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Player Avatar zzlangerhans (99.85) Submitted: 11/26/2013 12:24:34 PM : Underperform Start Price: $4.40 ARIA Score: -45.71

Ariad has exploded off the recent lows around 2.4, and kudos to those who fished it close to the bottom and enjoyed 100%+ gains. I made a little bit back but still sustained a stiff loss in the zzporte portfolio, as documented in Twitter. Not to worry - if you aren't taking hits like this, then you aren't seeing any big winners either. Portefeuille and I have seen our collaboration roar back to life in November after returning much of our gains in a problematic October. Time to clean out losers like Aveo and Ariad and move on.

Will I end up seeing Ariad return to a level that would have made zzporte whole had we not liquidated the position? Anything is possible in biotech, but obviously I doubt that outcome. The bulls have been gassed up on word from the EMA that Iclusig will be allowed to stay on the market there with some additional restrictions. They are also looking for a revised opinion from the FDA allowing Iclusig to once again be marketed here in the US.

Here's my answer to the bulls. Despite a lowly share price, an inflated share count means that Ariad sports a cap of 923M as I type. That's far from chicken feed, and the net hard asset balance is 218M. Meanwhile the company is burning upwards of 60M per quarter, a number that is unlikely to go down as expenditures related to Iclusig will need to go up in order to return the drug to the US market and promote it in both the US and Europe. Even prior to the EPIC disaster, US Iclusig revenues were underwhelming at 17M in the third full quarter on the market. Iclusig may have a favorable opinion from the EMA, but Ariad must now tangle with individual regulatory bodies in each European country prior to achieving pricing and reimbusement agreements. Expensive and time-consuming. And of course, the EMA could change their opinion about Iclusig at any time. With fatal thrombotic events occurring on a regular basis, Iclusig is a ticking time bomb.

Ultimately the critical questions with Iclusig is how indispensable the drug really is to a subgroup of Gleevec-resistant CML patients, and if that subgroup is large enough to make the drug cash-flow positive. I doubt the momo traders driving the recent bubbly bounce in Ariad have the answers to those questions.

Member Avatar BlindSkuirrel (33.61) Submitted: 2/19/2014 11:30:16 AM
Recs: 0

This stock is completely manipulated. Check out what it's doing today - totally manipulated pattern.

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