Genocea Biosciences (NASDAQ:GNCA)

CAPS Rating: 1 out of 5

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Member Avatar Mercer32208 (< 20) Submitted: 4/29/2016 6:54:04 AM : Outperform Start Price: $4.61 GNCA Score: -14.91

The Atlas System reduces the cost for developing vacines and the GEN-003 has a significant value.

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Member Avatar pchop12316 (63.04) Submitted: 4/27/2016 12:02:31 PM : Underperform Start Price: $4.82 GNCA Score: +17.54

likely to lag the industry 7 the Market especially near term

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Member Avatar zzlangerhans (99.78) Submitted: 4/1/2016 10:00:19 AM : Underperform Start Price: $4.90 GNCA Score: +20.18

I figured Genocea was a pretty safe bet to fill the gap after spiking in the pre-market on twelve month data for their herpes vaccine GEN-003. The data wasn't particularly impressive compared to the one month data and six month data reported last year that hadn't stopped the share price from crashing and burning from highs of 16 last July to a low of 2.6 in February. The one month data was particularly questionable given that the placebo cohort showed a stat sig reduction of lesion rates just like the GEN-003 cohorts. The placebo group was conveniently dropped for subsequent analyses, but it seems clear that Genocea's analytical methods leave much to be desired. Meanwhile, development of pneumococcal vaccine GEN-004 was suspended after failure to meet endpoints in a phase II trial.

Reductions in viral shedding and reductions in genital lesions sound great, but are of dubious clinical significance. I'm not sure if any minimum amount of viral shedding has been established to allow HSV transmission, but it seems likely that almost complete abrogation of viral shedding would be required to be clinically relevant. In addition, it's not necessarily the numbers of lesions as much as the frequency of outbreaks that determines the efficacy of treatment. An outbreak with half as many lesions might not be quite as bad, but it's still an outbreak. Genocea's focus on these endpoints looks like handwaving. In order to demonstrate any degree of commercial viability, Genocea will have to demonstrate stat sig benefit vs placebo at the least, and vs Valtrex at best. With Valtrex cheap and generic, it's not likely insurances will pay for an expensive vaccine instead.

My guess that the gap back down below 4 would fill looked pretty good at first. I managed to get shares to short at 5.5 after placing my first order at 6, and then tripled down at 5 figuring the dump was well on its way. However, around 2 PM a sellside analyst at Cowen issued a buy rating with a price target of 40 and the stock took off, eventually peaking over 8 in the after hours. Of course, sellside ratings are meaningless and only exist to create banking business. Cowen has run offerings for Genocea before and no doubt they'd like to run the next one as well. However, since I'm already deep in the red I can't continue to increase my three thousand share short position until I'm sure we won't see a 13F from Tang or Baker Bros dropped in the premarket Friday morning.

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