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January 2011

Recs

20

Two more bottoms for the GBMB

January 22, 2011 – Comments (19) | RELATED TICKERS: ALIM , SVNTQ

Alimera (ALIM) – market cap 281M, share price 9. Cash 55M, debt 0, burn 6-8M/quarter. The stock wasn’t hit too badly on news of a CRL for Iluvien in diabetic macular edema last December 27, but the selling seems to have ramped up this past week. Given that the CRL seemed fairly benign, citing only some manufacturing deficiencies and the absence of three year data from the phase III FAME study, continued downward movement seems unjustified. Final three year data was collected last October, too late for the NDA submission, but perfectly timed for a quick resubmission. Once this data is fully analyzed and the manufacturing issues have been addressed, there’s an upside of 15 or higher should the drug be approved in late 2011 or early 2012. While the FDA always has the prerogative to raise new safety or efficacy concerns on a resubmission, the lack of a request for new clinical trials bodes very well for the next PDUFA. The all-time low for the stock of 6.6 came during this past summer of European discontent, and will almost certainly not be revisited prior to PDUFA #2. A couple of notes of concern: Iluvien licensee pSivida has seen a similar share price drop over the last week, indicating that the decline may be due to more than just short-term chaos. Short interest remains high at 16%, although I am unsure if this accounts for those who covered after the CRL. I bought 2000 shares for the GBMB account at 9, but I still advise caution until downward momentum has clearly ceased.  [more]

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