Friday, January 1, 2016

2016 U.S. Presidential Process is Creating Several Excellent Trading Setups...



Public Policy Uncertainties regarding



Energy

Environment

Healthcare




Republican Debates
  1. January 14, 2016
  2. January 28, 2016
  3. February 6, 2016
  4. February 13, 2016
  5. February 26, 2016
  6. March 10, 2016
Democratic Debates
  1. January 17, 2016
  2. February 11, 2016
  3. March 9, 2016
General Election Debates
  1. September 26, 2016
  2. October 4, 2016 (Vice President)
  3. October 9, 2016
  4. October 19, 2016


Republican frontrunners Ted Cruz and Donald Trump




Democrat frontrunners Bernie Sanders and Hillary Clinton  



Thursday, December 24, 2015

Chipotle's (CMG) E. coli Outbreaks are Causing Long-Term Damage to their Brand/Reputation and We Predict > 70% of WS Analysts will be Forced to Downgrades Sales & EPS Forecasts through at Least 2017


Frustratingly, there is no good precedent for Chipotle’s food safety issues,” wrote RBC Capital Market analyst David Palmer. But citing Taco Bell’s past troubles, he forecast a year of sales declines for Chipotle.

Barclays analyst Jeffrey Bernstein has noted Chipotle’s recovery may take longer than other chains that have been hurt by foodborne illnesses, because social media has increased people’s awareness of such incidents.

He also noted that Chipotle’s “Food With Integrity” slogan makes the E. coli (fecal contamination) cases 
all the more damaging.

We clipped this piece from an article written by Candice Choi from The Associated Press.


We believe the fallout for Investors is far from Over 




Thanks for Reading, 
POTC~

Merry Christmas 2015 and a Healthy 2016 to All Our Loyal Partners and Readers since 2008 !




Tuesday, December 22, 2015

Gross Domestic Product (GDP) is the Broadest Measure of Business Activity, It Includes every Sector in the U.S. Economy

Released on 12/22/2015 @ 8:30am ET for Q3, 2015
PriorConsensusConsensus Range
Real GDP - Q/Q change 2.1%2.0%1.7% - 2.2%
GDP Price Index - Q/Q change 1.3%1.3%1.3% - 1.3%
Recent History of the GDP Indicator
Econoday consensus is calling for a 0.1% drop in the 3rd estimate for Q3, illustrated above. Apart from Inventories, where changes are often difficult to interpret, Demand indications in the 2nd estimate were positive with final Sales up 2.7%.



  • Real GDP rates are quoted Quarterly or Annually and measure how much the economy has Grown or Contracted over a period in time. Quarterly GDP rates are often volatile so many economists place greater emphasis on Year over Year changes since this data set paints a more stable picture.
Data Source: Haver Analytics

Thank You,
POTC~


Wednesday, December 9, 2015

"Psychology of the Call" : Ophthotech (OPHT) has caused 2 Giants to Curtsy, Fovista is the next Franchise Maker~

"Psychology of the Call" : Ophthotech (OPHT) has caused 2 Giants to Curtsy, Fovista is the next Franchise Maker~

Ophthotech (OPHT) has caused 2 Giants to Curtsy, Fovista is the next Franchise Maker~

On May 19, 2014, OPHT entered into the largest deal in the history of biotech with Novartis. The total deal is worth $1B with upfront payments, $330M already realized, in addition to milestones ahead. 

The most impressive nugget is not the $1B Headline number but the potential for Billions in yearly Sales and Income if the Phase III results/data proves:

  • Fovista has the power to Reverse some blood vessel damage wet AMD (Age-related Macular Degeneration) is responsible for, thus great hope for Preventing or Delaying patients from going blind. Imagine being on the brink of blindness but being able to avoid the horror because of the novel properties of Fovista. 
  
From OPHT's 10-K, dated March 14, 2014, click here for entire page
We further believe that the administration of Fovista in combination with anti-VEGF drugs in patients with wet AMD may cause regression of neovascularization and may inhibit subretinal fibrosis more effectively than anti-VEGF monotherapy. We believe that Fovista may provide meaningful added benefit in the treatment of wet AMD regardless of which anti-VEGF drug is administered in combination with Fovista.



CEO David Guyer's confidence in the life changing potential of Fovista is clear during every presentation. Click here to analyze Guyer's most recent live appearance:
Oppenheimer conference on Tuesday, December 8, 8:35am ET.

REGN has not joined forces with the 2 Giants, Novartis and Genentech but this could change or else REGN risks that OPHT chooses Genentech's Lucentis and the fallout on Sales of Eylea could have disastrous consequences. We'll be paying close attention to every Investor Day and earnings call REGN is involved in from this day forward.  

After sending a bullish take on REGN in the $45.00 range in 2011, before Eylea was approved, we feel that OPHT is in a similar situation but isn't getting enough respect perhaps because Fovista's Phase III top-line data won't be released until Q4, 2016. 

We're assigning a 67% probability that this drug is truly Special and will graduate to blockbuster $1B Sales status within 1-year. Guyer has become more aggressive of late trying to explain why and how Fovista is on the doorstep of changing lives of patients and shareholders. Please play back the Oppenheimer conference with link provided above and you'll make a sounder Investment or Trade thesis. Our most profitable trades were the direct result of spending Time & Effort researching, but especially listening to the Psychology of the Call(s). 

Eyelea and Lucentis will have combined Sales of about $5B in 2016. Fovista just has to show the same Phase II 62% improvement in reading acuity in Phase III and we estimate that $500M in U.S. Sales will be easy within 5-Quarters post approval. And with the likes of Novartis and Genentech ex-U.S. Sales should ramp quickly right out of the gate.   

But if Fovista proves that it's capable of turning back the clock on a certain percentage of damaged blood vessels and stop subretinal fibrosis more effectively than the mono therapies Eylea and Lucentis then OPHT will have a tremendous opportunity to Sprout a Ophthamology Franchise from a single molecule. 

Guyer would be vindicated and would be able to highlight the ineffectiveness of Wall Street analysts like Terence Flynn with Goldman Sachs who issued a Sell rating and $45.00 price target on August 7, 2015.



We remain suspicious of Terence Flynn's motivations behind his Sell rating, here's a link that explains.

If at the end of 2016 we witness that paradigm shift data then OPHT should fast become the only biotech that is marketing a wet AMD drug with ability to Prevent people from going blind. 

OPHT's current $2.4B market cap would Gap to new highs which few Investors are positioned for even with a small percentage of their aggressive portfolios.

REGN's market cap is 60X larger than OPHT's as of today. Though attaining REGN's size is unlikely no matter what the top-line data shows in 2016, we dearly wanted our loyal readers to understand that there is a Special nugget to look for when that day of reckoning finally comes.

We believe OPHT could carry a $4B market cap in 2016 ahead of what will be super exciting and very positive Phase III results.


1-year chart has been very bullish in 9 out of the last 12-months
 


Happy Christmas and Happy Hanukkah to One & All !
POTC

The IPO was impressive when you review; some extra credit information. If you had to guess after reading the piece above, was Goldman part of the syndicate team with OPHT? Answer will be found below.

The New York-based ophthalmics company, founded by former Eyetech Pharmaceuticals executives David Guyer and Samir Patel, priced its IPO late Tuesday, and sold 7.6 million shares at $22 apiece. Those figures mean Ophthotech ended up raising a whopping $167.2 million from the offering—a number that could jump even higher if its underwriters add the 1.14 million additional shares they have the option to buy at the IPO price over the next 30 days.
Ophthotech’s haul is more than double the $85 million the company initially sought to raise from public investors when it first outlined its IPO in August. Further, Ophthotech upsized the offering and boosted its projected range twice. On Sept. 9, it contemplated selling 5.72 million shares at $16 to $19 apiece. Then, early Tuesday, it amended its IPO prospectus again, estimating that it would sell 7.6 million shares at $19 to $20 apiece. It’ll begin trading on Wednesday on the Nasdaq under the symbol “OPHT” with a market capitalization already exceeding $600 million.
Novo A/S (28.65 percent) was Ophthotech’s largest stockholder prior to the IPO, followed by SV Life Sciences (26.80 percent), HBM Healthcare Investments (15.21 percent), and Clarus Ventures (13.57 percent).
Morgan Stanley, J.P. Morgan Securities, Leerink Swann, and Stifel, Nicolaus & Co. are the company’s underwriters.
Why all the interest? Investors are clearly intrigued by Ophthotech’s approach to treating the wet form of age related macular degeneration, a condition in which abnormal blood vessels grow in the macula—a part of the retina—and leak behind the eye, leading to distorted vision and potential blindness.
The market for wet AMD has evolved from laser therapies to a group of drugs injected into the eye that work by blocking the vascular endothelial growth factor (VEGF) that researchers believe causes the condition to worsen. Roche/Genentech’s cancer drug bevacizumab (Avastin) is often prescribed off-label for wet AMD, but the other anti-VEGFs—ranibizumab (Lucentis, also from Roche/Genentech) and aflibercept (Eylea, from Regeneron) have also emerged as big successes.
Ophthotech is trying to tweak the wet AMD treatment paradigm. While anti-VEGFs only stop abnormal blood vessels from continuing to grow, Ophthotech has created a drug that targets a different protein, platelet-derived growth factor (PDGF), which scientists believe may cause those blood vessels to recede when added to the regimen. Ophthotech’s plan, then, is to have patients get separate injections of both its anti-PDGF (a drug it hopes to market as Fovista if approved by regulators), and an anti-VEGF, during each visit. Though Ophthotech isn’t the only company trying this type of approach—Waltham, MA-based startup Kala Pharmaceuticals is developing an anti-VEGF/anti-PDGF combination as well, for instance—the Ophthotech drug is the furthest along in development.
Ophthotech’s big IPO raise will help bankroll a late-stage clinical trial, in which it’s hoping to show that patients getting injections of both its anti-PDGF and ranibizumab fare better than those getting injections of the Roche drug alone. Ophthotech will start that big Phase 3 by the end of the year, and plans to have the first top-line data from that study in 2016. Ophthotech owns worldwide rights to the drug.






 

Tuesday, December 1, 2015

Gilead (GILD) is a Sell, We Believe Shares will be Trading Below $100.00 as the End of 2015 Nears

  • GILD's HCV Sales slid 2% from Q3 2014 to Q3 2015 and some analysts believe Sales peaked back in Q1.
  • Potential rate hike and subpar Q4 earnings season should fuel an equity swoon and GILD won't be immune.
  • With the high cost of drugs becoming a Political issue as the debates heat-up, GILD will probably be forced to lower their prices or chance greater media scrutiny and reimbursement hurdles from insurers.

 


     
 
 
  • 1-year chart signals Bearishness over the next several weeks. GILD has failed to hold its 50, 100, & 200-day averages and more negative Directional tells if we glance at the 'Williams %R' and 'Relative Strength' studies

     
  • SELL GILD is our professional blogging conclusion. 




 
 

If you'd like to know our #1 biotech to Buy & Manage from today thru 2018 please send us an email and we'll forward the details: Psychologyofthecall@gmail.com
 
Happy Christmas and a Healthy 2016!
POTC~

Monday, November 23, 2015

Chipotle Mexican Grill (CMG), the Ramifications of an Ongoing E.coli Outbreak Analyzed...

A Larger Number of Chipotle restaurants still Unsafe to Dine at due to the Harmful Bacteria "Shiga toxin-producing E.coli O26 (STEC O26)" that 1st Appeared on the West Coast but just recently We Learned that this Bacteria has been Linked to Illnesses Across the Entire U.S. from the Midwest to New York. 

What Motivated Ms. Katie Reilly with Reuters to Write a Complimentary Piece about Chipotle on Saturday is Disturbing, yet Odd things Occur during Times of Crisis when Billions of Dollars and Brand Reputation are on the Hook. Katie's Jovial Piece Claimed that She spoke to some Chipotle Customers and found that they are Undeterred by the E.coli Outbreak, telling her that their Main Reason for Eating the Food is because It's Fresh. Asinine and Bordering on Highly Suspicious Media, Buzz? You Decide by clicking here.

The Food Source(s) that is now Responsible for Umpteen Violent Illnesses Remains a Mystery. Until the Scientists from the U.S. Centers of Disease Control (CDC) Identify the Food/Menu Item/Source that is Causing this Nightmare Outbreak, 45 Victims in 6 States Currently with 16 having being Hospitalized, Chipotle's Reputation is Likely Plummeting from Day to Day.

Saturday's Bogus Press Releases that Many will Interpret as an Underhanded Deception in Order to somehow Try to Hoodwink the Public is Troubling. 

And a Critically Important Nugget No Wall Street Analyst has even Touched is Whether Chipotle's Food Outbreak is being Caused by  Contaminated (Accidental), or Adulterated Food (Wilful/Wanton Misconduct).

If We Find Out that Chipotle's Food was Adulterated by some Evil Doer(s), this would Spark a Criminal Investigation and perhaps Cause Diners Who Decided to Turn their Backs to become more Sympathetic in the long-run and come back.

The Healing Curves of Contamination versus Adulteration will be very Different for All Involved with Chipotle. Yet Regardless, Investors Should Remain Pained for the next Several Quarters at least as the company Admitted that Same Store Sales Growth would Slow to the Single-Digits in this Quarter and that Guidance was Given Before the E.coli Outbreak News was Disseminated.  





Thanks for Reading,
POTC~     



 

Sunday, November 22, 2015

16 People Who Ate at Chipotle had to be Hospitalized out of the 45 Who Fell Violently Ill in an Ongoing, Multistate (6), and Mysterious Outbreak Saga. Scientists from the CDC Are still Attempting to Identify the Food Source Responsible and Whether It's being Spread by 'Accidental' Contamination or 'Wilful' Adulteration, the Bad Bacteria is Shiga Toxin-Producing E.coli O26

  • Consumers should contact a health care provider if they recently became ill with diarrheal symptoms after eating at a Chipotle Mexican Grill restaurant.
  • The ongoing investigation has not identified a specific food linked to illness.
  • CDC will advise the public if specific steps are identified that consumers can take to protect themselves.
  •   
  • 3 additional states have reported people infected with the outbreak strain of Shiga toxin-producing Escherichia coli O26 (STEC O26) since the last update.
  • 45 people infected with the outbreak strain of STEC O26 have now been reported from a total of 6 states: California (2), Minnesota (2), New York (1), Ohio (1), Oregon (13), and Washington (26).
  • The epidemiologic evidence available at this time suggests that a common meal item or ingredient served at Chipotle Mexican Grill restaurants in several states is a likely source of this outbreak.
  • The investigation is still ongoing to determine what specific food is linked to illness.
  • CDC will advise the public if specific steps are identified that consumers can take to protect themselves.

  • Highlights

    • Read the Advice to Consumers »(http://www.cdc.gov/ecoli/2015/o26-11-15/advice-consumers.html)
    • CDC, the U.S. Food and Drug Administration, and public health officials in several states are investigating an outbreak of Shiga toxin-producing Escherichia coli O26 (STEC O26) infections.
    • As of November 19, 2015, 45 people infected with the outbreak strain of STEC O26 have been reported from 6 states.
      • 16 ill people have been hospitalized. There have been no reports of hemolytic uremic syndrome and no deaths.
    • The epidemiologic evidence available at this time suggests that a common meal item or ingredient served at Chipotle Mexican Grill restaurants in several states is a likely source of this outbreak.
      • 43 (96%) of 45 ill people interviewed reported eating at a Chipotle Mexican Grill restaurant in the week before their illness started.
      • The investigation has not identified what specific food is linked to illness.
      • Chipotle Mexican Grill is assisting public health officials with understanding the distribution of food items served at locations where ill people ate and this work is ongoing.
    • Investigators are using whole genome sequencing, an advanced laboratory technique(http://www.cdc.gov/amd/), to get more information about the DNA fingerprint of the STEC O26 bacteria causing illness.
      • To date, 10 STEC O26 isolates from ill people in Washington (9) and Minnesota (1) were found to be highly related genetically to one another.
    • CDC and state and local public health partners are continuing laboratory surveillance through PulseNet to identify additional ill persons and to interview them.
    • Consumers should contact a health care provider if they recently became ill with diarrheal symptoms after eating at a Chipotle Mexican Grill restaurant.
    • CDC will advise the public if specific steps are identified that consumers can take to protect themselves.

    November 20, 2015

    Case Count Update
    CDC is only reporting ill people that have been confirmed by PulseNet(http://www.cdc.gov/pulsenet/) as being infected with the outbreak strain of Shiga toxin-producing Escherichia coli O26 (STEC O26). Forty-five people infected with the outbreak strain of STEC O26 have been reported from 6 states. The majority of illnesses have been reported from Washington and Oregon. The number of ill people reported from each state is as follows: California (2), Minnesota (2), New York (1), Ohio (1), Oregon (13), and Washington (26).
    Among people for whom information is available, illnesses started on dates ranging from October 19, 2015 to November 8, 2015. Ill people range in age from 2 years to 94, with a median age of 22. Fifty-eight percent of ill people are female. Sixteen (36%) people reported being hospitalized. There have been no reports of hemolytic uremic syndrome and no deaths.
    This outbreak can be illustrated with a chart showing the number of people who became ill each day. This chart is called an epidemic curve or epi curve. Illnesses that occurred after October 31, 2015 might not be reported yet due to the time it takes between when a person becomes ill and when the illness is reported. This takes an average of 2 to 3 weeks. Please see the Timeline for Reporting Cases of E. coli Infection(http://www.cdc.gov/ecoli/reporting-timeline.html) for more details.
    CDC and state and local public health partners are continuing laboratory surveillance through PulseNet to identify additional ill persons and to interview them.
    Investigation Update
    CDC, the U.S. Food and Drug Administration, and public health officials in several states are investigating an outbreak of Shiga toxin-producing Escherichia coli O26 (STEC O26) infections.
    The epidemiologic evidence available to investigators at this time suggests that a meal item or ingredient served at Chipotle Mexican Grill restaurants at several states is a likely source of this outbreak. The investigation has not identified what specific food is linked to illness. Chipotle Mexican Grill is assisting public health officials with understanding the distribution of food items served at locations where ill people ate and this work is ongoing.
    State and local public health officials are interviewing ill people to obtain information about foods they might have eaten and other exposures in the week before their illness started. Forty-three (96%) of 45 people interviewed reported eating at a Chipotle Mexican Grill restaurant. The investigation is ongoing to identify common meal items or ingredients causing illness.
    Investigators are also using whole genome sequencing, an advanced laboratory technique(http://www.cdc.gov/amd/), to get more information about the DNA fingerprint of the STEC O26 bacteria causing illness. To date, whole genome sequencing has been performed on STEC O26 isolates from 9 ill people in Washington and 1 ill person in Minnesota. All 10 isolates were highly related genetically to one another. This provides additional evidence that illnesses outside the Pacific Northwest are related to the illnesses in Oregon and Washington.
    Updates will be provided when more information is available.

    Tuesday, October 6, 2015

    Exact Sciences (EXAS) Fails to Impress U.S. Preventative Task Force (USPTF), EXAS Shares should Slide...

    mtsDNA (Stool DNA Plus FIT)



    The mtsDNA test (Cologuard®), concurrently approved by the FDA for marketing and by CMS for coverage in August 2014, combines the results of a FIT and DNA marker assays. It is the most expensive of stool tests, reimbursed by CMS at $493 per test.307 In comparison, the cost of FITs is generally much lower, with a CMS reimbursement of $23 and a mean commercial reimbursement of $21 per test.308 In one large study (n=9989), mtsDNA was statistically significantly more sensitive for CRC at 92.3 percent than OC FIT-CHEK (73.8 percent) using a recommended single stool sample for each test. In other included FIT studies, OC FIT-CHEK had higher estimated sensitivity than observed in this study, when multiple samples or lower assay cutoff was used. However, comparison of test performances across studies is difficult due to differences in study design and population characteristics. In all cases, increasing sensitivity was accompanied by decreasing specificity. Specificity for the mtsDNA test (84.4 percent), for example, was lower than all FIT assays, resulting in the highest false positive rate

    The high rate of unsatisfactory samples for the mtsDNA test (6.25 percent) was concerning when compared to these rates for FITs (0.3 percent). Excluded samples in this study were in part due to leakage in shipping, which the manufacturer reported has since been fixed, as well as a study quality control measure that authors indicate would not be encountered in clinical practice.166 At a programmatic level, information is lacking on patient adherence and the appropriate screening interval, as well as the impact of false positives as a result of lowered specificity.

    POTC~

    Sunday, August 16, 2015

    The Timing of Goldman Sachs's analyst Terence Flynn's Sell rating on Ophthotech (OPHT) was not Coincidental

    Dear Terence Flynn and All Readers,  

    On Friday, August 7, 2015, Terence Flynn PhD issued what we interpreted to be an extremely lukewarm Sell rating on Ophthotech (OPHT). Then just 6-days later news broke from Avalanche (AAVL) which weakened part of his fundamental thesis of competitive threats. Since the Sell rating OPHT has pulled back 17.9%, but now that we know more details we expect shares to rally back above $60/share sooner than later. Flynn's Sell rating was rendered somewhat obsolete in less than 1-week and now poses a greater risk to Traders who followed him and shorted the stock. Fasten your helmet as we attempt to debunk Flynn's downgrade to Sell and shine some Educational light on the fuzzy tactics some analysts use and always get away with; perhaps this time we have a high-profile tuna, hooked.

    After certain facts hit the wires on Thursday, August 13, 2015, the probability of a bidding war for OPHT has increased by roughly 33% by year-end as there are no drugs either on the market or in any clinical trials, that we know of, with the stellar pharmacological profile of Fovista.




    OPHT's Fovista is a drug currently in Phase III trials for the treatment of wet age-related macular degeneration (AMD). Fovista marked much better results as measured by reading acuity in Phase IIb trials than Roche's Lucentis which has been FDA approved and rings in Sales of roughly $2 billion per year.






    Even after the broad pullback in biotechs of late and Flynn's very aggressive downgrade, OPHT's chart since its IPO 2-years ago is in tact -bullish- and in our opinion the current technical pullback offers Traders and aggressive Investors a very attractive Entry point, right-here right-now.






    OPHT's market cap at $51.00/share = $1.77 billion, that's < 1X of yearly Sales of Lucentis for AMD. Just based on that fundamental metric we are convinced Flynn will be proven wrong literally within days as OPHT rallies back closer to $60.00/share than $50.00/share. And we will admit defeat IF shares trade down to Flynn's Price Target of $45.00 any time from this day forward. 


    In Phase IIb trials Fovista showed benefits beyond improving reading acuity or simply halting the damage to blood vessels. There was some science that pointed to the drug's ability to Reverse some of the blood vessels damaged by AMD. This data was in no way definitive since Phase IIb was not designed to test or achieve that goal, yet Phase III is extremely exciting since there is no drug on the market with that unique quality and the patients who have a more aggressive form of AMD often go blind. OPHT will issue a press release updating this monumentally important data in Q4, 2015.

    Flynn did mention the Buyout risk scenario but argued it was small since Fovista is in Phase III . His Sell opinion focused more on valuation (technicals) and competitive threats. But now we know that just 6-days after his report 1 of the competitive threats has been erased

    Here are some insights from Jerry Helzner just before AAVL went public 13-months ago. Flynn mentioned REGN in his Sell report so we're nearly 90% sure that he knew about the partnership with AAVL that was forged more than a year ago. "Fish still on."

    July 1, 2014
    The new collaboration covers novel gene therapy vectors and proprietary molecules, discovered jointly by Avalanche (Menlo Park, Calif.) and Regeneron (Tarrytown, N.Y.), and developed using the Avalanche Ocular BioFactor, an adeno-associated virus (AAV)-based, proprietary, next-generation platform for the discovery and development of gene therapy vectors for ophthalmology.

    The collaboration covers up to eight distinct therapeutic targets. Regeneron will have exclusive worldwide rights for each product it moves forward in clinical development. In addition, Avalanche has the option to share in development costs and profits for products directed toward two therapeutic targets selected by Avalanche.

    As part of the agreement, Regeneron has a time-limited right of first negotiation for certain rights to AVA-101, Avalanche’s gene therapy product targeting vascular endothelial growth factor currently under development for the treatment of wet AMD, upon completion of the ongoing phase 2a trial. 

    Credit to Jerry Helzner, Senior Contributing Editor of Ophthalmology Management magazine and online. 

    Here's a look at the 27.6% selloff AAVL suffered last Friday, 1-day after the company pulled their lead AMD candidate AVA-101 stating that the drug will not proceed to the next Phase but return to their labs for further analysis after they took a closer look at the data. 

      




    Though this blog is mainly an Educational outlet for us as well as Traders and Investors who appreciate reading market analysis that uses a combination of techniques often sprinkled with a lot of common sense and behavioral psychology in an attempt uncover the Truth. 

    Flynn's Timing of issuing a Sell on OPHT we believe was not coincidental but calculated, based on public information that AAVL was going to have a live conference call regarding earnings as well as a progress update on AVA-101. Flynn was hoping that the update on AVA-101 would be bullish but it backfired bearish.


    Our thesis is that Flynn was worried about a positive update regarding AVA-101 so he took a Defensive leap 6-days before AAVL's press conference by downgrading OPHT to a Sell.  


    Please note that Fovista, currently in Phase III trials, showed better efficacy in reading acuity not only versus Roche's Lucentis but also REGN's Eylea in Phase IIb trials where an very large group of 499 patients suffering from AMD were studied. 


    The two drugs known as Eylea and Lucentis are the standard treatment for AMD today as both have been approved by the FDA several of years ago. And since the threat from AAVL's AVA-101 is now at least delayed, a bidding war for OPHT could occur sooner than Flynn hypothesized in his report.   


    Do you agree with our psychology that Goldman's Sell rating was really a Defensive call just a few days ahead of public knowledge that AAVL was set to release earnings and a progress update on AVA-101, a drug which REGN backed as part of a collaborative agreement. 


    We believe that Flynn's Sell rating was motivated by the potential of positive data breaking regarding the pharmacology of AVA-101 that was set to go public on August 13, 2015, yet he made no mention of this catalyst in his report. 


    We believe that our thesis carries more weight due to the enormous difference in Price Targets from Oppenheimer's Ling versus Goldman's Flynn with main focus being on when these Price Targets went public. 

    Aug 7 - Flynn, Sell OPHT, Price Target $45.00
    Aug 13 - AAVL's drug AVA-101 fails
    Aug 14 - Ling, Outperform OPHT, Price Target $95.00

    It's crystal clear that Ling's report was issued hours after news of AVA-101's failure while Flynn issued his report 6-days before the AVA-101 facts were known. 


    We believe Flynn's downgrade was rooted less in valuation but the competitive threat from AVA-101 that lied ahead. We very much question the Timing of his actions and it's difficult for us to overlook that he simply didn't know or care about the AAVL press conference scheduled for August 13. 


    Flynn did nothing unethical but we give him a 'D' for lack of transparency in addition to the fact he was missing in Manhattan on Friday, the day after the AVA-101 news as well as the $50.00 Higher Price Target from an Oppenheimer analyst armed with more timely facts.


    Will Flynn update his Sell opinion to at least a Neutral sooner than later or will he just hope either nobody figures out his fuzzy tactics or that the broad Biotech pullback affects OPHT


    With AAVL's AVA-101 back in the lab we feel certain that the previous results were staged and therefore not scientific. We believe AVA-101 has < a 10% chance to ever win an FDA approval.

    Where was Goldman's Terence Flynn on Friday to address his thesis of 'competitive threats'? His 10-day old Sell thesis on specifically mentioned the potential for 'competitive threats' from Regeneron (REGN) and Roche, and to be fair there was no mention of AAVL in the write-up. 



    We believe Flynn's Timing was not coincidental but calculated
    1. Flynn knew that AAVL scheduled an earnings report and AVA-101 progress update for Thursday, August 13, 2015, 
    2. Flynn's Sell rating on OPHT was disseminated on Thursday, August 6, 2015, exactly 1-week ahead of AAVL's earnings and progress update on AVA-101,
    3. In his Sell report Flynn mentioned the potential for competitive threats and REGN who we know was a backer of AAVL,
    4. If AAVL issued a positive update on AVA-101 that would have caused OPHT to suffer a technical selloff since they are partnered with REGN, a stock highlighted in Flynn's Sell thesis on OPHT

    REGN's executive team saw promise in AVA-101 because they gave AAVL an undisclosed upfront payment and the potential for a whopping $640 million in milestone monies. 

    REGN is an extremely respected and high-profile biotech that has been 1 of the best performers on the Nasdaq since 2011. REGN's due diligence regarding AVA-101 had to be thorough since they forged a partnership and took a financial interest in the company. Though AVA-101's failure was not a binary event for REGN we believe it boosted psychology of OPHT's executives and shareholders as now 1 'competitive threat' has been removed. 


    Oppenheimer's Ling Wang sprung to action on Friday, August 14, 2015, by issuing an Outperform rating on OPHT and price target of $95.00. Though the iShares Biotech ETF (IBB) Closed down 0.64% last Friday, OPHT bucked that downdraft and Closed Up 0.41% at $51.02.  


    We have no way of knowing all the facts and assumptions behind Ling's bullish thesis and $95.00 price target we know that just 15-hours prior to his report a huge setback occurred for AAVL



    Which analyst's rating on OPHT do you feel is more credible?

    • Goldman Sachs's Terence Flynn who acted ahead of the AVA-101 update with a Sell rating and $45.00 target, or
    • Oppenheimer's Ling Wang who acted after the AVA-101 update with an Outperform rating and $95.00 target.


    Oppenheimer's Ling Wang's opinion copied and pasted
    OPHT's lead asset, Fovista, a PDGF inhibitor, is being evaluated in three pivotal phase III trials in combination with approved VEGF inhibitors in with AMD. We see the phase III programs significantly de-risked by the positive efficacy and safety data from a large-size, similarly designed, phase IIb trial. We also view a strong MOA and the anti-fibrotic activity observed in retrospective analysis of the phase IIb trial as supportive of the disease-modifying activity of Fovista, which could expand the market substantially (not in our model). Key catalysts for shares include interim data from a phase II fibrosis trial by YE15 and phase III trials readout by YE16."

    We welcome anyone to email us with questions and comments: Psychologyofthecall@gmail.com

    Thank You,
    POTC~

    Monday, May 11, 2015

    Yelp Take-Under the Only Possibility Today, STOP and Look Both Ways Please! May 11, 2015



    After digging for credible information regarding Yelp's 'For Sale' sign we called and spoke with 3 employees at Amazon, Yahoo!, and Priceline. 

    The Amazon contact said that 'Yelp's public disclosure was the exact opposite of what a Co does if they want to negotiate fairly. He said 'the stock's 25% rise will not last because of the ridiculous tactic used in announcing a potential sale'. 

    Our contacts at Yahoo! and Priceline had slightly different opinions on interest in buying Yelp but the guy at Yahoo! also expressed concern with the recent stock spike which he blamed on Goldman.

    The conversations we had on Friday could be a clue that Yelp's market-cap must be closer to where it was before the spike, $38.00 - $40.00. And then just 1 out of the 3 companies could become more serious in tucking what was described as a 'struggling asset with strained leadership'.

    Always watching out for the Individual Trader's Best Interests,
    POTC~