So far, the scorecard for Peter and rkrw is pretty good wrt handicapping the recent binary events. One of the next ones up is APPX' Abraxane for breast cancer. I was of two minds on this. The drug is very similar to CTIC's XYOTAX in that it is a reformulation of taxol designed to aid delivery. Because of the design of CTIC's STELLAR III trial, we can infer that due to the fact that it is still going, XYOTAX is working. This would seem to augur well for Abraxane, however, there are several problems with APPX' trial design. The main one: it is likely underpowered, so a good p value probably won't happen. Further studies are underway, so I don't think the FDA will ask for more studies. I think they'll issue an approvable letter, pending additional data from these studies. As such, Abraxane will be delayed, not rejected, IMO. Given the stock's recent run from $25 in mid-October to upper $30s now, one could argue that the situation calls for shorting.
However, should the delay (or worse) happen, and the stock gets punished, I think it would be a buy. The reason is that they seem to own the generic injectables space. They have a terrific track record in that business, and that part of the company is profitable. So perhaps the safe way to play this is to wait for the FDA result and buy any reasonable dip. The stock should be much easier to value at that point.
Comments welcome. Hardly anyone bit on the invitation to handicap Aphton's upcoming PIII results. Probably best to stand aside or hang with the "short all clinical trials" crowd, as I can't realistically assign better than 50% odds myself. I don't have enough money for those gambles, it being gift buying time.
Cheers, Tuck |
