I have to give AGEN credit for a well timed secondary, some 4 million shares for $15 bucks a share. They are burning about $14 million per q and their 10-Q says they have sufficient resources to get them through the end of the year. I don't think they'll get much help from current partners in terms of milestone payments. The pipeline chart linked in the prior post shows several indications in PII or PIII, but a number of those are stalled, and odds of success seem low. One is AN-1792, Elan's Alzheimer's immunotherapy that caused CNS inflammation in some patients. Development is not halted, at least not yet, but that one is dead in the water until they can find a way around that problem (say a subset). Not likely this year, if ever.
The gp120 program? VaxGen is the licensee. The immune response to gp120 isn't that great. Adjuvants would help, and AGEN claimed nice results for QS-21. But injection site pain with QS-21 (even with the help of polysorbate 80, which diminished the pain to some extent) caused VaxGen to go with good old alum. I'm with Londo here, that one is bound to flunk. Besides, VaxGen has major manufacturing issues if it doesn't flunk. Without a dose-sparing adjuvant, they can never make enough, as it has to come from mammalian culture. No wonder VaxGen stock is so hard to borrow!
Most of the other partners, Progenics, GSK in some cases (such as malaria), are using single antigen vaccines that have shown middling results to date, and will need tweaking if they are ever to make it. The only multiple antigen vaccine incorporating QS-21 is a GSK melanoma vaccine. The good thing about QS-21 is that it elicits a balanced Th1 and Th2 response, while most adjuvants tend to elicit one or the other.
So I don't expect much of their infectious disease programs for a while. Further, the feline leukemia drug is licensed to Virbac of France. The pact was due to expire at the end of 2002, and negotiations were ongoing as of last 10-Q, but . . . here it is 2003 and no announcement. Oh well, it was not a big revenue source, anyway.
Which leaves Oncophage, competing neck and neck with CEGE's vaccines and gene therapy. Believe timelines and results were similar. Combo with Gleevec helped clear those bad white cells in CML patients, but is that clinically relevant? I don't know.
Though I expect patent issues with Stressgen to be a wash, they are spending money on opposition.
Bottom line, risk/reward looks pretty good to me. They'd have to hit a home run with Oncophage to generate any enthusiasm, IMO. I do not know when the results from that are due. The slightest hiccup there, and they have to dilute or partner to live.
No converts out, which is good for the company, but also means that enormous short ratio is not a hedge: it's a negative bet. The BSCP is about ready to join in that bet.
siliconinvestor.com
Looks like it just hit resistance near $12, and the market having digested the Bush stimulus package, now looks forward to the war and the earnings season. It's been a mild start in terms of warnings, but since AGEN doesn't have any, so what? But war related downside will affect it.
And VaxGen flop could come soon.
BSCP will look for a full position tomorrow, hoping for a bounce to high $11s.
Comments, supportive or dissuasive, invited.
Cheers, Tuck |
