TESARO (NASDAQ:TSRO)

CAPS Rating: 2 out of 5

Recs

2
Player Avatar zzlangerhans (99.73) Submitted: 9/18/2013 5:48:17 PM : Underperform Start Price: $42.69 TSRO Score: +10.57

I've scored on red thumbs on Tesaro twice over 40, so why not try it again? The question with Tesaro is whether the bulk of the 1.3B valuation is being awarded for NK-1 anti-emetic rolapitant or for PARP inhibitor niraparib. If it's rolapitant, I feel a lot more comofrtable with the pick since I don't think the drug is sufficiently differentiated from other NK-1's on the market (one of which will go generic in 2015) to command a signifcant premium. The fact that both Schering-Plough and then Opko were happy to part with the drug for modest cash is also an indication that the commercial future isn't too bright.

I see niraparib as a little more of a wild card given the general market enthusiasm for PARP inhibitors, but given that phase III trials are just kicking off I see a lot more cash burn coming before any late stage data is generated from the program.

Member Avatar zzlangerhans (99.73) Submitted: 9/19/2013 5:13:57 PM
Recs: 1

Shorted 100 shares at 46 today, not convinced the stock should be up 8% because of a Seeking Alpha article.

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