I have no position in any of the stocks mentioned but may initiate a position in Sarepta (SRPT) in the next 72 hours.
I wish I could help you to understand what it is I’m experiencing. Or, perhaps, that would be to burden you unnecessarily. Who wants to be the one to awaken someone from their slumber? To intrude upon their self-imposed sleep.
I’ve failed miserably as an analyst. But I was meant to fail. For it is through the exertion of our futile efforts that we at last abandon all sense of self direction. Amidst the cacophony of greed that is the biotechnology sector of the stock market one’s voice cannot possibly be heard. If there’s one thing that trumps Love it is agenda. It appears that the carefully laid plans of men are no match for the consciousness of Christ Jesus. But appearances are, as they say, deceiving.
After recoiling in disgust from the hedge fund dominated platform of Seeking Alpha, I sought refuge in the salt mines of the Yahoo Message boards. The very same venue that had caused me so much pain in the past. The pain of betrayal. The pain of realizing the weakness of men. Only my naiveté could possibly lead me back to such misery. But I retraced these steps of innocence time and time again. I had to. If only to learn that the same vested interests control the flow of communication there too. It seems that the vested agents of finance are everywhere to be found.
It would be nothing more than folly to recite what it is that I said on the Sarepta (SRPT) message board. But a wounded ego and loss of memory where the log in my own eye is lodged compels me to do so.
My Original Thesis
On Seeking Alpha I told you that Biomarin’s Kydrisa, or drisapersen, would be rejected at adcom. This formed the basis of my investment thesis. Namely, that one of these two drugs – eteplirsen or drisapersen would have to be approved. And since drisapersen was not, eteplirsen would be. Parenthetically it’s worth noting that the much reviled Ronald Farkas chaired the drisapersen adcom just as he did the eteplirsen debacle but with no complaints from the YMB crowd.
I stopped authoring content on Seeking Alpha following the publication of that article. Amidst the ripples of negativity infusing that bureaucratic fiasco, I changed my investment thesis to: the FDA would have to approve the eteplirsen application due to the enormous political pressures exerted by DMD professionals; U.S. Congressmen (most notably Senator Marco Rubio of Florida); patient advocates (especially their parents); and because the performance of FDA representatives at adcom was so deplorable as to dissuade opening the door to public censure. Board participants clung to the scientific precepts contained in the company NDA documentation.
Although I repeatedly wrote of “disappointment” attending to Accelerated Approval which arrived in the most decelerated of fashions, I did so with the unpopular caveat that the FDA would include something in the wording of approval to discourage a rampant rise in the stock price. This cautionary proviso of a poison pill, if you will, brought upon me the universal disdain of board participants who sought to marginalize my effect on the platform viewership. Sadly, it worked. Several contributors to the conversation asserted that formal approval wasn’t typically accompanied by agency appraisals on the application but was, rather, a straightforward yes or no.
What I Stated
I repeated the following points based upon my Thaumaturgical analysis.
- Approval would be disappointing to those with high expectations.
- The share price upon approval would be between $45 and $60.
- There would be something discouraging in the FDA official press release.
The application was approved. In that press release, the FDA unexpectedly required a confirmatory study in exon-51 that was not named (PROMOVI) or (ESSENCE). It was these latter two trials that board participants focused upon. The former, was believed to be sufficient by some as it was already designated conformational, and the latter, was thought to be the outgrowth of a cooperative effort between the agency and the applicant. Neither proved to be true. And it was this added burden assigned that kept the stock price from a sharp ascension that many believed to be inevitable.
If that wasn’t bad enough, the agency also formally requested that the study which had formed the bedrock of justification for scientific consideration of approval be invalidated. For the most part, this latest jab at the company’s integrity has been ignored by the investment community.
On the conscious plane of thought, I’m writing this to alert you to an opportunity. I’ve already made a good deal of money on this equity, albeit, while diminishing my holdings so as to reduce my risk exposure. That said, I’ll be looking to reinitiate a position in light of my new findings. Yes, the company is now at a hefty $3bn market capitalization. But the recent equity raise participants, in at just below $60 per share, are due a boost up for their display of loyalty. And I believe they’ll get it. The source of this catalyst, or these catalysts, could come from the following quarters.
- A positive readout from the Phase-1 flu study.
- A European approval or talk of interest from the EU.
- An ex-U.S. marketing partnership. Yes, they’ve played this down but that’s a sure sign of interest in consummation.
- A sale of the Priority Review Voucher, or PRV. This was granted shortly after approval was given. A PRV voucher is a highly prized asset that grants a reduced time frame of consideration relative to a commercial application. Many are bought by big pharma companies not to take advantage of their intrinsic worth but to keep them from falling into the hands of companies with competing products to their own marketed drugs.
- And finally, a big pharma buyout. Yes, every desperate retail investor dreams of an acquisition that will double or triple their stake in an equity despite the fact that most of these occur at a modest premium to the previous days closing price (Allegan’s recent purchase of Tobira (TBRA) being a notable exception). But in the case of Sarepta, the likelihood is greater if only because their product, Exondy51, will bring in an immediate flow of uncontested cash revenue. That PRV voucher becomes an added bonus.
I honestly believe that Sarepta will release stock tickling news this very morning. It’s only fitting given the fact that I cashed out for a sizeable gain while other loyalist hung in there in my absence. If that proves not to be the case, I’ll reinitiate a large position at the earliest opportunity. Hopefully, fear of an assault on the outrageous price of therapeutics in the U.S. by our two presidential debate participants will cause the sector to stumble today and Sarepta right along with it.
Staking out a position in the equity at this point in time is an easy call for me.
Always be well…
Additional disclosure: Any information or opinion expressed herein may not be true, accurate or correct and it does not constitute any suggestion to buy, sell, hold or adopt any investment strategy for this stock or any stock that may be mentioned. Reliance upon information in this article is at the sole discretion of the reader. The sole purpose of my article is to entertain by providing information, the accuracy of which is as good as the public sources it was derived from. Do not act on anything I have written. Rather, do your own due diligence and consult an investment professional before making any investment decision. Acting on what any one writer, including me has imparted to you is foolish at best. I have no better access to resources or gift of opinion formulation than you do. I sometimes make mistakes. There are a myriad of things, which can happen in lieu of any forward-looking statement I have made. Any stock featured or mentioned in an article I compose is subject to all manner of influences, which can change its value in dramatic fashion upwards or downwards. These events can be of a wide variety not limited to news-related occurrences, managerial decisions, trial failures, stock manipulations and so on. I make every effort to declare positions I have in stocks I cover or mention in an article but reserve the right to move in and out of said investments at my own discretion based upon the wisdom of doing so. I implore you to do your own due diligence, invest at your own considerable risk attaining the just reward your efforts have wrought.