Dr. Tracy is an independent investment newsletter writer with a solid background, known to be honest. Probably was recommending the stock and is looking for a good scenario.A couple of other comments today:
BioCentury: "Frank Baldino suggested it would be 'almost impossible for us to throw in $20-$30 million' for a combination test (with Rilutek) without the approval of Myotrophin. Robert Temple, director of the FDA's Office of Drug Evaluation, said that if the Myotrophin/Rilutek combination was more effective than Rilutek alone, the result would be sufficient to corroborate Study 1200 (the U.S. study) and support stand-alone approval of Myotrophin. Baldino said CEPH will review the panel's recommendation with the FDA prior to making decisions about future trials and the status of its tIND program, which has 450 patients enrolled."
Oppenheimer (Matt Geller): "We believe the outcome of this meeting demonstrates that the FDA is more responsive to data than to politics...Initially, the hearing seemed to be a contest between Dr. Temple and Dr. Leber. However, as the hearing progressed, Dr. Temple became increasingly frustrated by the sponsors' presentation of their data and his support began to soften...On the nagative side (for Cephalon), the company has a very substantial burn rate and may need to raise funds to stay in business. This could be difficult in light of the FDA's rejection."
That last comment is going to dog the stock price. If you used the strategy I described last night you bought calls at $11 3/4 and sold at $12 7/8. The stock probably drops back Monday morning on the first trade, giving you a chance for another one- or two-day day trade. Beyond that, I guesstimate the next stop is $5 (FDA turndown and fears about cash), $15 (CEPH agrees to do the combo trial and continue the treatment IND) or $25 (FDA approval), all by Labor Day. New options at $10 and $12 1/2 should be listed Monday. May be a better place to invest for the next 90 days. BTW, I have no active position or axe to grind on this one. My short and put are locked until next Friday's expiration. |
