RiverBabe's Baby Biotechs

[riverbabe]

Amln

7:36 AM today: Bristol-Myers Squibb (BMY) and AstraZeneca (AZN) win the battle for Amylin (AMLN), agreeing to buy the diabetes drug maker for $31/share (10% premium to Friday's close). The total size of the deal is $7B, and includes about $3.4B from AZN which will expand its diabetes collaboration with Bristol. (from Seeking Alpha).

I have a GTC bid in now for sell @ 30.99. We'll see how that goes... Billy, time to sell!

[riverbabe]

Appa (cont'd)

This company's (APPA) product reminds me of ALXA (Alexza Pharma). ALXA has an inhalation delivery system for a known and available med. Has had a difficult time getting FDA approval. In my early days of trading bios, I lost a boat-load of $$$ on ALXA. So I still have nightmares.

APPA has a polymer delivery system for a known and available med. Having difficult time getting FDA approval. Hmm... But it's a penny stock. I think P7 has bot the 17,500 shares sold so far today. I'm gonna wait till it gets back to its 0.16 52-WeekLow.

[riverbabe]

Appa

See Phoenix 7.

A.P. Pharmaceuticals

Basically they developed a polymer-based system for delivering a known drug, Granisetron, to combat nausea in chemotherapy. They submitted a NDA (new drug application) to the FDA in 2009 and it was not approved. Instead, they received the dreaded CRL (complete response lettter.)

From the website: "A.P. Pharma is a specialty pharmaceutical company developing pharmaceutical products using our proprietary BiochronomerTM polymer-based drug delivery technology. The Company’s primary focus is on its lead product candidate, APF530, which, during 2008, completed a pivotal Phase 3 clinical trial for the prevention of chemotherapy-induced nausea and vomiting (CINV). Results from that trial were announced in the third and fourth quarters of 2008. In May 2009, A.P. Pharma submitted an NDA for APF530 under section 505(b)(2) of the Federal Food, Drug and Cosmetic Act, whereby the Company can rely upon the FDA's prior safety and efficacy findings for APF530's active ingredient, granisetron. A.P. Pharma received a Complete Response Letter on the APF530 NDA and is targeting the resubmission of the NDA in mid-2012."

Important APF530 Milestones as of March 2012 are listed in the PDF file here: http://appharma.com/PDFs/Corporate%2...rch%202012.pdf.

Yahoo Zoo Board, good explanation of the CRL:
"Delay does not mean 'future approval'. From the FDA Website: 'A complete response letter provides a more consistent and neutral mechanism to convey that our initial review of an application is complete and we cannot approve the application in its present form. It provides a more consistent approach to informing applicants of changes that must be made before an application can be approved, with no implication regarding the ultimate approvability of the application. The adoption of complete response letters is one of the Agency’s commitments under the Prescription Drug User Fee Act (PDUFA).'
Complete response letters are issued only for applications that are not approved. The response deadline happened before the FDA could complete their review. We one can hope for is that the FDA will eventually approve APF530 but there is no assurance whatsoever this will happen. Personally, I feel AP Pharma's submission was not well presented nor complete. A thorough QT study should have been prepared and submitted along with application as company not surprised by this request given history of FDA. Evidently, the presentation and analysis was not up to FDA standards as evidenced by the FDA's request for a re-presentation and re-analysis of certain Phase 3 clinical trial data. The biggest risk (IMO) rests with the delivery system which completely surprised me given this is not the first time they have been before the FDA with this technology (APF112). Given the novelty of their delivery system, they should have anticipated questions, concerns, and discomfort from the review panel. Questions about the transfer process, certain components used in the dosing system and the potential for faulty administration in patients should have been addressed up front in their submission and in early conversations with the FDA. My interpretation of this is the FDA threw this NDA back into their laps and said clean this mess up and re-present the data in clear and understandable terms with appropriate documentation and analysis. There is much to be done and hopefully they will get their act together and win over the minds of the FDA. The submission was a screw up and time is now of the essence. I anxiously wait for an update regarding the status of the NDA."

to be continued.....

[riverbabe]

RB:

My scans showed up NPSP A pharma company that had a drug recommended for approval in Europe. Has it ever showed up in your universe?

Dog, NPSP is an orphan drug producer. REPLACE for the treatment of a rare parathyroid disorder has just-reported positive Phase 3 results. Another drug, GATTEX for short bowel syndrome just received approval in Europe and is up for FDA decision (PDUFA) on September 28th. Look for news of any FDA advisory panel ahead of this. Up-to-date news generally appears on twitter.com (search box put in $NPSP.) Biorunup tweet there says, "8/28 FDA Gastro AdCom notice is out. No mention of $NPSP... Strange, they said they expected a panel, I thought this would be the one." Watch for a run up starting maybe in late July in anticipation of positive (or not) FDA decision.

[Deaddog]

RB:

My scans showed up NPSP A pharma company that had a drug recommended for approval in Europe. Has it ever showed up in your universe?

[riverbabe]

Amln

River,
Do you consider AMLN a baby biotech or is the market cap too big? Morpheus and some other stock services are high on AMLN strictly on technicals which are certainly in this case somewhat driven by the news. A gain is a gain any way you can get it, right ? Mrs. Billy says she'll start bringing home her BioTechniques magazine from the lab although I'm illiterate in that field.

-----------billy

Bill, I consider AMLN a takeover target with a nice anti-diabetes pipeline and sales. The company has put itself up for sale, thanks to Carl Icahn. I had thought it would have been sold by now. Also the FDA needs more information about an extended usage of one of its products. May have to wait until Sept. now. Hate tieing up my $$ this way. But am thinking of adding some if it pulls back. Looking for 30+. No stops below. Look how stops got taken out in ARNA this AM!!

[billyjoe]

Did I mention Amalyn (AMLN) is a takeover target? The big news today is the big guns are after AMLN, with first bids due in two weeks. (Thank you Carl Icahn!) http://www.bloomberg.com/news/2012-0...tml?cmpid=yhoo

River,
Do you consider AMLN a baby biotech or is the market cap too big? Morpheus and some other stock services are high on AMLN strictly on technicals which are certainly in this case somewhat driven by the news. A gain is a gain any way you can get it, right ? Mrs. Billy says she'll start bringing home her BioTechniques magazine from the lab although I'm illiterate in that field.

-----------billy

[riverbabe]

Vvus Arna amrn

These are the results of a poll of bio lovers re. ARNA, VVUS & AMRN. Note that in previous polls the results have been right 60% of the time. http://www.thestreet.com/story/11584...stors-say.html

[riverbabe]

Hi billy. Have HQL in my IRA and reinvesting divis. Thanks to your recommendations from months & months ago. Thanks for the update!

[billyjoe]

River,
Just received a semiannual report from HQL Life Sciences a closed end Health Fund. For the six months ending 3/31 it has returned 42.21% vs. 32.35% for the NASDAQ Biotech Index, NBI.

---------HQL is within 5% of a 5 year high, Pays a 8.34% dividend, and is aggressively buying back stock. Being a reinvesting holder for nearly 3 years I'm up 65% and wonder why it's doing so well. Picking individual biotech companies is very difficult. Their largest holdings are: Teva, Celgene, Alexion, Gilead, Akorn, Vertex, Mylan, Perrigo, Regeneron, and Illumina.

---------Daniel Omstead, president of the company speculates on their success. In summary he cites increased M&A activity, positive clinical trial data, and Favorable Supreme Count rulings expected to uphold most of the
Affordable Care Act.

---------Some of the M&A mentioned: Express Scripts acquiring Medco, Roche Holding AG attempt to acquire Illumina (failed), Amgen/Micromet, Celgene/Avita Medical, Cubist/Adolor, Jazz/Azur, Watson Pharm/Actavis.
This activity keeps interest in the sector booming.

---------Clinical trial data highlights include rapid advances in Hepatitis C treatment such as Vertex and Merck's polymerase inhibitor drugs, Incivek and Victrelis, very effective treatments with no increase in side effects. Pharmasset, now owned by Gilead Sciences has another breakthrough Hepatitis drug used in combo with existing treatments that looks like another blockbuster. Other promising developments are Biogen Idec's BG-12 for Multiple Sclerosis, Vertex's Kalydeco for Cystic Fibrosis, Seattle Genetics Adcetris /Hodgkins Lymphoma , Amlin's Bydureon/Diabetes, and Takeda/Affymax's Omontys for anemia. The FDA's approval of these drugs has generated continued excitement in the industry.

----------Finally, the Supreme Court held hearings in March that will result in rulings in July that should uphold much of the Affordable Care Act of 2010. The 4 major points are the constutionality of required health care insurance purchase , whether the requirement can be separated from the rest of the ACA, constitutionality of Medicaid expansion, and whether the Court can rule on the first 3 items before 2014.

---------------billy

[riverbabe]

Shorting strategy

An article appeared in Seeking Alpha 0n May 9, 2012 describing a simple strategy for shorting a baby biotech after FDA approval. I have not tested this strategy, nor do I vouch for it, but it's worth a thought.

1. Short the stock at the first open after the news release. If the approval announcement is after hours or intra-day, sell at the open the next day. If the approval coomes pre-market, sell at the open the same day.

2. Buy back at the close on subsequent days.

River

[riverbabe]

Yes, I watch the live blog from ASCO every year. When I find a list, I'll let you know. It changes periodically, so any list right now is preliminary until after the Abstracts are all in.

As promised, this is a partial ASCO abstract list:

http://www.thestreet.com/story/11539763/1/asco-12-abstract-dump-cancer-stocks-in-focus-update.html

[riverbabe]

Amln

Did I mention Amalyn (AMLN) is a takeover target? The big news today is the big guns are after AMLN, with first bids due in two weeks. (Thank you Carl Icahn!) http://www.bloomberg.com/news/2012-0...tml?cmpid=yhoo

[riverbabe]

River the Kentucky Derby is Saturday .....I think you have a better chance trying to pick the 1st place horse , than which biopharma will rocket up LOL.
Oh well I will try to follow the stocks above for possible breakouts....Take care ......and once again Thank You!

Forgot to mention, some of these have Advisory panel dates before the big decision date. These are hearings in front of independent professionals. The panel's decision recommending for approval or against is not binding on the FDA, but may give some indication as to how things are leaning. The panel decision can also provide a pop (or not). The closeness of the decision, e.g. 6:5, 10:1, 7:4, can indicate also. R/R still 1:1.

[Phoenix7]

River thanx

This is a list of 26 drugs facing FDA in 2012, for those with a strong heart, a lion's courage, (no comment on "brain") and $$$ to burn. Remember, you can always short these instead of long or play options. Either way the risk/reward is 1:1. Gulp. Soar or crash and burn.

http://www.thestreet.com/story/11516...l-in-2012.html

River the Kentucky Derby is Saturday .....I think you have a better chance trying to pick the 1st place horse , than which biopharma will rocket up LOL.
Oh well I will try to follow the stocks above for possible breakouts....Take care ......and once again Thank You!