First 2011 GBMB update
May 02, 2011
– Comments (6) |
RELATED TICKERS: REGN
, VICL
, PYMXD
The last couple of months have been very favorable for the GBMB, especially now that I have isolated the major weakness of the strategy – early selling. My first victory from correcting the strategy is Vical, where I resisted my usual inclination to sell for a $2000 profit and held out for $8700 a couple of months later. Of course, I might lose out on another $10000 but I won't cry over this one. I gave up on Myrexis with a small profit, but my cash/market cap imbalance was narrowing and the pipeline remained unimpressive. Alnylam I dumped wisely on an irrational burst on a weak quarterly PR and then bought again at a lower price. Earnings will come out again after the close today. And I put money down on a weird little OB company called PolyMedix whose price dropped way below my buy threshold on an oddly-timed dilutive financing. Their pipeline looks solid for a 50M cap but I've been fooled before (in CAPS only) by companies like Aryx and Altus. Time will tell.
Current holdings (as of close 4/29/11):
BDSI 5000 shares bought at 3.95, current price 3.69
DSCO 6667 shares bought at DCA of 4.31, current price 1.97
RTIX 3000 shares bought at 2.95, current price 2.90
IDRA 6000 shares bought at DCA of 3.15, current price 2.6
ANDS 10000 shares bought at DCA of 1.4, current price 1.22
ALIM 2000 shares bought at 9, current price 8.9
SVNT 2000 shares bought at 9.85, current price 11.62
ALNY 2000 shares bought at 9.5, current price 10.26
BCRX 3000 shares bought at 3.4, current price 3.89
PYMX.OB 10000 shares bought at 0.66, current price 0.66
Recent sales:
MYRX 3000 shares bought at 3.85, sold at 4.3
ALNY 1000 shares bought at 10, sold at 11.28
VICL 5000 shares bought at 1.9, sold at 3.64
BIOD 5000 shares bought at 1.75, sold at 2
Status:
Total value of current GBMB holdings = $147914
Unrealized losses = $15821
Realized gains = $49572
Profit =$33751
I'm going to add just one new GBMB player:
Regeneron Pharmaceuticals (REGN) - market cap 4590M, share price 51.04. Cash 627M, debt 160M, burn 15-35M. I recently pitched this stock and a detailed analysis can be found on the company's page. In the two days after I pitched it, the stock rose 30% on a surprising positive result from the VELOUR cancer trial, then plunged back to the original level a day later. What prompted the reversal in fortune was scientific confirmation of the virtual equivalence of Avastin to Lucentis in treating wet macular degeneration. This has negative implications for Regeneron's lead compound VEGF Trap, which has a PDUFA of August 20 to treat that same condition. Lucentis is a much more expensive, and thus vulnerable, competitor than Avastin. Regeneron has a lot of moving parts and therefore an appropriate valuation is difficult to calculate. There are potential therapies for other ocular conditions, gout, and now cancer in late stage clinical development. Therefore I can't claim with certainty that Regeneron is undervalued. However, I do know that once the current concern resolves itself and the smoke clears, the share price will likely resume the upward trend it was previously enjoying towards the August PDUFA, which is about 70% likely to be favorable. A BLA for rilonacept for gout may also be submitted as early as mid-year providing further buoyancy to the stock. Portefeuille already took my football and is running with it, but I'd want to see the share price settle further before risking my hard-won cash. This is the GBMB after all. Potential buy under 45, but thresholds may be changed without notice in the face of high volatility.
RSS Headlines
Fool UK