News and Comments

Sequenom (SQNM): Looking for facts.

  Tuesday, March 23, 2010

After all we wrote about Sequenom, it looks as if we are somehow destined to further tackle this firm. Sequenom’s story is still unfolding. What happened to this firm’s stock this month reflects a general reality that goes beyond Sequenom, on Wall Street and off Wall Street. When some influential leaders decide to become misleaders, sincere observers and followers must develop protective strategies that help them accept or reject what the influential try to feed them. In the stock market, negative speculators have the advantage of possessing a superior weapon called fear, which positive analysts do not really have. Under some circumstances, by definition, negative becomes the synonym of fear. When people fall to fear, they cannot wait for rational explanations of negative speculation. They believe they have no time to lose in resorting to common sense. They feel compelled to escape from the source of their fears. In the stock market, this translates into selling the stock that somebody labeled as bad.

Assessment of public firms by positive and negative analysts is the kinetic energy behind the millions of shares traded daily, which makes the stock market so interesting and attractive. The war between the two opposing groups is excellent for traders who know how to synchronize their buying and selling with optimistic and pessimistic articles. Serious investors, though, those who really care about investing in promising firms, must have a plan to protect themselves from developing unfounded fear or baseless euphoria. The plan is simple. Look for facts that support the claims.

In the past few weeks, investors in SQNM got lost between the positive and negative analysts. The stock was around $5 when some analysts upgraded it, with one putting $16 as his SQNM target price. Investors rushed to buy SQNM. As the stock crossed $8 with very strong momentum, suddenly, negative articles demeaning the stock emerged. We were not convinced. The only fact they cited was the firm’s financials, which had nothing to do with our positive feeling towards the stock. As we said in our previous article, what motivated us to love Sequenom in the first place was our belief that the firm’s promises could generate billions of dollars for its shareholders. These promises are supported by the firm’s successful marketing of three tests; two of them relate to Sequenom’s non-invasive nuclear prenatal program. Moreover, one of Sequenom’s tests has enabled the distinction between maternal and fetal DNA for both male and female fetuses, which led us to believe that there is sufficient validation of the firm’s technologies behind the non-invasive prenatal test program.

After enormous efforts to cause a sell-off of SQNM through incessant negative campaigns of fear, the fear finally supervened. Helped by preprogrammed selling the stock lost around one third of its value. Today, we heard that Lazard Capital Markets analyst Dr. Sean Lavin upgraded his outlook to "Buy" from "Hold" with a $13 price target, citing the potential for the company to create a test for Down syndrome. The stock rebounded fiercely through a different kind of fear this time, i.e. losing a huge investment opportunity. Lavin said the company will likely create a test for Down syndrome with third-party data showing it to be more accurate than current screening. He said the nearly 30 percent drop in the stock value last week is an opportunity for investors. "We anticipate Sequenom finishing development of a Down (syndrome) test this year, running external trials in 2011, and launching a test in late 2011 or in 2012," he said in a note to investors. He said the company has risks, but its target markets are "too immense" and a successful test is too likely. In the U.S., the company could target a market worth more than $4 billion. With all that said, he added, an investment in the stock is "speculative and risky."

That’s what sincere analysts should say – to mention the risk and the reward. In Sequenom’s case, the reward is huge. The successful outcome of Sequenom’s tests will not stop at the two that have been launched and the expected successful outcome of the one for Down syndrome, but open the door to many tests, which would be big.
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Investors’ Rush To Buy ImmunoGen IMGN

  Friday, March 19, 2010

IMGN soared on Thursday, as investors did not miss the parts related to ImmunoGen in the article Robert Langreth, a senior editor at Forbes wrote about the pharmaceutical company Roche’s status and plans. In the article, Severin Schwan, Roche’s chief executive remind of his firm’s dominant position in the cancer drug market, stressing the fact that Roche’s cancer drug Avastin is hard to beat, regardless of what other pharmaceutical companies claim about their upcoming competing drugs. “In cancer, we are at the beginning,” Schwan told Forbes in an interview yesterday. “The barrier to beat our established drugs is very high. It is extremely difficult to find something better than Avastin whose sales approached $6 billion last year.”

The part related to ImmunoGen, though, came when the article described Roche’s plans. He wrote, “Roche is testing drugs called armed antibodies that combined targeted therapy with traditional toxic cell-killing drugs. The idea is that the antibody will deliver the toxic chemotherapy directly to the tumor, maximizing effectiveness and limiting side effects.” Is this not ImmunoGen’s drug? Indeed it is as investors who read the article confirmed their notion when it mentioned the armed antibody by name “T-DM1”, described it as much as possible, and confirmed that ImmunoGen is the developer of the drug.

Motivating IMGN’s rally yesterday is the part where the writer said, “Roche is in late stage testing of T-DM1 that chemically links Herceptin to a potent chemotherapy toxin. If the drug works, patients will take one drug for breast cancer instead of two or three. Roche, presumably, could charge a higher price for the two-in-one combo, especially if it has fewer side effects.”

Further exciting ImmunoGen’s fans was the part of the text that said, “Schwan swears there are no big more mergers in Roche’s future because we think it destroys a lot of value. We are going for targeted midsize acquisitions.”

Well, well, well. Reading the article’s description of ImmunoGen’s T-DM1 drug was enough for informed investors to connect the dots. ImmunoGen typically fits the description of what Roche is interested in. If taken over, the firm, which is a small size, the premium to be paid in case of acquisition would turn it into a midsize firm. In addition, investors know that ImmunoGen is not a single cancer drug firm, but has a pipeline of several conjugated monoclonal antibodies developed for several cancers. More important, it owns the TAP technology that made possible what defied other firms’ previous attempts, i.e., designing and developing monoclonal antibodies that carry highly toxic payloads, yet leave the normal cells intact because they released their toxic ammunition only inside the cancer cells.

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SEQUENOM (SQNM): Does Anyone Really Believe That Missing Analysts Expectations By Five Cents Should

  Wednesday, March 17, 2010

SEQUENOM (SQNM): Does Anyone Really Believe That Missing Analysts Expectations By Five Cents Should Cause a Sell-Off In A Fundamentally Sound Development-Stage Biotechnology Firm’s Shares?

To those who keep downgrading Sequenom we say, we would love to be your disciples on condition that you do not try to convince us that development-stage firms deserve to be downgraded and their stocks crushed because their quarterly reports show a loss of five cents more than analysts’ expectations. We will become your faithful followers if you tell us in straight sentences that the firm’s scientific fundamentals are dismal – its technologies are not working, its programs are not advancing and its future is bleak, which you certainly did not do yet.

We will do exactly what you recommend if you tell us something more convincing than the story of the five cents. Here is some help:

A few months ago, Sequenom has launched SensiGene™ Cystic Fibrosis (CF) Carrier Screening test.

- Do you believe the test has been launched?
- Do you believe the test is not working? If so, then explain why
- Will the test not sell? If so, why?

In Sequenom’s non-invasive nuclear prenatal program, the firm has launched SensiGene Fetal RHD Genotyping test, which was its first clinical laboratory test to be accomplished through its SEQureDx™ technology.

- Do you believe the test has been launched?
- If so, then do you believe the test is superfluous? If so, then could you please explain why do you think so?

In the same prenatal program, Sequenom has launched another test, the non-invasive SensiGene™ Fetal (XY) (Fetal Sex Determination) test, which is also powered by SEQureDx™ technology.

- Again we ask: Do you believe the firm has launched this test? Do you believe it is safe, accurate and highly specific and has the same accuracy reading the fetus sex early in pregnancy? If not, please explain.

- Do you believe that the test enabled the distinction between maternal and fetal DNA for both male and female fetuses? If so, then do you believe that the test validates the firm’s technologies behind the non-invasive prenatal test program?

Yes, we are ready to follow your negative recommendation about this biotech firm, but first, please tell us what you know and think about Sequenom’s MassARRAY® genotyping system? Do you like it? Do you believe that this system and other few similar systems are making a historical move into the clinical laboratory?

Did you know that by using Sequenom MassARRAY® genotyping, Children’s Hospital Oakland Research Institute and the University of Minnesota Cancer Center were able to find out that donors who have natural killer cell immunoglobulin-like receptor (KIR) haplotypes, would significantly improve treatment in patients with acute myelogenous leukemia (AML) who received hematopoietic cell transplantation (HCT) therapy. As a matter of fact, the AML patients who received T-replete hematopoietic cell transplantation therapy1 based on Sequenom MassARRAY® genotyping had significant survival benefit.

1. The complete results from the study are published in Blood (Volume 113, Number 3), the journal of the American Society of Hematology.

If you still believe that the five cent story that ate over 25% of SQNM’s price in two days based on your preaching is more important than the above story, then here is another story: Using an assay exclusively licensed from Sequenom, researchers published a study by the University of Michigan, which demonstrates that around 15% of women determined to be negative human papillomavirus (HPV) in the cervix with the standard HPV DNA test may actually be infected with the virus. Sequenom assay was able to detect the presence of high-risk HPV in 46.7% of women who tested negative by the commonly used Hybrid Capture 2 (HC2) test.

WOW!

You know what? Those who continue to believe that the missed five cents in the quarterly results of a firm that is still building its programs cannot be but irrational. You know how we know? Because the missed five cents are spent on the firm’s programs. Development-stage firms have to spend on building their programs before they cash in on them. By the way, the aforementioned test is another example of how the genomic knowledge is entering the clinic through new advanced DNA sequencers. In the meantime, it further validates Sequenom’s technology.

Sequenom is in the process of researching and evaluating a potential molecular diagnostic for the assessment of risk in developing age-related macular degeneration (AMD).

With regard to the T21 (Down syndrome) test, Sequenom said it is committed to the development of the noninvasive T21 test.

Prohost Word: Until the bearish on Sequenom convince us that they are not playing a game, and their concerns about Sequenom’s science, technology and products are real, we continue to believe that the future of medicine and agriculture is now in the hands of the genomic group. Sequenom is, indeed, a member of this group with advanced standing. The genomic firms’ technologies, tools and discoveries are the engines of the revolution in medicine and in the discovery and development of breakthrough drugs. (Read the article entitled Genomics in Prohost Newsletter for subscribers only.)

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INTERMUNE: Pulmonary Fibrosis Drug Will Open the Door to A large Product Pipeline

  Thursday, March 11, 2010
The FDA Pulmonary-Allergy Drugs Advisory Committee (PADAC) voted 9-3 to recommend approval of Esbiet® (pirfenidone) developed by the biotech firm Intermune (ITMN) for idiopathic pulmonary fibrosis (IPF). The same drug is approved in Japan for IPF and sold under the trade name Pirespa® by Shionogi in that country. Both Intermune and Shionogi had licensed pirfenidone from Marnac and its co-licensor, KDL GmbH.  More...

ISIS (ISIS): Lou Gehrigs Disease Antisense Drug Has Reached Clinical Trials

  Monday, March 08, 2010
Isis initiated a Phase 1 study of its antisense drug ISIS-SOD1Rx in patients with an inherited, aggressive form of Lou Gehrig\'s disease also known as familial amyotrophic lateral sclerosis. (ALS). As ISIS-SOD1Rx selectively inhibits the production of SOD1, it is expected to benefit the cases of familial ALS that are related to mutant forms of superoxide dismutase, or SOD1, which constitutes approximately 20% of ALS patients suffering from familial ALS.  More...

ON SEQUENOM (SQNM)

  Tuesday, March 02, 2010

On September 22, Prohost wrote:  More...

Time To Appreciate ISIS PHARMACEUTICALS (ISIS)

  Tuesday, March 02, 2010

OSI (OSIP): Congratulation Prohost Subscribers. A Take Over with over 40% Premium.

  Monday, March 01, 2010

OSI (OSIP): Congratulation Prohost Subscribers. A Take Over with over 40% Premium.  More...

CADENCE (CADX): The FDA Complete Response is good rather than bad news

  Tuesday, February 16, 2010

CADENCE PHARMACEUTICALS (CADX): The FDA decision to deny approval of Cadence’s drug Ofirmev™ (IV acetaminophen) was positive rather than negative news. The contents of the FDA Complete Response letter, rather insinuate that the product has passed the tests of safety and efficacy and the only problem are deficiencies the FDA observed in the manufacturing facility. The manufacturing deficiency will be taken care of by Cadence manufacturer and Cadence will request a meeting with the FDA to ensure that the deficiencies have been adequately addressed.  More...

XOMA: Past, Present and Future.

  Tuesday, February 09, 2010

The firm has encouraging news today. But recently the firm’s stock plummeted for reasons not related to the firm’s technological capabilities, but to a mixture of inherited consequences of bad financial decisions, past unethical behavior and, in some circumstances, bad luck. Investors’ agitation - well reflected in their exaggerated reactions towards some of the firm’s unfortunate news, has also contributed to the stock’s plummeting. The negative chain reaction began a few years ago when Xoma’s investigational drug for sepsis failed to pass the approval test even though it saved children’s lives in clinical trials. The company decided to abandon the drug years before investors learn the news that was never announced. A couple of years after the firm has shelved the drug, investors realized that the drug is not existing in longer in Xoma’s pipeline.  More...


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