Arnie: Time will tell whether the money is still there. To be fair, all bios have failures - the big guys too. The Cephalon issues include the recent failure and go much deeper:
1. How profitable will their active licenses be for them?
There's stuff happening out there for them. They have some good political ties. Chiron has not abandoned them, the Japanese still love them, deals are being cut in Europe etc etc. All of this may not return them to the lofty stock prices of the past. It may still require a signature drug or a piece of one. A piece of a narcolepsy drug would be worth more in revenues then all of a marketable Myotrophin (which they were already going to share in anyway).
2. How good is their science?
Beats me. - IMO, Myotrophin was a failure of politics and presentation more than a failure of science. They never claimed to have a cure for ALS - only a drug to retard the effects. What I've heard from talking to people close to the source is that Myotrophin is better than what's out there now. Of course, that and a dime won't buy Cephalon an aspirin now.
3. How much did they learn from their tough FDA lesson?
I hope they took notes.
4. What's holding up current approvals?
Maybe nothing. Maybe Cephalon DID take notes and they're being a little more careful this time. Maybe they've got another clunker. Maybe FDA backlog and less Life/ Death urgency associated with current candidate. I have 2 patents on a non-medication plastic pharmaceutical product. I was told to expect a minimum of 14 months before the possibility of reaching tentative FDA approval. Welcome to Washington Mr. Smith.
5. Will Frank Baldino continue to get funding?
I give this one an unqualified yes. He's among the best there is in this department.
6. Will Cephalon be a take-over candidate?
Isn't everybody who isn't Microsoft? If they are taken over, it'll be for something they have to offer in the bio-tech field, not just to acquire Frank Baldino. So the question here is are they bought on the way up, or down?
So far Cephalon has survived a great fall. Give me a company with money, some product, active multiple partnerships and the potential of once again trading at 10 times it's current levels and I'll give you a stock that I would consider buying. Needless to say, the risks associated with Bio-techs is high and Cephalon is no exception. I would buy at $5.00 expecting a 15-20% possibility of total failure, a 30% possibility of hitting $30 or more again and a 50+% probability of peaking at $15-$20 in another year. A doctor wouldn't operate with those odds. I wouldn't bet the ranch with those odds. I would however, gamble my lunch money. I need to lose a few pounds anyway.
How 'bout you Arnie?
regards,
Wally |
