[Some hedging from Adam F.]
I get the sense that Medarex is getting a bit frustrated about all the investor attention paid to its melanoma drug MDX-010, also know as ipilimumab. The company's presentation Wednesday spent a good amount of time on other drugs in the company's impressively deep pipeline.
Yet during the 30-minute breakout session with investors, every single question concerned MDX-010 and the highly anticipated release of data from a trio of phase III monotherapy studies in patients with second-line metastatic melanoma.
At the end of the Q&A session, Medarex CFO Chris Schade made a pitch for non-MDX-010 questions. There were no takers.
If there were table-pounding believers in the MDX-010 monotherapy melanoma trial story present at the UBS breakout session, they didn't make themselves heard. Most of the questions were tinged with skepticism, which wasn't too surprising.
Interestingly, however, that skepticism over the upcoming MDX-010 data isn't necessarily translating into big short positions in Medarex, at least from the skeptics that I hung out with before the UBS Medarex breakout session (and yes, they almost all work for biotech hedge funds).
These guys don't expect the stock to fall much below $10-$12 on negative MDX-010 data, mainly because the company's deep pipeline is a sturdy buffer against total blow up. Medarex at $18 might have been a good starting point to short, but with the stock at $14.16 -- not so much, with the downside now limited.
In fact, they say that a sharp drop in the stock on a negative result from MDX-010 will likely be a reason to buy for many investors.
This was a point I made in my original Medarex column, when I wrote: "If MDX-010 fails in melanoma, Medarex has a lot to fall back on -- that's important because while the stock could suffer in the short term, there are ample opportunities later for Medarex to succeed."
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