Cardiome Pharma Corp (NASDAQ:CRME)

CAPS Rating: 1 out of 5

Life sciences company focused on developing proprietary drugs to treat or prevent cardiovascular diseases. Current efforts are focused on the treatment of atrial arrhythmias and congestive heart failure.

Recs

7
Player Avatar zzlangerhans (99.85) Submitted: 3/26/2011 4:11:38 PM : Outperform Start Price: $21.90 CRME Score: -90.27

My last outperform on Cardiome ended tragically with a fat finger ending of the pick and a negative score, which was naturally followed days later with a sharp upswing in the share price. Hopefully I'll fare better this time around.

In the winter Cardiome looked like they would recover from the beating they took after the FDA hold on the ACT 5 phase III trial of IV vernakalant. The share price rose from about 4.6 to as high as 7, but then over the past seven weeks has declined to new lows despite an absence of negative catalysts.

Cardiome plays their cards close to their chests to a frustrating degree, but I believe upcoming catalysts are more likely to be positive than negative. The hold on IV vernakalant is based on a single adverse event which did not prompt the DSMB to suspend the trial. IV vernakalant is already approved in Europe and it seems unlikely that development will be terminated in the US over safety issues. Furthermore, the company will begin reporting revenues from IV vernakalant in Europe over the next couple of quarters.

The most important long-term concern may be development of oral vernakalant, which has been inexplicably in limbo since the compound was partnered with Merck two years ago. The company recently released a typically inscrutable statement in which they confide that they have been advised by Merck of the next steps to occur in development of oral vernakalant. What exactly those steps are will apparently remain between Cardiome and Merck.

I sold out of my large bet on Cardiome about a year ago, for a sizable profit but well below highs. I've lost a lot of confidence in management as they appear to have severely bungled the development of both IV and oral vernakalant, and they don't seem to have much feeling for their shareholders. I'm willing to take a chance in CAPS here but I'm very hesitant to risk real money in such an opaque, unpredictable outfit.

Report this Post 2 Replies
Member Avatar ResearchLover (22.08) Submitted: 3/19/2012 3:49:42 PM
Recs: 0

So, is the 60% drop today amenable to a speculative buy-on-the-dip strategy?

Member Avatar zzlangerhans (99.85) Submitted: 3/30/2012 11:49:17 AM
Recs: 0

Wouldn't go near it.

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