my blog watchlist: JAV is being bought out at $2.19 (a nice gain from my rec about 16 months ago at $1-ish), SGMO probably won't see sub $5 again, and Dendreon almost certainly will never be available at my latest upgrade of under $30.
My additions will include MannKind, Oncothyreon, Paramount Gold, Lexicon, and Opexa. I hope to talk of some of these soon in future posts. MannKind, Oncothyreon, and Paramount are probably the most timely buys; Arena and Elan would be next.
On a final note: I sold some small amounts of Dendreon over the last couple days but intend on holding the majority for the absolutely long haul. The guy who sold Microsoft for 3 or 4 times his stake looked really smart in the short term, but I believe this puppy has legs. :-)
Regards,
Trond
Tuesday, April 13, 2010
Port 24, ONTY, and ARNA
Well, Oncothyreon (ONTY) had a nice little run today, so I sold the August $5 calls in the Portfolio 24. All 3000 shares are now covered; 30 AUG $5 contracts sold for $0.60 per share.
I really should be selling Elan calls here, as they also have gone up quite nicely, recently, but I think it will hold $8 and the $9s do not have enough premium yet.
The Port now stands at $134,743, with $2,538 in cash. That gives me an annualized return of 18.1%.
I bought ARNA in both my IRA and my brokerage accounts today; the low $3s are a very good entry point. Honestly, the brokerage shares will probably be sold on any kind of bump, but the IRA shares are longer term; the FDA date is 10/22/10 and there should be some appreciation as that date gets closer.
Regards,
Trond
I really should be selling Elan calls here, as they also have gone up quite nicely, recently, but I think it will hold $8 and the $9s do not have enough premium yet.
The Port now stands at $134,743, with $2,538 in cash. That gives me an annualized return of 18.1%.
I bought ARNA in both my IRA and my brokerage accounts today; the low $3s are a very good entry point. Honestly, the brokerage shares will probably be sold on any kind of bump, but the IRA shares are longer term; the FDA date is 10/22/10 and there should be some appreciation as that date gets closer.
Regards,
Trond
Tuesday, March 23, 2010
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
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
Sunday, March 21, 2010
Port update - options expiration
Quick summary of the Port, along with GenVec update:
On Friday, the Port had all 2000 ProGenics (PGNX) called away at $5, and the Elan calls expired worthless, allowing me to keep the premium and the shares. We're back to above 17% annualized return, still well shy of the 24 I am aiming for. I still feel it is doable, if I just put some time back into this Port. I have only been selling calls on 1 to 3 holdings a month, where I should be turning 100% of the holdings. I'll be selling the Genvec this coming week, since it does not offer options and I'm up over 10% already, having been in it for only a month. Time to take that profit and buy something I can sell calls against!
GenVec should be announcing the interim PACT trial results within 4 weeks now. On January 15th they said 10 to 12 weeks, and Friday 3/19/10 was exactly 9 weeks. While they may announce this coming week, both their annual earnings call and the recent Roth presentation suggested it could spill over into April so I would put more faith into it happening right around the first week of April.
In my real money IRA, I have an insane amount tied up in both Dendreon and Genvec - something like 85% of the total value. It has served me well, as the majority of Dendreon was bought under $6 (now $35) and my Genvec average basis is around $1.25 (now $2.80). I am however, finally at the point where I'll be selling at least a third of my GNVC over the next week or so, and may even dent my DNDN by 10% or so. I am far more confident that Dendreon will get approval, but at this price (mid 30s) I just do not see the return that I saw at the mid $20s we were at only a couple months ago. Genvec, at a little below $3, is also a MUCH different creature risk/return wise, than it was at the $0.77 I started buying at. The upcoming data release is a short term make-or-break event; it could go down (I honestly don't see it going below $1.50) on so-so data, but it could spike as much as another $7-10 on statistically significant data. There is a "reasonable" chance of stat-sig results - say 20-30% - but I am not risking 40+% of my net worth on a 20-30% chance of a home run. Please note that everyone's personal sense of risk vs. reward is vastly different - I AM in effect saying I'm okay with risking ~25% of my net worth!
This is because I already have a two bagger on Genvec - the most likely worse case scenario brings me back to a only slight average gain. I contrast this to the results, if excellent, and it makes sense for me to hold about 2/3 of what I have now, through the data release. For someone buying in now, it would be a greatly different risk/reward calculation.
Please also note that IF GenVec does drop, it very likely could be because the market is disappointed in the data not being excellent, and NOT because the data is bad. At the 92nd event - the first interim look) the hazard ratio was already .753 - the lower from 1.0 the better. This would have been a very good result, but investors were spooked because at 24 months, there was no apparent drug benefit. Missed was the fact that only three patients were still alive and uncensored, and one of those was in the placebo arm. Thus the placebo curve matched the drug-arm curve. As this interim look, at 184 deaths, most of those censored patients will have died, which will "normalize" the placebo curve and probably lower the hazard ratio even further. ANYTHING that relieves the worry about the 24 month death rate and shows improving hazard ratio beyond the .753 already seen, will vastly increase the chances of statistical significance at the final trial calculation. If the data is like this, but Mr. Market is disappointed, this could be the buy of a lifetime - with only a 18-24 month holding period until fruition. Heck - I went through this with Dendreon already from 2007 - 2009, and was rewarded with a $4 stock going to $25 (and currently $35, with a probable $40-45 in May).
Next post: more buy candidates, with the cash I now have in hand!
Regards,
Trond
On Friday, the Port had all 2000 ProGenics (PGNX) called away at $5, and the Elan calls expired worthless, allowing me to keep the premium and the shares. We're back to above 17% annualized return, still well shy of the 24 I am aiming for. I still feel it is doable, if I just put some time back into this Port. I have only been selling calls on 1 to 3 holdings a month, where I should be turning 100% of the holdings. I'll be selling the Genvec this coming week, since it does not offer options and I'm up over 10% already, having been in it for only a month. Time to take that profit and buy something I can sell calls against!
GenVec should be announcing the interim PACT trial results within 4 weeks now. On January 15th they said 10 to 12 weeks, and Friday 3/19/10 was exactly 9 weeks. While they may announce this coming week, both their annual earnings call and the recent Roth presentation suggested it could spill over into April so I would put more faith into it happening right around the first week of April.
In my real money IRA, I have an insane amount tied up in both Dendreon and Genvec - something like 85% of the total value. It has served me well, as the majority of Dendreon was bought under $6 (now $35) and my Genvec average basis is around $1.25 (now $2.80). I am however, finally at the point where I'll be selling at least a third of my GNVC over the next week or so, and may even dent my DNDN by 10% or so. I am far more confident that Dendreon will get approval, but at this price (mid 30s) I just do not see the return that I saw at the mid $20s we were at only a couple months ago. Genvec, at a little below $3, is also a MUCH different creature risk/return wise, than it was at the $0.77 I started buying at. The upcoming data release is a short term make-or-break event; it could go down (I honestly don't see it going below $1.50) on so-so data, but it could spike as much as another $7-10 on statistically significant data. There is a "reasonable" chance of stat-sig results - say 20-30% - but I am not risking 40+% of my net worth on a 20-30% chance of a home run. Please note that everyone's personal sense of risk vs. reward is vastly different - I AM in effect saying I'm okay with risking ~25% of my net worth!
This is because I already have a two bagger on Genvec - the most likely worse case scenario brings me back to a only slight average gain. I contrast this to the results, if excellent, and it makes sense for me to hold about 2/3 of what I have now, through the data release. For someone buying in now, it would be a greatly different risk/reward calculation.
Please also note that IF GenVec does drop, it very likely could be because the market is disappointed in the data not being excellent, and NOT because the data is bad. At the 92nd event - the first interim look) the hazard ratio was already .753 - the lower from 1.0 the better. This would have been a very good result, but investors were spooked because at 24 months, there was no apparent drug benefit. Missed was the fact that only three patients were still alive and uncensored, and one of those was in the placebo arm. Thus the placebo curve matched the drug-arm curve. As this interim look, at 184 deaths, most of those censored patients will have died, which will "normalize" the placebo curve and probably lower the hazard ratio even further. ANYTHING that relieves the worry about the 24 month death rate and shows improving hazard ratio beyond the .753 already seen, will vastly increase the chances of statistical significance at the final trial calculation. If the data is like this, but Mr. Market is disappointed, this could be the buy of a lifetime - with only a 18-24 month holding period until fruition. Heck - I went through this with Dendreon already from 2007 - 2009, and was rewarded with a $4 stock going to $25 (and currently $35, with a probable $40-45 in May).
Next post: more buy candidates, with the cash I now have in hand!
Regards,
Trond
Tuesday, January 19, 2010
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
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
Wednesday, December 30, 2009
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
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
Saturday, October 17, 2009
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
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
Thursday, August 27, 2009
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
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
Tuesday, July 28, 2009
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
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
Wednesday, June 24, 2009
...and two more call positions... Port 24
Sold 4 Jul $27s of Dendreon at $0.64 each and 6 Jul $9s of Elan at $0.15.
Note the Elan calls are selling at 2% and if exercised would yield 27%+. This is EXACTLY the risk I'm looking for - getting my 2% a month with huge upside. The $8 calls are $0.30 which is a 4% monthly return, and probably are a smarter play. I actually do NOT want to lose my Elan shares which is why I elected to only sell 6 calls at the $9 strike.
Regards,
Trond
Note the Elan calls are selling at 2% and if exercised would yield 27%+. This is EXACTLY the risk I'm looking for - getting my 2% a month with huge upside. The $8 calls are $0.30 which is a 4% monthly return, and probably are a smarter play. I actually do NOT want to lose my Elan shares which is why I elected to only sell 6 calls at the $9 strike.
Regards,
Trond
Thursday, May 14, 2009
Port 24 update
Well, it has been exactly one year since I started the Portfolio 24.
It is a model portfolio starting with $100,000.00. I had expectations of making 2% a month, utilizing a covered call strategy. For the year, I fell well short of that, with the Port being worth $89,560 with today's prices. That is an actual 10.5% loss, or 34.5% below my desired return.
While I could use the overall miserable performace of the market (for example, the Nasdaq was down 32 percent and the S&P500 was negative 35% for that one-year period) as an excuse, I prefer to view this as an absolute return portfolio, not a relative. In other words, I do not want to simply beat the market returns, I want to ALSO always make money.
Three things hampered me.
1) Elan absolutely killed me; I bought 800 shares right before the disastrous duo of the ICAD presentation/PML cases. That is a $21,000 mistake at this moment, which would put me at a 10% gain on the year if I had not done that one purchase.
2) I neglected the Portfolio all fall and through the spring. I would have made "some" option premium if I'd been paying attention and selling some out-of-the-money calls. In no way would I have clawed back to even, but I probably left a minimum of $4,000 on the table.
3) I went away from the original strategy somewhat by stocking up on Elan and Dendreon. It worked quite well in Dendreon's case and not so well in Elan's. And it wasn't even the fact I was adding those two names in bulk; I refused to sell calls against them because I didn't want to be called away from perceived large gains.
I bought 1400 shares of BioCryst Pharma today at $2.47, and sold 10 June $2.50 calls for $0.50 -- a nice 20% premium for one month! I also sold 20 $22.50 May calls against Dendreon -- they expire tomorrow and with the stock at $20.90 I think it free money. Granted, the contracts were only $8 each but it came to $130 after commissions.
So right now, the Port stands at $89,566, with the following holdings:
3000 ARQL, 2000 NBIX, 1600 ELN, 2000 DNDN, 2000 ARNA, 2500 SGMO, and 1400 BCRX; $614 in cash. I have 20 Dendreon May calls sold and 10 BioCryst June calls sold. Next week after options expiration I will be more active!
Regards,
Trond
It is a model portfolio starting with $100,000.00. I had expectations of making 2% a month, utilizing a covered call strategy. For the year, I fell well short of that, with the Port being worth $89,560 with today's prices. That is an actual 10.5% loss, or 34.5% below my desired return.
While I could use the overall miserable performace of the market (for example, the Nasdaq was down 32 percent and the S&P500 was negative 35% for that one-year period) as an excuse, I prefer to view this as an absolute return portfolio, not a relative. In other words, I do not want to simply beat the market returns, I want to ALSO always make money.
Three things hampered me.
1) Elan absolutely killed me; I bought 800 shares right before the disastrous duo of the ICAD presentation/PML cases. That is a $21,000 mistake at this moment, which would put me at a 10% gain on the year if I had not done that one purchase.
2) I neglected the Portfolio all fall and through the spring. I would have made "some" option premium if I'd been paying attention and selling some out-of-the-money calls. In no way would I have clawed back to even, but I probably left a minimum of $4,000 on the table.
3) I went away from the original strategy somewhat by stocking up on Elan and Dendreon. It worked quite well in Dendreon's case and not so well in Elan's. And it wasn't even the fact I was adding those two names in bulk; I refused to sell calls against them because I didn't want to be called away from perceived large gains.
I bought 1400 shares of BioCryst Pharma today at $2.47, and sold 10 June $2.50 calls for $0.50 -- a nice 20% premium for one month! I also sold 20 $22.50 May calls against Dendreon -- they expire tomorrow and with the stock at $20.90 I think it free money. Granted, the contracts were only $8 each but it came to $130 after commissions.
So right now, the Port stands at $89,566, with the following holdings:
3000 ARQL, 2000 NBIX, 1600 ELN, 2000 DNDN, 2000 ARNA, 2500 SGMO, and 1400 BCRX; $614 in cash. I have 20 Dendreon May calls sold and 10 BioCryst June calls sold. Next week after options expiration I will be more active!
Regards,
Trond
Friday, April 17, 2009
Volatility, Dendreon, and Elan
Well let's tackle the day.
On my QQQQ volatility play a couple posts ago, I had bought 2 April $30 calls for $310 total and sold 3 April $31 puts for $350. Yesterday the calls would have been sold for $660, while the puts were worthless, and held for today in case the market tanks (which does not look like it will happen). So this play was an exact net gain of zero, taking commissions into account.
A couple notes on this. The 2x3 nature is an odd play. If it doubles to the calls, it may or may not be profitable. If it doubled to the puts, I would have had an easy 25% or more return. I only gave myself two weeks on this one, and typically I'd go for the "month out" expiration rather than the upcoming one. Finally, playing the QQQQ is probably a mistake, as there is QID and QLD; exchange traded funds which double the percentage returns of the QQQQ. So utilizing options, a double is more easily found.
Dendreon:
They will be presenting the IMPACT Provenge results at the American Urological Association meeting on April 28th. The CEO has said the results are "robust" and "unambiguous", so I have no doubt they easily cleared the 22% HR needed for statistical significance.
Elan:
Biogen announced earnings last night and said Tysabri growth was in line with expectations -- neither bad nor great. They now have about 39,800 patients worldwide -- if they are going to hit 100K patients by the end of 2010 then we really need a kickstart in the next couple quarters -- but it probably will not happen. Who cares? Slow and steady growth is fine for me -- and we are past the "blockbuster" status of $1B in sales now. Bring on 75K patients!
Regards,
Trond
On my QQQQ volatility play a couple posts ago, I had bought 2 April $30 calls for $310 total and sold 3 April $31 puts for $350. Yesterday the calls would have been sold for $660, while the puts were worthless, and held for today in case the market tanks (which does not look like it will happen). So this play was an exact net gain of zero, taking commissions into account.
A couple notes on this. The 2x3 nature is an odd play. If it doubles to the calls, it may or may not be profitable. If it doubled to the puts, I would have had an easy 25% or more return. I only gave myself two weeks on this one, and typically I'd go for the "month out" expiration rather than the upcoming one. Finally, playing the QQQQ is probably a mistake, as there is QID and QLD; exchange traded funds which double the percentage returns of the QQQQ. So utilizing options, a double is more easily found.
Dendreon:
They will be presenting the IMPACT Provenge results at the American Urological Association meeting on April 28th. The CEO has said the results are "robust" and "unambiguous", so I have no doubt they easily cleared the 22% HR needed for statistical significance.
Elan:
Biogen announced earnings last night and said Tysabri growth was in line with expectations -- neither bad nor great. They now have about 39,800 patients worldwide -- if they are going to hit 100K patients by the end of 2010 then we really need a kickstart in the next couple quarters -- but it probably will not happen. Who cares? Slow and steady growth is fine for me -- and we are past the "blockbuster" status of $1B in sales now. Bring on 75K patients!
Regards,
Trond
Friday, April 10, 2009
Updates - Dendreon and Elan
Well, I am going to cheat and basically cut & paste an email I just sent to a few folks:
Dendreon:
Here we go!! We’ll know the final results by the 28th at the latest. We’re at $6.30 now and it’ll be:
a repeat of 2007, going to $20 or so (on a statistically significant results)
bouncing around between $4 and $10 (if the results are very close to stat sig – they’ve indicated they will refile anyways, if this happens)
drop to $1 or so (if a large miss). I do not see this happening at all because 6 months ago the interim already showed a 20% reduction of risk of death from the drug – and they only need a 22% reduction at the final.
I personally think it’ll be a pretty good result. If we see $20+, you may want to sell half of what you have and let the rest stay for approval.
Elan:
Earnings call are coming up -- BIIB on the 16th and Elan on the 22nd. So we'll know Tysabri numbers. Last known is 37,100 worldwide at the end of 2008. I am actually unsure if this includes the 600 in trials or if it's only commercial? I suspect it is total, as all other reports show it that way.
IF we return to close to 200/week net adds, this would be about 2,400 new patients and put us just shy of 40K. So I view anything north of 40K as pretty spectacular. One thing to keep in mind is that the EU is pretty fragmented and each county has to approve Tysabri and the insurance costs individually. So uptake is slower but starts gathering steam a few quarters after each country finally approves it. We're close to snowballing territory, I think ... may be 1 or 2 more quarters though.
AAB-001 - probably no news. More details of how they are approaching the 2 mg dose of non-carriers that they dropped, but that is just noise. I don't expect anything until end of this year, IF they take an interim and it's good. Still remotely possible that they file a BLA at the end of the year based on the non-carrier phase II results and 6-9 months safety data from the III. I doubt this now, as the dropped 2 mg group was because of vascular edema. Too much safety noise and the 2.0 mg group taken out would be post-hoc. Bummer!
Sale of the company? Partial sale? I don't think they'd release that at an earnings call. I unfortunately still think we'll see a buyout before years end simply because the market cap is too attractive.
I bought more last week at $5.67. It may bounce around but I don’t think it’ll go lower than $4, and I think we’ll start seeing it go up again IF Tysabri numbers start increasing at an increasing rate again (which I view as likely).
Regards,
Trond
Dendreon:
Here we go!! We’ll know the final results by the 28th at the latest. We’re at $6.30 now and it’ll be:
a repeat of 2007, going to $20 or so (on a statistically significant results)
bouncing around between $4 and $10 (if the results are very close to stat sig – they’ve indicated they will refile anyways, if this happens)
drop to $1 or so (if a large miss). I do not see this happening at all because 6 months ago the interim already showed a 20% reduction of risk of death from the drug – and they only need a 22% reduction at the final.
I personally think it’ll be a pretty good result. If we see $20+, you may want to sell half of what you have and let the rest stay for approval.
Elan:
Earnings call are coming up -- BIIB on the 16th and Elan on the 22nd. So we'll know Tysabri numbers. Last known is 37,100 worldwide at the end of 2008. I am actually unsure if this includes the 600 in trials or if it's only commercial? I suspect it is total, as all other reports show it that way.
IF we return to close to 200/week net adds, this would be about 2,400 new patients and put us just shy of 40K. So I view anything north of 40K as pretty spectacular. One thing to keep in mind is that the EU is pretty fragmented and each county has to approve Tysabri and the insurance costs individually. So uptake is slower but starts gathering steam a few quarters after each country finally approves it. We're close to snowballing territory, I think ... may be 1 or 2 more quarters though.
AAB-001 - probably no news. More details of how they are approaching the 2 mg dose of non-carriers that they dropped, but that is just noise. I don't expect anything until end of this year, IF they take an interim and it's good. Still remotely possible that they file a BLA at the end of the year based on the non-carrier phase II results and 6-9 months safety data from the III. I doubt this now, as the dropped 2 mg group was because of vascular edema. Too much safety noise and the 2.0 mg group taken out would be post-hoc. Bummer!
Sale of the company? Partial sale? I don't think they'd release that at an earnings call. I unfortunately still think we'll see a buyout before years end simply because the market cap is too attractive.
I bought more last week at $5.67. It may bounce around but I don’t think it’ll go lower than $4, and I think we’ll start seeing it go up again IF Tysabri numbers start increasing at an increasing rate again (which I view as likely).
Regards,
Trond
Thursday, April 2, 2009
Elan and follow up to my volatility trade
Two things tonight:
Elan and Wyeth announced that they are dropping the 2 mg dose in the non-APOE4 gene carrier cohorts of the Alzheimer's Disease drug bapineuzimab (AAB-001), due to safey concerns relating to vasogenic edema. That was the minor brain swelling they encountered in the Phase II - more so in the carrier group than the non-carrier. They already had made the decision to not include that dosing group in the Phase III carrier group.
What this means is simply that those already dosed will continue in the trial and be randomized into the .5 or the 1 mg groups. This is not really news that should move the stock.
We had a pretty good move in the Nasdaq today ... it went from 30.77 to 31.76, or 3% That was enough to move the options as shown below (new prices are what you could sell the contracts for. If I closed out it would make some money, but not at my target, so it continues!
As an aside, I opened up a real time trade near the end of the day when the QQQQ was at $31.93 -- 3 each of the April $32 calls and puts. I will advise when I close out of this trade.
Strike Date . Strike Price . Type . Contract Price . Sell Price
April . . . . . $30 . . . . . . . . .Call . . . . . . . $150 . . . . . 238
April . . . . . .$31 . . . . . . . .. .Put . . . . . . .. $114 . . . .. 62
May . . . . . .$30 . .. . . . . . Call . . . .. . . .$216 . . . . 298
May . . . . . . .$31 . . . . . .. . . .Put . . . . .. . . $181 . . . . 131
IF I closed out of the April trades now, I would have gained 2*88 on the calls and lost 3*52 on the puts... with commissions it would be pretty much a wash. I really need a full doubling of the profit side to close out successfully. It is also obvious in retrospect that one should strive to made the two sides an equal number of calls vs. puts, as the calls need to gain a larger percentage to offset the 150% as many puts.
In the May series, there is a 2*82 gain and a 3*50 loss, again, nearly a wash. I will hold these.
Regards,
Trond
Elan and Wyeth announced that they are dropping the 2 mg dose in the non-APOE4 gene carrier cohorts of the Alzheimer's Disease drug bapineuzimab (AAB-001), due to safey concerns relating to vasogenic edema. That was the minor brain swelling they encountered in the Phase II - more so in the carrier group than the non-carrier. They already had made the decision to not include that dosing group in the Phase III carrier group.
What this means is simply that those already dosed will continue in the trial and be randomized into the .5 or the 1 mg groups. This is not really news that should move the stock.
We had a pretty good move in the Nasdaq today ... it went from 30.77 to 31.76, or 3% That was enough to move the options as shown below (new prices are what you could sell the contracts for. If I closed out it would make some money, but not at my target, so it continues!
As an aside, I opened up a real time trade near the end of the day when the QQQQ was at $31.93 -- 3 each of the April $32 calls and puts. I will advise when I close out of this trade.
Strike Date . Strike Price . Type . Contract Price . Sell Price
April . . . . . $30 . . . . . . . . .Call . . . . . . . $150 . . . . . 238
April . . . . . .$31 . . . . . . . .. .Put . . . . . . .. $114 . . . .. 62
May . . . . . .$30 . .. . . . . . Call . . . .. . . .$216 . . . . 298
May . . . . . . .$31 . . . . . .. . . .Put . . . . .. . . $181 . . . . 131
IF I closed out of the April trades now, I would have gained 2*88 on the calls and lost 3*52 on the puts... with commissions it would be pretty much a wash. I really need a full doubling of the profit side to close out successfully. It is also obvious in retrospect that one should strive to made the two sides an equal number of calls vs. puts, as the calls need to gain a larger percentage to offset the 150% as many puts.
In the May series, there is a 2*82 gain and a 3*50 loss, again, nearly a wash. I will hold these.
Regards,
Trond
Friday, March 20, 2009
Doom and Gloom
This is a bunch of doom and gloom.
I am usually pretty optimistic, but I have to call it the way I see it. (I am indebted to a number of posters on the InvestorVillage website for their views, which are reflected below and I have bought into) There are certain things occurring in the market, economy, and world that I propose are not being taken seriously enough by the pundits and commentators that most people seem to listen to.
I am usually pretty optimistic, but I have to call it the way I see it. (I am indebted to a number of posters on the InvestorVillage website for their views, which are reflected below and I have bought into) There are certain things occurring in the market, economy, and world that I propose are not being taken seriously enough by the pundits and commentators that most people seem to listen to.
In some ways, this is not their fault.
- From a psychological point of view, “the only thing we have to fear, is fear itself”. If a continuing litany of bad news is the only thing that we are fed, then of course we’ll see a self-fulfilling prophecy.
- Too, as I have mentioned previously, some of the media seems to be “captured” (inasmuch as they are spoon-fed articles of interest from major wire services or hedge funds who have agendas).
- Finally, they WANT to believe we are on the road to recovery. They see their own 401(k) balances headed south, and believe the mantra of cyclical bull and bear markets. After all, we’re in the 16th month of a recession and the average only lasts 11 (since WWII) months.
So why do I hang my head and join the bear crowd? (First, let me state that I do not believe in the Armageddon that some folks say is coming. There are always people who say one should buy canned goods, seed crop, and guns. We will get through this! But it will be months and possibly years longer than most people think)
The market is still overvalued. Everything occurs in cycles – we just finished with a massive bubble and need to see much more downside before we come close to an average. Based on earnings or dividend yield, you can make the argument that we will still see the indices go about 20% lower. Good times tend to be better than expected and downsides tend to be worse than expected.
Specifically within the markets, banks are nowhere near to finished in terms of writing off their bad loans. I have heard they've only written off half of the toxic junk still on their books. And this is the famous slippery slope – when more bad news about the banks and loans appear, downgrades will drive them even lower.
Consumer confidence is shot, and yet investors are not yet at the point of “capitulation” that truly marks the bottom of a market. Every article I read and every market-oriented conversation I have is centered around the question, “When are we going to hit the bottom so I can invest the cash I have ready?”
I have news for you – until we are at the point where the masses are truly ready to swear off stocks entirely, we have not hit bottom. Your grandparents, who lived through the Great Depression and only wanted CDs and savings accounts: that is the kind of capitulation I am talking about.
With stock markets in the tank – guess what the next big emergency is going to be? Pension Funds. They have been trundling along, using rosy projections about 10%+ returns, allowing them to underfund their liabilities. Now the piper is awfully close and we have nothing to pay him with. The Chicago Transit Authotity recently had to float $2 BILLION in bonds to cover their pension payouts, and now are underwater not only on the pension payments, but on the debt service as well. California had budget problems this last winter and when state and local public employees realize their pensions are at risk too, we will see some very angry public servants. We'll also see some very angry taxpayers when they are asked to make up these deficits!
We simply have too much debt still on the books – not only as a country but as individuals. The home is not the ATM it has been in the last few years, credit card companies are tightening requirements, raising rates, and lowering limits as we speak. The Fed recently said it will buy $300B of treasury bonds to get some more liquidity in the market: for one thing this will have to be an off-the-books move, as my last post shows – they only have equity of about $44B. The second impact this has is that again the piper will have to be paid at some point – drastic inflation and higher taxes will invariably follow.
Speaking of homes, not only will they not be useful as a method to pull equity from, but it looks like home prices will continue to fall. The historical average of home price to annual salary is 3:1 – we are still at about a 4:1 ratio now. That means home prices will have to fall by another 25% to get back to the historical average. And recall my point about cycles – to get back to an average, we need to go below the average to allow reversion to the mean. Does that mean home prices will fall another 50%?
Unemployment is perhaps the scariest of all the scenarios to talk about. The latest numbers show a rate of 8.1%. Unfortunately, the commonly used measure of unemployment is the U3 rate – which leaves out folks who are either underemployed or have ceded to despair and stopped looking for work. The “real” rate (known as the U6) now stands at 18%. Nearly one out of five people who want to work are unable to.
Here's a very strange and possible additional outcome: governments will decide to reduce prisoner counts to lessen their costs. Inmates are NOT counted in any measure of the unemployment rates. When released, they will start looking for work and thus will INCREASE the unemployment rates. It's estimated that 0.7% of our population is incarcerated – if 10% of those (the non-violent, victimless, and marijuana-related prisoners) are released we may see an extra 1% rise in the unemployment rate!
Chickens will be coming home to roost. The United States has affected the global economy already – commodity prices have dropped, credit markets worldwide have tightened, and worldwide stock markets have dropped. In turn, we will soon be affected by the world. China has been a large buyer of our treasury bonds; do you think they are going to be pleased about the extra $300B just floated? With all the decifit spending Obama is proposing, we are coming to the point where I fear for the world's faith in our currency. And Obama is just too damn honest about things – at some point he will be forced to admit that his ambitious plans (healthcare, energy, education, as well as the stimulus bill AND all the bailouts given under Bush's and now his administration – oh, and wait until he announces that he is all set to fix Medicare and Social Security!) will require additional taxes. Hmmm... do you feel like going back to the consumerist mentality with THAT hanging over your head?
One last note about the rest of the world – foreign banks are about to hear a certain horizontally-challenged lady singing. Western European banks have lent extraordinary sums (*our* banks aren't the only ones who can over-leverage themselves, you know) to Eastern European countries. Austria's national bank, for example, has lent 70% of its GDP to eastern-bloc countries. They may be bankrupt within a year.
Oil traditionally spikes during the summertime. Can you imagine the pain we are going to experience with the 1.3 million additional unemployed folks this coming summer and a return to $4+ gasoline? Food prices will again climb, as it costs more to transport all the raw and finished materials. People buying less of everything except foods and necessities mean that more retailers go out of business. So what follows that? Commercial real estate will start slipping away too. If you see $4 gas, start thinking about selling your commercial REITs that pay such a lovely dividend.
Bernie Madoff not only set a new record for thievery on a global scale, but may have ruined an entire generation of charitable trusts. Several well known and well endowed charities literally had ALL assets placed with dear ol' Bernie and are now defunct. Everything from soup kitchens to rehabilitation clinics have disppeared, overnight. That adds to not only the general misery of the least fortunate, but may increase the crime rate.
It is not a pretty picture. (Even with the foregoing, I personally think we will work our way through this within three to four years) But in this next few years, I urge you to proceed open-eyed. If two years ago (and I was in this camp myself) you did not think it possible to have the world in the situation we find ourselves in now, what are the chances that you are going to be right about what happens in the next two or three years?
- Take steps to protect the cash you have on hand now.
- Dollar-cost average your way into stock indices (if you have dispoable income AFTER assuring yourself an emergency fund).
- Possibly buy some oil ETFs over the next month to time the coming gasoline price spikes in summer.
- We most likely will have a “bear-market rally” in the next two to three months. I do not believe it will have legs.
- Personally I will take the opportunity to sell some of my individual stocks if they do bounce, and hold on to more cash than I am used to (30 - 40% or so).
- I never would have thought it, but I would even be tempted to buy into a gold ETF if gold drops below $800 per oz.
- Longer term? Short ETFs and SPY/QQQQ/DIA puts, IF they get a bounce by summertime. I do not think the market as a whole will recover for at least one more full year – late summer of 2009 is my prediction.
On an individual basis, I still like Dendreon for the next few months. We'll know in less than 40 days now about Provenge! I like the odds – if the final results are statistically significant, we will see an enormous jump – from $4 today to probably around $20. If not, there is still almost NO chance that the results will be worse than the interim 20% reduction in risk of death over placebo we saw at interim, and the company has signaled they will still refile their BLA with the trial as supportative.
Elan may not move for 4 to 6 months. Tysabri is not increasing with the vigor that I assumed, there will be no Alzheimers news for months, and the market is eying their debt nervously. I actually think it will fall a bit from here, and then recover in the fall. If it goes below $3 I'll be buying hand over fist.
Arena may be the quickest short term play. Results for their obesity drug are due at the end of March – I see the price as very volatile next week and from the present-day $4 I think we'll see $5+ -- a one week 20%+ move would be quite welcome right now!
Discovery Labs is a gamble but also should have some very short term volatility – buys anywhere near $1.10 and sells anywhere around $1.50 until mid-April.
Neurocrine Biosciences is just teasing now. Are they ever going to partner? I will sell when we get a partnership agreement and wait for it to settle with the rest of the market before buying back in.
Finally, Sangamo is very attractive now and perhaps the longest wait of all. I honestly think they'll be bought out within two years, probably at a very nice premium.
Regards,
Trond
Wednesday, October 29, 2008
The ups and downs of Elan
Right on the heels of good Tysabri news comes another PML case.
A little background -- Tysabri was pulled from the market in 2005 after just a couple months. 3 patients from the clinical trials developed PML -- which is a usually fatal infection in the brain caused by the JC virus. Somewhere around 80%+ of us have the JC virus dormant in our system, yet our immune system usually prevents it from penetrating the blood-brain barrier.
Of those 3 patients, it was eventually determined that one probably had had MS misdiagnosed, and the other two were in Avonex/Tysabri combined trials. Further, the misdiagnosed patient and one of the two combo therapy patients had had prior doses of MS drugs which weaken the immune system dealing with the blood-brain barrier. (Further background -- Elan's marketing partner, Biogen, happened to be the maker of Avonex and pushed the combo therapy trials in the US).
Tysabri is about twice as effective as the next best therapy at keeping MS patients from having relapses. The patients basically stormed the FDA and made it clear they were willing to take the PML risk to keep Tysabri -- see some of the quotes at the end of this post!
In August of 2006 theFDA voted to allow Tysabri back on the market, with VERY stringent protocols (called the TOUCH system) designed to keep patients who had used certain immuno-suppressing drugs previously, off Tysabri until those drugs had been washed out of the system.
The label on Tysabri says that the risk of PML is 1 in 1000. As of June 2008, about 31,000 patients were on it in non-trial prescriptions. In July, 2008, 2 patients in Europe were disclosed to have PML. Elan promptly cratered from $21ish to around $9.
Those two patients, however, are still alive. One is doing quite well and is home; the other not so well and in the hospital still. That one, had had prior immuno-suppressing drugs also though -- Europe was not bound by the TOUCH protocols. There is a new therapy for PML called plasma exchange (plex) that strips the Tysabri out of the body very quickly, which allows the immune system to ramp up immediately against the JC virus.
So now we have a third post-re-entry case -- Elan fell in after hours trading from $7ish to $5.50.
It appears this patient was in monotherapy too -- which actually bodes well for recovery. We now have 5 MS patients who developed PML -- 2 on mono and 3 on combo. This is out of nearly 40,000 total users -- 35,500 after the 3rd quarter results and 4,000 in the prior trials and marketed in 2005. Unless another 30 people develop PML in the next quarter, the risk is MUCH lower than 1:1000 -- and PML is no longer a near-certain death sentence.
Tysabri, at the forward one-year run rate, JUST became a blockbuster ($1B in sales). This case may dampen some demand, but the growth of new patients is still happening. Both companies agree they will have 100K patients on therapy by 2010, even counting in PML risk and dropouts. If acheived, that would lead Elan to a share price of $18 - 25 within 2 years.
That allows for no potential in the rest of the pipeline - and you heard it here -- we have AAB-001 in Phase III that will affect a subpopulation of Alzheimer's patients better than Aricept. We should learn more about that late next year of 2010 also -- and THAT would be a game changer with sales potential in the tens of billions.
Reagrds,
Trond
Tysabri quotes
Quotes and snippets regarding MS patients about Tysabri. These come from editorials, a bulletin board from the National MS Foundation, and from online MS bulletin boards.
Some of the quotes are in bold. These are my emphasis. [Trond]
My sister has had MS for over 2 decades. She has slowly gotten to the point where she is 100% bed ridden and needs a catheter. She can't even sit in a wheelchair any longer.She took TY 3 times and it was a miracle. I witnessed her walking on her own out to her mail box some 75 yards from her house. She could cook, eat on her own, use the bathroom ALONE for the first time in years. She had regained her life, her dignity, her future.
Bartira Tibertius of Chicago … received Tysabri for a full 28 months as part of a clinical trial. "I was doing great. I even forgot that I was sick," Ms. Tibertius, a language teacher and translator, tells us. "But now I'm getting very, very scared. It's deteriorating and I know that," describing numbness and tingling in her hands, arms, feet and face. As for any possible risks from the drug, she says, "I'm more scared of not having Tysabri than having Tysabri. If you told me the Tysabri would shorten 10 years of my life I would do it. I want quality of life, not quantity.">>
Talked to my sister this AM about the Avonex story. Here's her reply & I quote; "How many relapses did I had when I took Avonex? I won't take that crap ever again. I want to go back on Tysabri." End of quote. Avonex is toast.
I was in my neurologist’s office for an appointment late last winter and there were these people there, laughing, acting, and looking as if there wasn’t a care in the world. I thought it was a little odd. Why were they there? There didn’t look sick. During my appointment, my doctor told me that they were in the Tysabri study and had come in for their treatment. I had to stop the interferon because of liver complications. I had to stop the chemotherapy because of heart complications. I now have to take daily injections of Copaxone, since we were out of choices, and the MS is progressing, my doctor suggested Tysabri. It WAS my only choice. I was waiting for our insurance company’s approval the morning I heard it was being suspended. I was looking forward to a monthly treatment instead of daily injections that have unpleasant and painful side effects. I was looking forward to something that might offer more promise in managing this disease. I was looking forward to a treatment that offered hope that I might be able to return to some type of gainful employment. I went on Social Security Disability a few months later. I ended up with worsening symptoms on top of having to manage daily injection site reactions. The MS may have progressed any way, but who knows, it might not have. I sure would have liked a shot at it!
I was diagnosed with MS on April 10, 1996 (our Anniversary). At that time I experienced numbness in both of my feet. After both an MRI and a spinal tap my neurologist was able to confirm my condition. This was not what we wanted to hear but I was prepared to fight with all that was within me. Since that time my condition has progressed. It has affected my vision, my mobility (I struggle to walk with a walker now), my thought process, my speech, I now am incontinent, and am very tired most of the time. My quality of life is not good. My numbness is to my knees in both legs and is affecting my hands. My struggle to walk and my frequent falling is affecting my back (I now have 3 bulging disks) causing me to be in constant pain. I also deal with muscle spasms in both legs daily which also causes me to fall frequently.My neurologist has tried many treatments along the way which include Avonex, Rebif( which was a terrible experience), steroids, and many other drugs for specific symptoms. With all of this help my MS continues to progress with more and more relapses occurring much more frequently now. In Feb. ’05 I was given my first and only infusion of Tysabri. This was the most positive response I had ever had!! My fatigue was nearly eliminated (I did not have to lie down during the day for a month or more), my walking improved, my muscle spasms were gone, the vision problems were resolving, my thought processes greatly improved, my speech returned to normal (even my singing voice returned), the incontinence problem was much improved and there was once again hope for a quality of life.
"If I have to I'll take her to Europe for Tysabri if they approve it before the f**king FDA gets off their ass."
A little background -- Tysabri was pulled from the market in 2005 after just a couple months. 3 patients from the clinical trials developed PML -- which is a usually fatal infection in the brain caused by the JC virus. Somewhere around 80%+ of us have the JC virus dormant in our system, yet our immune system usually prevents it from penetrating the blood-brain barrier.
Of those 3 patients, it was eventually determined that one probably had had MS misdiagnosed, and the other two were in Avonex/Tysabri combined trials. Further, the misdiagnosed patient and one of the two combo therapy patients had had prior doses of MS drugs which weaken the immune system dealing with the blood-brain barrier. (Further background -- Elan's marketing partner, Biogen, happened to be the maker of Avonex and pushed the combo therapy trials in the US).
Tysabri is about twice as effective as the next best therapy at keeping MS patients from having relapses. The patients basically stormed the FDA and made it clear they were willing to take the PML risk to keep Tysabri -- see some of the quotes at the end of this post!
In August of 2006 theFDA voted to allow Tysabri back on the market, with VERY stringent protocols (called the TOUCH system) designed to keep patients who had used certain immuno-suppressing drugs previously, off Tysabri until those drugs had been washed out of the system.
The label on Tysabri says that the risk of PML is 1 in 1000. As of June 2008, about 31,000 patients were on it in non-trial prescriptions. In July, 2008, 2 patients in Europe were disclosed to have PML. Elan promptly cratered from $21ish to around $9.
Those two patients, however, are still alive. One is doing quite well and is home; the other not so well and in the hospital still. That one, had had prior immuno-suppressing drugs also though -- Europe was not bound by the TOUCH protocols. There is a new therapy for PML called plasma exchange (plex) that strips the Tysabri out of the body very quickly, which allows the immune system to ramp up immediately against the JC virus.
So now we have a third post-re-entry case -- Elan fell in after hours trading from $7ish to $5.50.
It appears this patient was in monotherapy too -- which actually bodes well for recovery. We now have 5 MS patients who developed PML -- 2 on mono and 3 on combo. This is out of nearly 40,000 total users -- 35,500 after the 3rd quarter results and 4,000 in the prior trials and marketed in 2005. Unless another 30 people develop PML in the next quarter, the risk is MUCH lower than 1:1000 -- and PML is no longer a near-certain death sentence.
Tysabri, at the forward one-year run rate, JUST became a blockbuster ($1B in sales). This case may dampen some demand, but the growth of new patients is still happening. Both companies agree they will have 100K patients on therapy by 2010, even counting in PML risk and dropouts. If acheived, that would lead Elan to a share price of $18 - 25 within 2 years.
That allows for no potential in the rest of the pipeline - and you heard it here -- we have AAB-001 in Phase III that will affect a subpopulation of Alzheimer's patients better than Aricept. We should learn more about that late next year of 2010 also -- and THAT would be a game changer with sales potential in the tens of billions.
Reagrds,
Trond
Tysabri quotes
Quotes and snippets regarding MS patients about Tysabri. These come from editorials, a bulletin board from the National MS Foundation, and from online MS bulletin boards.
Some of the quotes are in bold. These are my emphasis. [Trond]
My sister has had MS for over 2 decades. She has slowly gotten to the point where she is 100% bed ridden and needs a catheter. She can't even sit in a wheelchair any longer.She took TY 3 times and it was a miracle. I witnessed her walking on her own out to her mail box some 75 yards from her house. She could cook, eat on her own, use the bathroom ALONE for the first time in years. She had regained her life, her dignity, her future.
Bartira Tibertius of Chicago … received Tysabri for a full 28 months as part of a clinical trial. "I was doing great. I even forgot that I was sick," Ms. Tibertius, a language teacher and translator, tells us. "But now I'm getting very, very scared. It's deteriorating and I know that," describing numbness and tingling in her hands, arms, feet and face. As for any possible risks from the drug, she says, "I'm more scared of not having Tysabri than having Tysabri. If you told me the Tysabri would shorten 10 years of my life I would do it. I want quality of life, not quantity.">>
Talked to my sister this AM about the Avonex story. Here's her reply & I quote; "How many relapses did I had when I took Avonex? I won't take that crap ever again. I want to go back on Tysabri." End of quote. Avonex is toast.
I was in my neurologist’s office for an appointment late last winter and there were these people there, laughing, acting, and looking as if there wasn’t a care in the world. I thought it was a little odd. Why were they there? There didn’t look sick. During my appointment, my doctor told me that they were in the Tysabri study and had come in for their treatment. I had to stop the interferon because of liver complications. I had to stop the chemotherapy because of heart complications. I now have to take daily injections of Copaxone, since we were out of choices, and the MS is progressing, my doctor suggested Tysabri. It WAS my only choice. I was waiting for our insurance company’s approval the morning I heard it was being suspended. I was looking forward to a monthly treatment instead of daily injections that have unpleasant and painful side effects. I was looking forward to something that might offer more promise in managing this disease. I was looking forward to a treatment that offered hope that I might be able to return to some type of gainful employment. I went on Social Security Disability a few months later. I ended up with worsening symptoms on top of having to manage daily injection site reactions. The MS may have progressed any way, but who knows, it might not have. I sure would have liked a shot at it!
I was diagnosed with MS on April 10, 1996 (our Anniversary). At that time I experienced numbness in both of my feet. After both an MRI and a spinal tap my neurologist was able to confirm my condition. This was not what we wanted to hear but I was prepared to fight with all that was within me. Since that time my condition has progressed. It has affected my vision, my mobility (I struggle to walk with a walker now), my thought process, my speech, I now am incontinent, and am very tired most of the time. My quality of life is not good. My numbness is to my knees in both legs and is affecting my hands. My struggle to walk and my frequent falling is affecting my back (I now have 3 bulging disks) causing me to be in constant pain. I also deal with muscle spasms in both legs daily which also causes me to fall frequently.My neurologist has tried many treatments along the way which include Avonex, Rebif( which was a terrible experience), steroids, and many other drugs for specific symptoms. With all of this help my MS continues to progress with more and more relapses occurring much more frequently now. In Feb. ’05 I was given my first and only infusion of Tysabri. This was the most positive response I had ever had!! My fatigue was nearly eliminated (I did not have to lie down during the day for a month or more), my walking improved, my muscle spasms were gone, the vision problems were resolving, my thought processes greatly improved, my speech returned to normal (even my singing voice returned), the incontinence problem was much improved and there was once again hope for a quality of life.
"If I have to I'll take her to Europe for Tysabri if they approve it before the f**king FDA gets off their ass."
Tuesday, October 21, 2008
Tysabri numbers
Color me happy.
Biogen presented their earnings today and part of that was Tysabri numbers.
Background: Biogen is Elan's marketing partner for Tysabri. In late July it was disclosed that 2 patients in Europe had developed PML -- which Tysabri has a black-box label warning for, estimated at 1 in a 1000 chances of contracting.
We went from 31,800 patients at the end of June to 35,500 patients at the end of September. (#s are totals-- 600 of those are in clinical trials). So we gained 11% patients, in a quarter where we lost over half the market cap due to PML fears.
As usual, most PR coverage was negative - even false. For example, Lisa LaMotta, a Forbes Online columnist, wrote the following (as of 10/21/08 at 9:40 PM it still says this -- I fully expect by tomorrow it will be "updated" / edited ... AFTER the immediate damage has been done.
http://www.forbes.com/2008/10/21/biogen-idec-biotech-markets-equity-cx_lal_1021markets24.html?partner=yahootix
Market Scan
Biogen Bitten By Tysabri
Lisa LaMotta, 10.21.08, 3:45 PM ET
"....Biogen Idec reported earnings that beat expectations mostly due to the sale of its two multiple sclerosis drugs, but investors were disappointed by a slight slowdown from the second quarter in the number of patients taking one of them...
...As of the end of September, more than 35,500 patients were on Tysabri,the mulitple sclerosis drug in question, down from 31,800 at the end of the second quarter...."
1) slight slowdown? The RATE OF GROWTH slowed down. but the number of patients increased!
2) use a spell checker if you are going to call yourself a Forbes journalist!!! (sorry, catty, I know)
3) First time I've heard of 35K being lower than 31K.
Almost sounds like she'd written the hit piece first -- intending simply to fill in the expected bad numbers, doesn't it?
Next -- PML risk; rated at 1:1000.
We have 35,000 on therapy now, and 3,000 from before 2006, with a total of 4 patients contracting PML. It sounds to me more like 1 : 10,000.
Elan is around $9 right now, and SO UNDERVALUED by Mr. Market that is scary. Tysabri sales are increasing and we officially hit blockbuster status -- sales of $1B (granted -- projecting forward revenues).
Before the PML scare in July just on Tysabri Elan was valued around $20. (don't get me started on the Alzheimer's drug AAB-001 and its potential -- a massive Phase III trial nearly a year already underway from it's first dosed patient and a statistically significant showing in a subgroup of gene carriers).
It will probably be one more quarter before the market shows Elan any love -- and coincidentally the next quarter which should show a large increase in quarter-over-quarter sales of Tysabri.
So I would not be surprised if Elan bounced between $8 and $11 over the next three months -- but by February of 2009 I fully expect to see Elan at about $14 - 17; a rather sweet return of 50% or so. If an interim look at AAB-001 comes in positive, then the rocketship ignites.
Regards,
Trond
Biogen presented their earnings today and part of that was Tysabri numbers.
Background: Biogen is Elan's marketing partner for Tysabri. In late July it was disclosed that 2 patients in Europe had developed PML -- which Tysabri has a black-box label warning for, estimated at 1 in a 1000 chances of contracting.
We went from 31,800 patients at the end of June to 35,500 patients at the end of September. (#s are totals-- 600 of those are in clinical trials). So we gained 11% patients, in a quarter where we lost over half the market cap due to PML fears.
As usual, most PR coverage was negative - even false. For example, Lisa LaMotta, a Forbes Online columnist, wrote the following (as of 10/21/08 at 9:40 PM it still says this -- I fully expect by tomorrow it will be "updated" / edited ... AFTER the immediate damage has been done.
http://www.forbes.com/2008/10/21/biogen-idec-biotech-markets-equity-cx_lal_1021markets24.html?partner=yahootix
Market Scan
Biogen Bitten By Tysabri
Lisa LaMotta, 10.21.08, 3:45 PM ET
"....Biogen Idec reported earnings that beat expectations mostly due to the sale of its two multiple sclerosis drugs, but investors were disappointed by a slight slowdown from the second quarter in the number of patients taking one of them...
...As of the end of September, more than 35,500 patients were on Tysabri,the mulitple sclerosis drug in question, down from 31,800 at the end of the second quarter...."
1) slight slowdown? The RATE OF GROWTH slowed down. but the number of patients increased!
2) use a spell checker if you are going to call yourself a Forbes journalist!!! (sorry, catty, I know)
3) First time I've heard of 35K being lower than 31K.
Almost sounds like she'd written the hit piece first -- intending simply to fill in the expected bad numbers, doesn't it?
Next -- PML risk; rated at 1:1000.
We have 35,000 on therapy now, and 3,000 from before 2006, with a total of 4 patients contracting PML. It sounds to me more like 1 : 10,000.
Elan is around $9 right now, and SO UNDERVALUED by Mr. Market that is scary. Tysabri sales are increasing and we officially hit blockbuster status -- sales of $1B (granted -- projecting forward revenues).
Before the PML scare in July just on Tysabri Elan was valued around $20. (don't get me started on the Alzheimer's drug AAB-001 and its potential -- a massive Phase III trial nearly a year already underway from it's first dosed patient and a statistically significant showing in a subgroup of gene carriers).
It will probably be one more quarter before the market shows Elan any love -- and coincidentally the next quarter which should show a large increase in quarter-over-quarter sales of Tysabri.
So I would not be surprised if Elan bounced between $8 and $11 over the next three months -- but by February of 2009 I fully expect to see Elan at about $14 - 17; a rather sweet return of 50% or so. If an interim look at AAB-001 comes in positive, then the rocketship ignites.
Regards,
Trond
Tuesday, September 30, 2008
Bailout II and certain responses...
Ming asked in comments about the bailout, inflation, and about my proposed mortgage bailout.
I still think the bailout as originally posed was a bad idea. I have not had a chance to read the whole 110-odd pages of it, but there was not enough oversight -- it seemed to give SecTreas almost omnipotent powers and nothing to actually help the people who are in danger of foreclosure.
Do not get me wrong, I think we need something. The short form is (and thanks to a poster on the IV Dendreon message board for putting it so simply):
Widget-maker Mr. Factory needs a loan to add to his production capability. Bank X cannot make the loan because of bad mortgages forcing them writedowns due to the mark-to-market (mtm) rule. Bank Y cannot lend the money to Bank X, even though THEY have the capability due to better loan vetting. Bank Y can't do this because Bank X is high risk paper because of the disclosures forced from mtm. Thus, Mr. Factory cannot expand, and add jobs.
In a nutshell, stagnant production, even in the face of higher demand, and a credit freeze.
WAY OVERSIMPLIFIED. But hopefully you get the picture.
So -- yes, taxpayers get a raw deal, but I think we need an economic show of force -- the economy runs on faith (as does our currency) and the credit freeze has to end. The question is how to do this in a fashion that still gives the taxpayer a chance to not see the money invested as a total loss, and to get the economy stronger.
The inflation question ties right into this. A stronger dollar (gee, maybe even tying the dollar to something real again) would ease commodity price increases. Ending stock shorting and stringent controls on commodity trades would ease prices more, and get people feeling better about the stock market and their retirement accounts. Heating oil season is almost upon us, and while I have no answer specifically of how to moderate that -- I'm sure some bright minds can fnd a way to prevent that from being the next shock on the public.
I personally am a fan of nuclear energy. We need to improve the infrastructure of our energy grid -- we lose too much energy simply creating and transferring it. Solar power may not be feasible everywhere but here in southern California it is criminal NOT to have whatever tax breaks necessary to get people developing and using it.
Overall, I agree with Ming's comments on my mortage plan. My plan as proposed would need EXTENSIVE overhauls -- it was (*blush*) a little bit off the top of my head.
However, some tweaks might get it back in shape. The largest and most deserved criticism is that it rewards people who took equity $ out and raised their mortgage. So we need some sort of limitation on what amount over their original mortgage can be refinanced. Perhaps the higher of what they originally bought it for OR the current appraisal. Remember, the whole point of MY bailout is not to reward the companies who packaged and underwrote the CDOs, but to simply allow real homeowners a way to keep their home and avoid foreclosure. The amount over what is refinanced up to wht is owed would be eaten by the taxpayer -- but with some of those bad loans off the books, the credit freeze would thaw more quickly. It is not perfect, but no bailout CAN be perfect. I do see much pain ahead if there is not an answer to some of these issues soon.
On a totally different topic, Elan announced their earnings call will be in late October. We will get to see how the two PML cases afftected Tysabri sales and uptake. My conjecture, from hearing from several practicing neurologists, is that there was VERY LITTLE drop-outs and we will actually still see a new gain of patients. My present-value discounted share price of Elan, just from Tysabri sales projected through 2011, indicate a price of somewhere around $18 to $20 today. Seeing as we are at $10ish, I think it is a screaming buy.
Sometime in October we will also find out if Dendreon's Provenge passed the interim look successfully or not. As a reminder, the interim peek must meet an extremely high statistical significance barrier. This is a good thing -- you don't want companies able to halt trials and start marketing drugs until thoroughly vetted. But with Provenge, we already have two completed Phase III trials, one with startlingly significant results. Analysts seem to be pretty much disregarding any chance of an interim success -- but I think there are better than 60% odds of a successful interim. I say this because the company got the FDA to agree to amend the SPA for the trial, increasing the interim death events and lowering the final number. They admitted this lowered the power of the final, if it is needed. I don't think they would have pushed for something that lowered (even slightly) the chances of the final unless it truly has a decent chance at the interim.
Vexingly, that means there is a 40% chance of a failure at the interim and we may see sub $3 if that happens. I good tactic might be to buy the shares at $5.70 and sell the $10 or $15 May 2009 calls. You will make 20% or so for 8-9 months on the calls and by mid next year the stock should recover should the interim fail. If successful, you get the premium and get called away next May at the $10 or $15 mark -- doubling or tripling your money. A 2 or 3 bagger at best and hardly any downside risk at worst.
The other good news? Dendreon announced at a presentation that they intend to file an Investigational New Drug (IND) application for their TRP-P8 small-molecule by year end. It is intended to treat prostate, breast, ovarian cancers and melanoma. Totally different method of action from their active cellular immunotherapies such as Provenge, so they are not a "one-trick pony" anymore.
Regards,
Trond
I still think the bailout as originally posed was a bad idea. I have not had a chance to read the whole 110-odd pages of it, but there was not enough oversight -- it seemed to give SecTreas almost omnipotent powers and nothing to actually help the people who are in danger of foreclosure.
Do not get me wrong, I think we need something. The short form is (and thanks to a poster on the IV Dendreon message board for putting it so simply):
Widget-maker Mr. Factory needs a loan to add to his production capability. Bank X cannot make the loan because of bad mortgages forcing them writedowns due to the mark-to-market (mtm) rule. Bank Y cannot lend the money to Bank X, even though THEY have the capability due to better loan vetting. Bank Y can't do this because Bank X is high risk paper because of the disclosures forced from mtm. Thus, Mr. Factory cannot expand, and add jobs.
In a nutshell, stagnant production, even in the face of higher demand, and a credit freeze.
WAY OVERSIMPLIFIED. But hopefully you get the picture.
So -- yes, taxpayers get a raw deal, but I think we need an economic show of force -- the economy runs on faith (as does our currency) and the credit freeze has to end. The question is how to do this in a fashion that still gives the taxpayer a chance to not see the money invested as a total loss, and to get the economy stronger.
The inflation question ties right into this. A stronger dollar (gee, maybe even tying the dollar to something real again) would ease commodity price increases. Ending stock shorting and stringent controls on commodity trades would ease prices more, and get people feeling better about the stock market and their retirement accounts. Heating oil season is almost upon us, and while I have no answer specifically of how to moderate that -- I'm sure some bright minds can fnd a way to prevent that from being the next shock on the public.
I personally am a fan of nuclear energy. We need to improve the infrastructure of our energy grid -- we lose too much energy simply creating and transferring it. Solar power may not be feasible everywhere but here in southern California it is criminal NOT to have whatever tax breaks necessary to get people developing and using it.
Overall, I agree with Ming's comments on my mortage plan. My plan as proposed would need EXTENSIVE overhauls -- it was (*blush*) a little bit off the top of my head.
However, some tweaks might get it back in shape. The largest and most deserved criticism is that it rewards people who took equity $ out and raised their mortgage. So we need some sort of limitation on what amount over their original mortgage can be refinanced. Perhaps the higher of what they originally bought it for OR the current appraisal. Remember, the whole point of MY bailout is not to reward the companies who packaged and underwrote the CDOs, but to simply allow real homeowners a way to keep their home and avoid foreclosure. The amount over what is refinanced up to wht is owed would be eaten by the taxpayer -- but with some of those bad loans off the books, the credit freeze would thaw more quickly. It is not perfect, but no bailout CAN be perfect. I do see much pain ahead if there is not an answer to some of these issues soon.
On a totally different topic, Elan announced their earnings call will be in late October. We will get to see how the two PML cases afftected Tysabri sales and uptake. My conjecture, from hearing from several practicing neurologists, is that there was VERY LITTLE drop-outs and we will actually still see a new gain of patients. My present-value discounted share price of Elan, just from Tysabri sales projected through 2011, indicate a price of somewhere around $18 to $20 today. Seeing as we are at $10ish, I think it is a screaming buy.
Sometime in October we will also find out if Dendreon's Provenge passed the interim look successfully or not. As a reminder, the interim peek must meet an extremely high statistical significance barrier. This is a good thing -- you don't want companies able to halt trials and start marketing drugs until thoroughly vetted. But with Provenge, we already have two completed Phase III trials, one with startlingly significant results. Analysts seem to be pretty much disregarding any chance of an interim success -- but I think there are better than 60% odds of a successful interim. I say this because the company got the FDA to agree to amend the SPA for the trial, increasing the interim death events and lowering the final number. They admitted this lowered the power of the final, if it is needed. I don't think they would have pushed for something that lowered (even slightly) the chances of the final unless it truly has a decent chance at the interim.
Vexingly, that means there is a 40% chance of a failure at the interim and we may see sub $3 if that happens. I good tactic might be to buy the shares at $5.70 and sell the $10 or $15 May 2009 calls. You will make 20% or so for 8-9 months on the calls and by mid next year the stock should recover should the interim fail. If successful, you get the premium and get called away next May at the $10 or $15 mark -- doubling or tripling your money. A 2 or 3 bagger at best and hardly any downside risk at worst.
The other good news? Dendreon announced at a presentation that they intend to file an Investigational New Drug (IND) application for their TRP-P8 small-molecule by year end. It is intended to treat prostate, breast, ovarian cancers and melanoma. Totally different method of action from their active cellular immunotherapies such as Provenge, so they are not a "one-trick pony" anymore.
Regards,
Trond
Wednesday, September 17, 2008
Trond's World returns!
Hi there all,
Long time no post – I am swamped at work and a little weary of the overall market slump. When the overall market is against you and you are a perma-bull, then you do three things.
First, double check your stocks to ensure nothing has changed. If there are still the compelling reasons to own them as when you bought them in the first place, then you’re okay.
Now, IF you own them in a taxable account and you truly feel it may be quite some time before they come around, then you may want to sell some shares, take the tax loss, and wait 31 days to repurchase them. (31 days will maneuver you around the IRS “wash sale” rules)
Second, simply be patient. In my experience, it is nearly exactly when everyone gives up, that the market rebounds. You only have money in the stock market that is long term anyways, right? *grin*
Finally, when something you have your eyes on has dropped and dropped, and you still feel it is compelling enough, BUY. You can wait forever, trying to get the exact bottom and then when things do turn around, you put off buying because you perversely WANT it to go down again so you can buy near the low point.
Warren Buffett has famously said, “Be fearful when others are greedy, and greedy when others are fearful.” Fear runs rampant right now – so it may be time to cast around for bargains.
Note: I would still stay away from real estate, financials, and insurance stocks right now – I think there is still some pain left to come.
I’m glad the SEC has finally (sort of) cracked down on naked short selling today, but there is still some business to take care of. I’d like to see the uptick rule replaced – heck – I’d like to see ALL short selling disallowed. It creates artificial liquidity (= supply) which by nature dampens stock prices. But it’s a step in the right direction.
Finally, it has been too long since I’ve done anything with the Port24. Everything is depressed enough that I dislike selling calls – to get any premium, I risk getting called away at a price far below what I paid. I will hold what I have for a recovery, and actually engaged in my #3 point above – I bought some more today!
600 Elan at $10.32, 1500 Sangamo at $6.36, and 3000 ArQule at $2.91.
My cash is around $3470 and my portfolio is down a whopping 30% at this point.
I see a modest rebound for Elan, and shortly – there is an MS convention starting today and we should see some news on the recent PML cases from Europe. From everything I’ve heard and read, patients are NOT running away from Tysabri. Oct/Nov news of patient counts will probably come as a surprise to most analysts.
Regards,
Trond
Long time no post – I am swamped at work and a little weary of the overall market slump. When the overall market is against you and you are a perma-bull, then you do three things.
First, double check your stocks to ensure nothing has changed. If there are still the compelling reasons to own them as when you bought them in the first place, then you’re okay.
Now, IF you own them in a taxable account and you truly feel it may be quite some time before they come around, then you may want to sell some shares, take the tax loss, and wait 31 days to repurchase them. (31 days will maneuver you around the IRS “wash sale” rules)
Second, simply be patient. In my experience, it is nearly exactly when everyone gives up, that the market rebounds. You only have money in the stock market that is long term anyways, right? *grin*
Finally, when something you have your eyes on has dropped and dropped, and you still feel it is compelling enough, BUY. You can wait forever, trying to get the exact bottom and then when things do turn around, you put off buying because you perversely WANT it to go down again so you can buy near the low point.
Warren Buffett has famously said, “Be fearful when others are greedy, and greedy when others are fearful.” Fear runs rampant right now – so it may be time to cast around for bargains.
Note: I would still stay away from real estate, financials, and insurance stocks right now – I think there is still some pain left to come.
I’m glad the SEC has finally (sort of) cracked down on naked short selling today, but there is still some business to take care of. I’d like to see the uptick rule replaced – heck – I’d like to see ALL short selling disallowed. It creates artificial liquidity (= supply) which by nature dampens stock prices. But it’s a step in the right direction.
Finally, it has been too long since I’ve done anything with the Port24. Everything is depressed enough that I dislike selling calls – to get any premium, I risk getting called away at a price far below what I paid. I will hold what I have for a recovery, and actually engaged in my #3 point above – I bought some more today!
600 Elan at $10.32, 1500 Sangamo at $6.36, and 3000 ArQule at $2.91.
My cash is around $3470 and my portfolio is down a whopping 30% at this point.
I see a modest rebound for Elan, and shortly – there is an MS convention starting today and we should see some news on the recent PML cases from Europe. From everything I’ve heard and read, patients are NOT running away from Tysabri. Oct/Nov news of patient counts will probably come as a surprise to most analysts.
Regards,
Trond
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