John R. writes, "Have you seen the recent price action in Cel-Sci ( CVM)? There are claims of a buyout, rumors of a Teva Pharmaceuticals interest, LEAPS, new valuations up to $44 billion (LOL) and all the other old pump-and-dump claims this company has been through over the past decade. Please add some of your wisdom to this huge debacle being created on the wires and message boards. Thanks."
Via Twitter, @DLesh asks, "Is Pops going to hit big for me with Vivitrol? I am long and strong Alkermes ( ALKS)." I like Alkermes, although I like the stock a lot more when it was trading at $10 this past spring than I do now that shares are around $14. The "Pops" @DLesh mentions is Alkermes CEO Richard Pops, who gets two backslaps from me. First, for being one of the only biotech/drug CEOs on Twitter (follow him @popsalks); and two, for the overwhelmingly positive vote last week from the FDA advisory panel which reviewed the company's Vivitrol opioid therapy for the treatment of opioid addiction. Well done, Senor Pops! I have reasons to be less bullish on Alkermes at $14: Can Alkermes turn Vivitrol opioid into a successful and profitable product? Vivitrol for alcohol addiction has not been a moneymaker for the company. The new opioid addiction indication should garner more acceptance from addiction treatment specialists, but is that enough to make the product a meaningful growth driver? Alkermes still derives the bulk of its revenue and stock market value from the royalties on Risperdal Consta sales received from Johnson & Johnson ( JNJ). However, Consta sales and growth are under pressure from other newer schizophrenia drugs, including J&J's once-monthly version of Risperdal. Lastly, Alkermes' stock price could get another a short-term bump if FDA approves the diabetes drug Bydureon on Oct. 22. (Alkermes will receive royalties on Bydureon sales.) Bydureon's commercial prospects, however, are up in the air because competition in the so-called GLP-1 market is fierce. Looking further ahead, watch Alkermes' internal drug pipeline. Pops has the company working on some interesting projects. Right now, investors aren't paying much attention or giving Alkermes credit for the work, which is mostly in early stages.
I've been covering biotech investing for so long now, I thought nothing -- no matter how egregious -- could shock me anymore. Then, I opened an email from BFB: "I read your two Rodman & Renshaw pieces, and have something that might amuse you. One of the companies there was Advaxis ( ADXS). I have some shares (a lot fewer than before) but I didn't get around to reading the full SEC filings until it was too late. Anyway, a kerfuffle has erupted on the message boards for Advaxis because the filings revealed that the CEO has a history, not a pleasant one, with the SEC." BFB's email contained some links, which is how I learned that Tom Moore, the former CEO of the failed, disgraced and now blown-up human blood substitute company Biopure, somehow managed to land another job in the biotech/drug sector as the chief executive of Advaxis. And Moore has been running Advaxis since 2006. Wow. That is unfreakingbelievable.
More Twitter. @Pelion2001 comments, " Cell Therapeutics ( CTIC) got the votes -- another rabbit out of the dilution hat." That's right. Cell Therapeutics won shareholder approval to raise the number of authorized shares to 1.2 billion from 800 million. Congratulations, this means Cell Therapeutics CEO Jim Bianco now has another 400 million shares to sell to hedge funds and stock flippers at less-than-market prices. The coming financings will keep the lights on at Cell Therapeutics for a little longer while existing shareholders get diluted. What the new shares or cash will probably not do is change the company's lousy fundamentals.
Craig L. asks, "Thanks for doing the Arena Pharmaceuticals ( ARNA) lorcaserin live blog. It was helpful and interesting. I am curious to hear more from you on Orexigen Therapeutics ( OREX) if you have time to address it. It seems baffling to me, but you are more knowledgeable than I about these drugs. I just don't understand the move." Craig refers to the sharply higher move in Orexigen immediately following the FDA advisory panel's negative vote on Arena's obesity drug lorcaserin. Orexigen roughly went from $5 to $7 but has now given up about half that gain. Baffling is a good way to describe the reaction. With Arena and Vivus knocked down by FDA advisory panels, I assume traders viewed Orexigen as the last obesity drug play standing. Couple that with a paucity of shares to short and the stock moved higher. From a fundamental perspective, I see Orexigen having a rough go at its own FDA advisory panel scheduled for Dec. 7. Orexigen has only one year of Contrave weight-loss data to present to the panel and the data are riddled with questions about cardiovascular and other side effects. After Arena and Vivus, we know the regulatory bar for obesity drugs is set high. You can't rule out an Orexigen victory on Dec. 7, but I'd be surprised if that happened. And yes, absolutely, I will be live-blogging the Orexigen FDA panel on Dec. 7. I've done two of these obesity drug death matches so far, so it's time for the trifecta.
I received a lot of negative pushback (mostly from Arena shareholders, I assume) for the healthcare buyside investor poll I conducted about lorcaserin's chances at the FDA advisory panel meeting. (75% of the survey's respondents predicted -- accurately, it turns out -- that the panel would reject lorcaserin.) Reg M.'s email was typical of the criticism I received. "I'm curious as to why you would poll hedge fund managers as opposed to medical physicians. Wouldn't that be more relevant information? Hedge fund managers most likely are biased as they could have a binary position in Arena while doctors would not. Also, it would be helpful to know why you thought it would be helpful to do this at this time." My periodic buy-side polls are meant to provide readers (mainly retail investors) with a snapshot of what Wall Street pros are thinking about a particular stock or subject. The poll isn't scientifically conducted. I don't expect readers to take the poll's findings as absolute truth. It's just a way for me broadly and quickly canvas buyside investors (yes, mainly biotech hedge funds) that I speak with on a regular basis as part of my job. Understanding their sentiment on Arena was interesting to me and I hope to you as well. Are my hedge fund sources biased? Depends on the definition. It's not helpful to me (or you) if my survey respondents have no opinion or position in the stock being surveyed. Hedge funds are in business to make money for their investors. If a hedge fund manager thinks Arena is going to get dinged and takes a short position in the stock as a result, that's bias, but it's bias that another investor also interested in Arena should want to know about. A poll of doctors might be helpful but doctors, in my experience, tend to be lousy investors. (Sorry docs, but I've talked to too many of you who know a lot about medicine but really don't understand how stocks work.) Biotech and biotech investing aren't necessarily the same. --Written by Adam Feuerstein in Boston. >To contact the writer of this article, click here: Adam Feuerstein. >To follow the writer on Twitter, go to http://twitter.com/adamfeuerstein. >To submit a news tip, send an email to: email@example.com.