shorting styles...
As an opening statement, I realize that going short stocks that others own is not greatly popular. But it's not personal.
My shorting style is 95% fundamentals, 5% timing, and I prefer taking longer term short positions. As disclosure, I'm currently short ingn from months ago and I was short imgn for a long time in between christmas and about the middle of this year. My strategy is to focus on companies that I think demonstrate any of the following:
1. bad management / untrustworthy management
2. shaky drug / overly fancy technology
3. poor development program
MSHL / NVGN qualifies for 1, and a bit of 3 in my book. Misleading reporting of objective responses when they've not been verified, misreporting of response rate percentages... things like that. Drug may be effective in combo, but I personally believe bad management will flush it down the tubes.
INGN is mostly 3 with some of 1. I think their BLA strategy is presented to investors in a disingenous manner, they never provide a straight answer to the simplest of questions, and their phase 3 trials have been enrolling since the days of the bubble... :-)
IMGN is mostly 2, with a bit of 1. The conjugated antibody method has "too many notes"... (1) drug must remain conjugated to antibody, (2) must bind tumour cell, (3) must get internalized, (4) must then dissociate... and all this must happen in sufficient amounts for the toxin to reach a high enough level in the cell. That's too many steps given that each step has a low probability in and of itself. Also, the management of this company has cashed it in... they're simply interested in keeping the company alive, and have practically sold the entire pipeline to collaborators like mlnm and aventis. I wouldn't call them bad or untrustworthy, but rather uninterested. I think, at best, one drug from imgn will ever make it to market... and even then, their low cut of the proceeds ensures that they'll never command a large premium.
ONCY is a mix of 1 and 3. Management is unexperienced and amateurish, and the drug development process has been extremely slow. It is understandable that a replication competent virus may be guided slowly through the regulatory process by the FDA, but that's life... the slow development will protract cash burn and ensure future dilution. I also have no faith in the ability of their scientific staff to develop a pipeline to back up the clinical candidate. |
