Investors Helping Investors Beat the Market
BATS data provided in real-time. NYSE, NASDAQ and AMEX data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates and Analyst Ratings provided by Zacks.
SEC Filings and Insider Transactions provided by Edgar Online.
Powered and implemented by Interactive Data Managed Solutions. Terms & Conditions
RSS Headlines
Fool UK
Recs
What we have here is a very big pile of stupid! Thats a technical term and feel free to quote me on that! We have a whole bunch of people with bad ideas getting together with a whole bunch of people with no ideas and bringing before you what you see today, a company over 800% off of its lows and trading at some of the most absurd values I've seen for a biotech stock on absolutely no fundamental merit.
Not even the tooth fairy could deliver such wild fantasies as we've seen over the past 6 weeks. OGXI is now trading at over 17 times price to book and since they didnt earn a DIME in revenue last year, well an infinite amount to revenue... I've been doing this for over a decade and I don't think I've ever seen a biotech company trade at an infinite amount to revenues. Assuming they ARE able to meet this years revenue targets that will "plummett" and I use that word VERY liberally their price to sales figure down to about 40!
They only have 9.4M dollars in cash remaining and they are burning roughly $925,000 per month. Can we say impending secondary because I sure as hell can! I wouldn't be shocked to see their outstanding shares increase by 50% within the next week. I also wouldn't be surprised to see a secondary offered at 15-20% below current market values.
So we had Phase II drug data out and it looked promising. I think I've heard that now 300 and yada yada times in my life to see Phase III trials turn out negative. RARELY has a Phase II run up like this ever held in the biotech space. I can count on one hand out of 300-400 times where this has happened and held.
The ASCO conference is over, the real earnings of this company (or lack thereof) are in the forefront, and Phase III trials are still months off. OGXI has to deal with raising cash and minimizing the losing of that cash if it hopes to even remain a viable company. Until then, short, short away! The only danger here is with only 5.5M shares outstanding, a short squeeze is possible though highly improbable at these inflated levels.
And of course, my favorite extremely short-term indicator, RSI is back at nearly 80, another sure sign to short away!
My assault on biotechs continues....
UltraLong
thanks for the post..
I read your review of Sonus Pharmaceuticals about a year ago and bought in when it was about $4.80/share then the Phase II clinical trials had a poor outcome and stock plummeted to about $.10/share. Lo and behold, Sonus was purchased by Oncogenix and here we are today and "thinking" of possibly selling based on your report today. Thanks for all the great information!
Hmmmm sounds interesting enough for me to start digging around. Your stats are impressive..thank you
Not sure how you could have invested in biotech stocks that long and not found a company with 0 revenue? These companies that develop drugs need to get approval by FDA (in US) before they are allowed to market them. Let me know if you need me to point out a few examples. How about Cougar which also has a drug being developed in prostate cancer although unlike OGXI they have not released controlled data in that indication and they certainly have not shown the survival advantage that OGXI has demonstrated. You may be able to count on one finger the number of times a biotech has shown significant overall survival in a controlled PhII study if you include OGXI-- and that is the difference. By the way, Cougar received a recent buy out offer for nearly 1 Billion dollars which is 8x OGXI valuation.
Point is I would value this company more based on market cap and technology potential, than on recent share performance. The dramatic change in share price can be explained by the fact that the strength of this data surprised everyone.
Hard to argue with your own performance but I'm betting the farm against it. GL (I don't mean that!)
"Point is I would value this company more based on market cap..." - number90
A fascinating glimpse into the mind of a biotech "investor".
Call it what you want "investing" "position trading" "buy and hold" whatever, I'm normally an active trader but when I see a $100 stock trading below $25 I buy it... that valuation is not based on book value, present revenue, what the share performance was last quarter. That valuation is based on what a potential megablockbuster is worth at this stage of clinical development. Very well designed Ph2 study was really a mini-Ph3, since it demonstrated significant survival in a well controlled setting with the right comparator arm; risks in Ph3 are greatly diminished. That data is what a potential purchasing company will be paying for and based on comparators it would easily be over 500M but likely much higher than that.
Company said this week that Ph3 trial will include first-line patients (major market); both trials will accrue patients in 80 centers (they should accrue fast as 2 trials won't compete for patients), and that based on negotiations with potential partnerS they wont need to access shelf to pay for ph3 trials. I see the short interest climbing in this stock and the hoards of negative recommendations on MF, I would also agree that a stock can not only go in one direction, but this is just a breather IMO this stock needs to climb some more.
Alright, sorry for the scary glimpse into my mind, but this is my industry and there's alot churning around in there about this stock
You understand what market cap means, right? It is the total value that shares of the company are trading for right now. "I would value this company based on market cap" is circular nonsense. Your other points are fine although not particularly persuasive. I don't mess around with buying unprofitable development companies. Some people are good at it (and have to put a lot of work into it) but most aren't.
Yes thanks I understand market cap. Sorry if you feel I miss spoke. Said another way, when the stock market is currently valuing a company (market cap) far below what I believe to be the true value of the company (or future potential market cap), that can be a motivation to buy a stock. When J&J just bought a company with weaker technology for 8Xs current value of OGXI, that's a market cap consideration... and IMO convincing motivation.
Do you still feel like this stock is still "a big pile of stupid" after this week when a report came out that AN analyst predicted that the company will soon find a partner for its cancer drug? I know I sure do, however, my Oct put option has gone to the dumpster after this run-up. One analyst giving this company a glimmer of hope does not warrant a three-day sky-rocket of the stock, the company still is running out of cash fast with very little income to support operations. Not to mention the proposterous gains the stock has experience since march. What do you think the stock will do in the next month and a half?
Thanks for your time,
TheLastYetti
As soon as the FDA sees the data from this gimmick, you'll see it lose 75% of its value overnight. This is merely short covering.
UltraLong
This is my first post but I've been lurking for a while.
OGXI took its first major tumble in quite some time this past week on mixed news. I've had this stock for quite a while and am still up but am on the fence about what to do with it now. I strive to be a long term investor but I reserve a small portion of my portfolio for high risk ventures that I more actively trade. I know the TEVA deal wasn't what most speculators were expecting but I have a fair respect for TEVA and the deal itself doesn't spook me.
My question. Should the fact that Teva is taking it on and was willing to buy the first big chunk of stock at $37+ per share give us any more confidence in the long term prospects for OGXI?