In reading through twitter and blogs tonight, I'm thinking this IRAQ issue and oil jumping could start a market pullback. Can just hear the "oil is going up, so retail will be down" being the cause. WTIC is still $95 out a year in the futures, so no real concern yet, but people are seeming too confident about things and that is often when the market smacks you down.
So, I'm not going to sell anything I like because of this, but I may trim some that are getting high and would likely hold off on buying anything new until I see how this shakes out.
Not thinking this is the top of the bull or anything like that and thinking we have a long way to go, but just thinking a little more tactically for the near term.
The last HCV pure play: Transitioning coverage with Buy and $11PT The recent acquisition of Idenix by Merck has shifted our view on what is needed to “de-risk” assets in HCV and now see the upcoming 7-day read-out as a key event that should drive strategic interest. Prior to the IDIX deal we had seen ph2 combo data as necessary to better define the clinical profile of a nuc, but think that asset scarcity may trump this view and believe pre-clinical and 7-day data may be sufficient to justify investment in the space. The competitive process behind the IDIX deal underscores our view that a nuc is needed to be successful in HCV, with the opportunity beyond GT1 a key focus. While we see differences between IDIX and ACHN (including nuc IP and insight into FDA nuc safety concerns and pre-clinical requirements), with a market cap of ~20% vs. the IDIX deal, we believe the discount may indeed be overdone. Key points from our thesis: Scarcity value should drive interest [1] Current valuation suggests a compelling risk/reward ahead of 7-day nuc data in 2H14 which could prove sufficiently de-risking for strategic acquirers. [2] Given the competitive process behind the IDIX deal, we believe there is still considerable interest in HCV with JNJ, ABBV, and BMY the most obvious partners. While we view the ph2 nuc + NS5a combo data as the more important dataset, it is clear that once a process is started, pharma is willing to take risk. [3] Beyond strategic value, the current development plan is sound and offers an alternate scenario if ACH-3422 fails. The recent lift of the sovaprevir clinical hold is peripheral however to our bull case on nuc scarcity. [4] Our analysis of the HCV market suggests a long high revenue tail. Valuation still compelling; potential for re-rating on 7-day data, M&A Despite the recent 100%+ move in ACHN shares, we still see material upside from current levels and view the current valuation as offering asymmetric risk/reward ahead of the near-term catalyst path. Our revenue estimates move higher on increased confidence in our base-case scenario and risk-adj. revenue from the nuc program. Valuation: Buy with $11 price target by DCF, SOTP (Neutral w/ $3.50 prior) Upgrade to Buy with a new price target of $11. Our price target includes a scenario to reflect potential take-out and M&A.
per UBS, SNSS 158% upside with 80% downside, options anyone?
See reasons to believe in VALOR; initiate with Buy and $14 PT Key points from our analysis: [1] SNSS provides an exceptionally high risk/reward ahead of the ph3 VALOR read-out in 2H14. We are positively biased on the trial and see asymmetric upside on favorable data. [2] By some metrics, the current valuation implies <20% probability of success to the study (which in our view is clearly overdone). Of note, the trial was designed to maximize the likelihood of success (even with small numerical benefit over placebo), although the adaptive trial design is largely misunderstood by the street. [3] r/rAML represents a clear unmet need in oncology, and our checks suggest broad adoption on positive data with $750m+ in un-adjusted sales. [4] Previous studies in AML have provided a guide for SNSS, with special care taken to ensure proper study conduct and entry criteria. [5] The interim DSMB review suggests the drug is at least minimally active, and in our view lowers risk to positive outcome. The VALOR study is a high-risk binary event, and it should work While our conviction on SNSS is largely driven by what we view as asymmetric risk/reward at current levels, our review of the vosaroxin program indeed suggests reason to believe the ph3 VALOR study has >50% chance of being successful. Notably, the clinical data available to-date demonstrates an active drug in AML, although we do acknowledge higher risk from the disappointing LI-1 study in elderly AML late last year. Implications from the adaptive trial design are key to our confidence, as the up-sized trial suggest a narrow band around HR=0.77 at the interim, with the larger study providing sufficient statistical power to show a significant benefit even with low delta. Our Call: Downside risk is real but Buy on upside potential Our $14 PT implies +158% from current levels, and yet still includes meaningful risk-adjustment to our vosaroxin model. If data play out favorably we see upside to the $20s, although conversely a negative outcome could drive shares to cash, or ~$1.00. While the -80% downside is real, we see higher likelihood of positive data. Valuation: Buy with $14 price target by sum of the parts and DCF-basis Our model assumes 60% probability of success to VALOR, with modest off-label use.
Mark, BTW, glad Patricia only has to do radiation, from talking to people at MD Anderson its much easier than chemo.
Chemo has a lot of nasty side effects, after chemo 3 I felt like the walking dead and had to delay Chemo 4, but feeling better. I now in a 7 day window where you feel okay prior to the next jack-up.
Had to much caffeine this morning, not suppose to during chemo, oh well.
Transitioning coverage with Buy rating and $74 price target. Key points from our analysis: [1] the market reaction to the PEG-PAL delay and Vimizim launch suggests an opportunity for longer-term investors. Indeed, with Vimizim tracking above-expectations, a solid launch should sustain momentum until 2015, which will be data-rich. [2] The current valuation implies very little pipeline value despite the most robust offering of distinct orphan drug products in biotech. We include 4 new pipeline programs in our model, which is likely too conservative and should change as the programs progress. [3] On valuation, our positive outlook does however require assigning an orphan premium, which we think is justified. [4] Regarding a key investor concern, we can see the light at the end of the tunnel (profitability) and see continued investment in R&D as key long-term driver. [5] The delay in the PEG-PAL data impacts the catalyst path, but is good drug development. Adding risk-adjusted pipeline, 2015 will be an eventful year With three pivotal data read-outs expected next year (PEG-PAL, BMN-701, BMN-190), 2015 is setting up to be potentially transformative for BMRN. Beyond the data, we model the company having 9 products approved by 2016 (vs. 5 today), with BMN-673 potentially coming to market by YE16 as well. While we include risk-adjustments to each of the pipeline programs, specifics of each trial as well as supporting data suggest that our discounts may be overdone. Notably, our checks have suggested PKU docs are not skeptical of PEG-PAL data, but instead are more cautious on uptake given potential compliance concerns. As such we were encouraged by the decision to delay the study as having a neurocognitive benefit on the label offers a much more attractive profile. Our Call: See upside to Vimizim but pipeline larger value driver The biggest question we get on BMRN is whether the stock will work this year before things get exciting again with data in ‘15. The short answer is yes, we think a strong Vimizim launch should sustain momentum and give confidence ahead of pipeline data. Valuation: Buy with $74 price target Our model assumes $69m in 2014 Vimizim sales, growing to ~$450m by 2018. Our $74 price target is derived using a blend of both DCF and adjusted-revenue based multiples analysis
Also pointed out the Permian area is awash in trapped oil, I think that's good for ALDW in Big Spring? EPD Owns some of the major pipelines to get it into the Houston refinery hub.
CIE - I wonder if/why this one has not participated in the Iraqi oil rally that began with already impressive oil prices? High oil prices can only mean demand is greater than supply, despite all of TSLA's efforts. It's official, one of the Japanese car makers is introducing an hydrogen vehicle this December, wonder where the filling station will be?
I agree with Mark on the biotechs but in a raging bull market for biotechs the risks are not as high as they used to be...at least that's how it seems to me. Obviously going all in on something in this space is nuts.
T3 - That's what I've heard about chemo from family that have gone through it. What determines if/when the next round begins? I hope you feel better man.
By the way, can we please get an editor on these post tit-els?
Picked up some more SNE today at $16.15 avg. Overall avg is $16.155. I still think this one rips tits eventually. It's pretty much forgotten by traders at this point and I see plenty of long term catalysts, the most significant (yet least obvious) of which is just a change in sentiment. Perfect example is NOK. People hated it at $3.50 but love it at $8.
I got on a little late today but I bought SPWR at $35.45. I was watching it all day thinking it would show its hand by the close but it looks like it did it before the close. Looks like its finally breaking out. Even if it falls back a bit I think it's heading much higher over time.
New and Improved version of Google Glass http://static5.businessinsider.com/image/539ad0cceab8ea1961f6f6f1-1200-572/screen%20shot%202014-06-13%20at%206.17.23%20am.png
In reading through twitter and blogs tonight, I'm thinking this IRAQ issue and oil jumping could start a market pullback. Can just hear the "oil is going up, so retail will be down" being the cause. WTIC is still $95 out a year in the futures, so no real concern yet, but people are seeming too confident about things and that is often when the market smacks you down.
ReplyDeleteSo, I'm not going to sell anything I like because of this, but I may trim some that are getting high and would likely hold off on buying anything new until I see how this shakes out.
Not thinking this is the top of the bull or anything like that and thinking we have a long way to go, but just thinking a little more tactically for the near term.
The Feb iH&S target was met:
ReplyDeletehttp://www.finviz.com/quote.ashx?t=spy&ty=c&ta=1&p=d
A 10.5% shot on the TVIX
ReplyDeleteCould this be what sparks sne?
ReplyDeletehttp://mobile.bloomberg.com/news/2014-06-12/sony-tv-sales-rise-30-in-first-quarter-most-since-2012.html
OPEN - Bet $1 this one gets bought out soon.
ReplyDeleteper UBS, ACHN
ReplyDeleteThe last HCV pure play: Transitioning coverage with Buy and $11PT
The recent acquisition of Idenix by Merck has shifted our view on what is needed to “de-risk” assets in
HCV and now see the upcoming 7-day read-out as a key event that should drive strategic interest. Prior
to the IDIX deal we had seen ph2 combo data as necessary to better define the clinical profile of a nuc,
but think that asset scarcity may trump this view and believe pre-clinical and 7-day data may be sufficient
to justify investment in the space. The competitive process behind the IDIX deal underscores our view
that a nuc is needed to be successful in HCV, with the opportunity beyond GT1 a key focus. While we
see differences between IDIX and ACHN (including nuc IP and insight into FDA nuc safety concerns and
pre-clinical requirements), with a market cap of ~20% vs. the IDIX deal, we believe the discount may
indeed be overdone.
Key points from our thesis: Scarcity value should drive interest
[1] Current valuation suggests a compelling risk/reward ahead of 7-day nuc data in 2H14 which could
prove sufficiently de-risking for strategic acquirers. [2] Given the competitive process behind the IDIX
deal, we believe there is still considerable interest in HCV with JNJ, ABBV, and BMY the most obvious
partners. While we view the ph2 nuc + NS5a combo data as the more important dataset, it is clear that
once a process is started, pharma is willing to take risk. [3] Beyond strategic value, the current
development plan is sound and offers an alternate scenario if ACH-3422 fails. The recent lift of the
sovaprevir clinical hold is peripheral however to our bull case on nuc scarcity. [4] Our analysis of the HCV
market suggests a long high revenue tail.
Valuation still compelling; potential for re-rating on 7-day data, M&A
Despite the recent 100%+ move in ACHN shares, we still see material upside from current levels and
view the current valuation as offering asymmetric risk/reward ahead of the near-term catalyst path. Our
revenue estimates move higher on increased confidence in our base-case scenario and risk-adj. revenue
from the nuc program.
Valuation: Buy with $11 price target by DCF, SOTP (Neutral w/ $3.50 prior)
Upgrade to Buy with a new price target of $11. Our price target includes a scenario to reflect potential
take-out and M&A.
TBT - Wow, trades like YELP.
ReplyDeleteper UBS, SNSS 158% upside with 80% downside, options anyone?
ReplyDeleteSee reasons to believe in VALOR; initiate with Buy and $14 PT
Key points from our analysis: [1] SNSS provides an exceptionally high risk/reward ahead of the ph3
VALOR read-out in 2H14. We are positively biased on the trial and see asymmetric upside on favorable
data. [2] By some metrics, the current valuation implies <20% probability of success to the study (which
in our view is clearly overdone). Of note, the trial was designed to maximize the likelihood of success
(even with small numerical benefit over placebo), although the adaptive trial design is largely
misunderstood by the street. [3] r/rAML represents a clear unmet need in oncology, and our checks
suggest broad adoption on positive data with $750m+ in un-adjusted sales. [4] Previous studies in AML
have provided a guide for SNSS, with special care taken to ensure proper study conduct and entry
criteria. [5] The interim DSMB review suggests the drug is at least minimally active, and in our view
lowers risk to positive outcome.
The VALOR study is a high-risk binary event, and it should work
While our conviction on SNSS is largely driven by what we view as asymmetric risk/reward at current
levels, our review of the vosaroxin program indeed suggests reason to believe the ph3 VALOR study has
>50% chance of being successful. Notably, the clinical data available to-date demonstrates an active
drug in AML, although we do acknowledge higher risk from the disappointing LI-1 study in elderly AML
late last year. Implications from the adaptive trial design are key to our confidence, as the up-sized trial
suggest a narrow band around HR=0.77 at the interim, with the larger study providing sufficient
statistical power to show a significant benefit even with low delta.
Our Call: Downside risk is real but Buy on upside potential
Our $14 PT implies +158% from current levels, and yet still includes meaningful risk-adjustment to our
vosaroxin model. If data play out favorably we see upside to the $20s, although conversely a negative
outcome could drive shares to cash, or ~$1.00. While the -80% downside is real, we see higher
likelihood of positive data.
Valuation: Buy with $14 price target by sum of the parts and DCF-basis
Our model assumes 60% probability of success to VALOR, with modest off-label use.
God, how would anyone really know with these. I think the best we can do in all honesty is look for Co. with strong management like BMRN.
Deletelike it says, Mark, high risk binary event aka coin flip. I'd only touch the above with options and casino money.
DeleteBut look at what TOF did on ACHN 3 or 4 year returns for most people.
Mark, BTW, glad Patricia only has to do radiation, from talking to people at MD Anderson its much easier than chemo.
DeleteChemo has a lot of nasty side effects, after chemo 3 I felt like the walking dead and had to delay Chemo 4, but feeling better. I now in a 7 day window where you feel okay prior to the next jack-up.
Had to much caffeine this morning, not suppose to during chemo, oh well.
Yeah, but you could just as easily be on the other side when it went from 7.50 to 3 overnight on an FDA halt. But I'm turning into a wuss it seems!
DeleteStays strong bro.
DeleteNo man just, your just being rational in an irrational world.
DeleteIn order to get a multi year return you have to take on the risk and there's the rub.
DeleteBMRN its biotech day at UBS
ReplyDeleteTransitioning coverage with Buy rating and $74 price target.
Key points from our analysis: [1] the market reaction to the PEG-PAL delay and Vimizim launch suggests
an opportunity for longer-term investors. Indeed, with Vimizim tracking above-expectations, a solid
launch should sustain momentum until 2015, which will be data-rich. [2] The current valuation implies
very little pipeline value despite the most robust offering of distinct orphan drug products in biotech. We
include 4 new pipeline programs in our model, which is likely too conservative and should change as the
programs progress. [3] On valuation, our positive outlook does however require assigning an orphan
premium, which we think is justified. [4] Regarding a key investor concern, we can see the light at the
end of the tunnel (profitability) and see continued investment in R&D as key long-term driver. [5] The
delay in the PEG-PAL data impacts the catalyst path, but is good drug development.
Adding risk-adjusted pipeline, 2015 will be an eventful year
With three pivotal data read-outs expected next year (PEG-PAL, BMN-701, BMN-190), 2015 is setting up
to be potentially transformative for BMRN. Beyond the data, we model the company having 9 products
approved by 2016 (vs. 5 today), with BMN-673 potentially coming to market by YE16 as well. While we
include risk-adjustments to each of the pipeline programs, specifics of each trial as well as supporting
data suggest that our discounts may be overdone. Notably, our checks have suggested PKU docs are not
skeptical of PEG-PAL data, but instead are more cautious on uptake given potential compliance
concerns. As such we were encouraged by the decision to delay the study as having a neurocognitive
benefit on the label offers a much more attractive profile.
Our Call: See upside to Vimizim but pipeline larger value driver
The biggest question we get on BMRN is whether the stock will work this year before things get exciting
again with data in ‘15. The short answer is yes, we think a strong Vimizim launch should sustain
momentum and give confidence ahead of pipeline data.
Valuation: Buy with $74 price target
Our model assumes $69m in 2014 Vimizim sales, growing to ~$450m by 2018. Our $74 price target is
derived using a blend of both DCF and adjusted-revenue based multiples analysis
"Recapitalizing Fannie/Freddie not viable--Treasury official"
ReplyDeleteSo then what's the plan?
APA - Cramer pumped this one, says it's comparatively cheap.
Also pointed out the Permian area is awash in trapped oil, I think that's good for ALDW in Big Spring?
DeleteEPD Owns some of the major pipelines to get it into the Houston refinery hub.
CIE - I wonder if/why this one has not participated in the Iraqi oil rally that began with already impressive oil prices?
ReplyDeleteHigh oil prices can only mean demand is greater than supply, despite all of TSLA's efforts.
It's official, one of the Japanese car makers is introducing an hydrogen vehicle this December, wonder where the filling station will be?
I agree with Mark on the biotechs but in a raging bull market for biotechs the risks are not as high as they used to be...at least that's how it seems to me. Obviously going all in on something in this space is nuts.
ReplyDeleteT3 - That's what I've heard about chemo from family that have gone through it. What determines if/when the next round begins? I hope you feel better man.
By the way, can we please get an editor on these post tit-els?
Picked up some more SNE today at $16.15 avg. Overall avg is $16.155. I still think this one rips tits eventually. It's pretty much forgotten by traders at this point and I see plenty of long term catalysts, the most significant (yet least obvious) of which is just a change in sentiment. Perfect example is NOK. People hated it at $3.50 but love it at $8.
AHP - There's the entry?
ReplyDeleteINVN - Rockin' this month.
ReplyDeleteI got on a little late today but I bought SPWR at $35.45. I was watching it all day thinking it would show its hand by the close but it looks like it did it before the close. Looks like its finally breaking out. Even if it falls back a bit I think it's heading much higher over time.
ReplyDeleteNew and Improved version of Google Glass
ReplyDeletehttp://static5.businessinsider.com/image/539ad0cceab8ea1961f6f6f1-1200-572/screen%20shot%202014-06-13%20at%206.17.23%20am.png
INTC - Recall this one under $20, now up 45% from that price.
ReplyDelete