Wednesday, February 19, 2014

Daily Dose - AVEO, OGXI, PRAN

Welcome back to today's daily dose!  I'm sorry for the hiatus but it took me a few weeks to recover from the Seahawks Superbowl victory!  The Nasdaq Biotech Index fell .98% today which is consistent with the drops in the major indexes.  Here are some highlights.

AVEO Pharma AVEO was unchanged today almost a week after announcing that Astellas ended it's partnership for it's lead compound Tivozanib after disappointing recruitment in it's breast and colorectal cancer trials.  This is no surprise after my prior post regarding the drug.  Aveo is left with a few early stage candidates and a pile of cash.  If the board of directors fulfills it's fiduciary responsibilities, they will put the company up for sale or look for a reverse merger with a private biotech before they burn through the cash.  There's also value in it's NOL's which could provide a profitable biotech a tax offset against profits.  I do have a position in AVEO as outlined below in hopes for this outcome but I wouldn't recommend purchasing the stock. 
 AVEO

 
1.85  


8,000   $1.78   $539.93   3.79%   $14,800.00     
 AVEO Jul 19 '14
$2.50 Call

 
0.25  


-40   $0.15   -$440.61   -68.78%   -$1,000.00  
OncoGenex OGXI announced that the target number of events (deaths) was reached in it's phase 3 trial in prostate cancer.  The drug, Custirsen, is in three phase 3 trials (first line prostate, second line prostate, and lung cancer) with partner Teva Pharmaceuticals.  Management expects results somewhere around two to three months from now and a positive overall survival benefits would be massive for this company and stock as they have no approved products.  I find the company extremely inexpensive with a market cap of $172 million with a drug in three phase 3 trials and another drug, Apatorsen, in seven phase 2 trials in various cancer indications.  They also expect phase 2 results for Apatorsen in bladder cancer in the second half of the year.  I think this company has tremendous upside highlighted by my below position.
 OGXI

 
11.70  


5,000   $11.01   $3,402.46   6.18%   $58,500.00
 Prana Biotech PRAN fell over 13% after making a huge run the day before after reporting mixed results from it's phase 2 study of PBT2 in Huntington's disease.  The big catalyst will be the results of it's PBT2 phase 2 study in Alzheimer's disease which is expected in March.  The Huntington results were mixed - the primary endpoint was safety which was met but the efficacy results weren't impressive.  An effective Alzheimer's treatment would be a gold mine but it's proven extremely difficult to treat so the odds are very low for a successful phase 2 outcome.  Nonetheless, I've taken a small position as I'm comfortable with the risk vs. reward but I would only recommend a small position for my readers due to the tremendous risk (ie don't mortgage your home or put your kids college money in this security!).
PRAN
  8.76  


2,000   $5.2666   $6,976.81   66.17%   $17,520.00
That's it for today's daily dose and come back tomorrow for my highlights and recommendations for the day.  Thank you!

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