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October 2010



Two new bottoms for the GBMB

October 19, 2010 – Comments (5) | RELATED TICKERS: PRTK , ALNY

Transcept Pharmaceuticals (TSPT) - market cap 87M, share price 6.45. Cash 79M, debt 1M, quarterly burn 2-4M. Transcept is the reincarnation of a failed biotech called Novacea who whiffed on prostate cancer drug Asentar. They wisely used accumulated cash to reverse merge with Transcept and their zolpidem reformulation Intermezzo, which they then submitted to the FDA as a treatment for the middle-of-the-night awakening variety of insomnia. In mid-2009 the share price steadily climbed from 5 to 15 on the strength of a licensing deal with Purdue and the impending PDUFA of Intermezzo, then collapsed in 10/09 with an FDA Complete Response letter. The FDA safety concerns were related to driving impairment the morning after Intermezzo usage. The company announced today that they completed the highway driving study with positive results and would submit the Intermezzo NDA in Q1 2011. This announcement has done nothing to reverse recent downward momentum in the stock. Close inspection of the driving study data does raise some concerns. While the primary analysis of the driving study (symmetry analysis) showed no significant effect four hours after Intermezzo use, there was a significant effect three hours after use. The secondary analysis (standard deviation of lateral position) used at both three and four hours showed statistically significant effects, although the magnitude was substantially lower than that seen with a 0.05% blood alcohol level. Therefore there is potential for an extremely safety-conscious FDA to deliver another CRL based on these results. However, once the Intermezzo NDA is resubmitted in Q1 2011, I expect these potential safety concerns to be submerged in the pro-approval hype. A resurgence back to the low teens is not unlikely. Continuing downward momentum in the share price leads me to set a threshold of 6 for a GBMB buy.  [more]



GBMB update

October 18, 2010 – Comments (21) | RELATED TICKERS: MYGN , WINT , BDSI

The GBMB portfolio has done well over the last six weeks along with the broad market, and as my balance has shifted well into the black my self-confidence has been growing. This in turn has led to some more acquisitions in old favorites.  [more]



Two bottoms and a put

October 04, 2010 – Comments (11) | RELATED TICKERS: SNSS , VICL , AVEO

Two stocks to watch for the GBMB portfolio:  [more]

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