Idenix Pharmaceuticals, Inc. (IDIX)

spec

zzlangerhans rec

On November 20, 2009 at 12:21 PM, zzlangerhans (99.50) wrote:

I'd like to submit Idenix Pharmaceuticals (IDIX) and possibly become the first submitter to be carrying an underperform pick on the same stock in his own profile. The stock is down 26% from my red thumb nearly two years ago but the S&P is also down 22% and I don't want to close such a longstanding pick without a positive score.

Here's my outperform pitch: After flying almost to 10 in halcyon days before the sun melted their wings, Idenix now trades at an all-time low of 1.84. Novartis declined to license the hepatitis C drug IDX184 despite reasonable proof-of-concept data and the company has now initiated a phase II trial without a partner. The stock's continued decline after the Novartis rejection reminds me of a jilted lover, spending a few months in depression before waking up one day and realizing there are other fish in the sea. The Glaxo deal for the anti-retroviral IDX899 may have also disappointed investors, but Glaxo's assumption of fiscal responsibility for development will help control the burn. The company has 60M in cash which will carry them through another year at least, giving them all the time in the world to pull another rabbit out of their hat.

IDIX has a too high valuation compared to its sales potential. It is also loss making.

Mmm...pharmaceuticals...

Biotech = hot.

Oversold (but then again, what isn't?!)

CSOakes @2.51

After the recent restructuring, it is now clear where this company stands. One HIV drug in phase I with no current plan for a phase II trial. One or two HCV drugs in preclinical development, with a history of one massive faceplant in HCV. Also a history of a very high burn rate which will obviously be reduced, but likely not as much as the company claims. 140M is simply too high of a market cap for this pipeline, and 70M would probably be more appropriate. As the company continues to bleed cash without significant progress through clinical trials in 2008, it will become clear that a dilutional financing is imminent.

Oversold with powerful sponsor. Will rebound for at least a 50% gain.

worth a buy for a short term correction below $4 after the crash

The company is sitting on a good amount of cash and has a major backer in the form of Novartis (NVS -- owns over 50% of IDIX's shares). Idenix currently sells a Hepatitis B drug and has a Hep C drug in Phase II trials. They are also working on an HIV drug that is in the extreme early phases of development. The Hep C drug will be used in combination with other drugs, but experienced a setback last year because of GI problems in some patients.

Honestly, I'm not a big biotech/pharma investor, but I like the idea behind this company's products and the potential for both the current Hep B drug and the possible Hep C drug. I generally avoid this realm because I don't have the background to understand the chemistry behind the drugs, but I figured this was an interesting situation to monitor through CAPS. Right now, the market is valuing this company as if it had very little chance at a future. NVS' support and the Hep B drug currently on market seem to mitigate against this pessimism.

What company is this ? Well...it's a small biotec company, Novartis owns more than 10% of it and isnt selling any shares. Novartis bought more than 4 million shares of IDIX at a price over 20 dollars per share. What's the price today ? About 7 dollars. Unfortunally relating to biotec knowledge I'm not Charly Travers and I honestly know nearly nothing about evaluating the inside value biotechnology companies, BUT, I guess the guys from Novartis know a lot and if they bough so many shares at 20 dollars per share I suppose this company is worth 20 dollars per share for somebody, so I might happily throw a couple thousand dollars to buy shares at todays price.

Also, about a year ago SOMMADOSSI JEAN-PIERRE, an Officer, bought 10.000 shares at 9 dollars per share. Ok, 10.000 isnt that many, but the guy might not be swimming in money either.

More info, Market Cap is about 400M and the company is 120M in cash ready to burn.

Price to book value is below 3... at this price I would even buy a big company like Intel, and Enterprise Value/Revenue is a confortable 4, while Microsoft is slighly over 5. If this company was profitable I wouldnt hesitate to call it a value play, this way....I'll just guess that it's a value play :)) The signs are there

Outperform dude! Here be no dragons (hope so).

Sales of Sebivo in Europe should add to the income and improve its margins.

Maker of Hepatitis B drug, Tyzeka, that is just starting sales. Also in testing for a Hepatitis C drug that looks to be used in conjunction with others to form a "cocktail" that is extremely effective. Good management and a great product. I like the growth potential when/if the Hep C drug goes through, and I also like that they are doing something to combat that disease. Call it a combination head and heart play.

Discovery of new drugs and treatments? Don't see any in the pipeline at this time. Maybe in the future.

fda approvals of several drugs in pipeline will lead to more partnerships and possible buy-out

bottom feeding

A really strong drug that can be used with other drugs to cure hepatitis B & C. (studies show that it takes at least 2 drigs and IDIX has one of the two most promising)