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Subj: Re: H & Q Conf Report Part 1
Date: 97-01-10 23:34:58 EST
From: Counsel SF
The news from the securities professional [and he is a highly successful one] at the H & Q presentation is as follows:
First, most all of the news - he felt - was positive from the pure investment viewpoint. He heard a rumor in the hall - not part of IMUL's presentation - at the end of things, that caused him some concern. He is the report:
1. Joe Marr presented and he gave a good presentation. More than 100 people attended the main ssession which is far more than average for a stock without a well-developed following. After the main presentation, there was a "break-out" presentation which was attended by about 25 people including our analyst. The primary comments and impresions he came away from the two meetings with are as follows:
2. They had a good meeting with the FDA on December 6th regarding the safety issue. [I assume this has to do with Allervax Cat re-trials].
3. There is going to be a far greater emphasis this round with dosing the more seriously allergic patients with the higher doses where the primary therapeutic benefit appears to occur.
4. There was a lot of discussion about IMUL's othe vacines, particularly the Cocaine vaccine which is a product of great interest to many attendees [ suggests to me that many of the "non-believers" as to allergy products are still keenly interested in the non-allergy IMUL products, esp. this product.]
5. The financial "burn" rate is under very good control.
6. Balance sheet is still very strong.
7. IMUL hopes to file what I think will be an Investigational New Drug [IND] application with the FDA around April 1, 1997 [hope there is no irony with the date] on the Cocaine therapeutic.
8. Dr. Marr said the trial would be for 5 months and the "target population" will be cocaine addicts in recovery programs. They will provide the IMUL product in order to see its effect on such patients to stop craving and/or to stop such people from getting a kick from the illegal drug.
9. Dr. Marr also said - and this is one of the most fascinating revelations of the whole conference, that IMUL is working on a nicotine vaccine because nicotine acts similarly in terms of being manpulatable into an anti-craving anti-"high"therapeutic. While this came out, surprisingly, there was less interest in this than in the occaine product which is farther along. A nicotine product would have a far broader market, to say the least.
10. On the ragweed results, their target is to have a 22% differential between the placebo effect and the therapeutic. If they reach than figure, they wil be pleased.
11. Ragweed is being evaluated now i.e. the results are out of the box and they plan to report the results in February.
12. Now the neutral to slightly negative points -- there was little comment about partnerships - not sure what that means. I may have to press my source a bit more as this interests me but it may have blown by him; same goes for recent senior management changes. So far as I know not much was said.
13. The one potentialy bad negative was a rumor our analyst friend picked up in the hall after IMUL's presentation. He bumped into an old friend of his he hadn't seen in years and they cahtted about IMUL. Apparently the friend has followed the stock and is not very happy with it. The rumor is that there is a commission member at the FDA who is is not a big fan of biotechs in general and who also tenbds to be very tough on allergy therapeutics as well. The implication was that IMUL may be having trouble persuading an important individual commission member who plays a big role in the approval process.
Rumors are tough to either substantiate or disprove. The fact that a Wall St. professional would state that in polite chatter with an old colleague strongly suggests that some segment of the professinals out there believe this which is more important to the stock price than whether the rumor is true.
In that sense, Gerety's departure can be seen as more positive than negative. The positive is that Dr. Marr seems strongly committed to working with the FDA in different ways than was the case with the previous president. If all the other efforts just did not work and someone at the FDA just was not capable of being budged, then changing the CEO and the presentation paradigm is obviously the thing to do.
CONCLUSION: Ragweed news coming in Feb. - hopefully at 22% of better differential.
Cocaine trials to start about April 1.
Nicotine to start gettting some pre-IND press.
Cat to hopefully have better design after successful meet with the FDA. Paradigm with FDA apparently changing somewhat with Dr. Marr.
Dr. Marr a good presenter - looks presidential.
Not a bad report on the whole. Now the BIG one is getting over the 22% jurdle for Ragweed. Everyone keep fingers crossed because if IMUL exceeds this hurdle rate, there are more waves of favorable news to follow. If ragweed fails to meet hurdle rates, there may be a serious concern whether the allergy business is really commercializable within the parameters of the cash burn and financial assets in the till.
My asessment, if Ragweed results are good enough, we ought to go over 10 in a good market in not too many months threafter. If it bombs - this stock, while it won't be "toxic waste" per se that no-one wants to own (because of the rest of the pipeline which is very interesting), IMUL will be more of a development level company rather than a company on the edge of commercializing and we could have a lot longer to wait.
The nicotine potential boggles the imagination. That will make the obesity market look like a joke. I sure hope it works.
I'm staying on board with my holdings. I'm going to watch ragweed very carefully. For people who follow the stock and are too scared to jump on board at these very low prices, ragweed may be thepivot point. If ragweed is excellent you'll wake up one day with a big market bump but it will NOT be to late to jump on board and participate. If ragweed is bad, or too equivocal, you'll get the opportunity to see what the market values the company at with the assumption that the allergy drugs are going to be really tough to get to the market. The current allergy therapeutics are so crummy, I hope the allervax products make it for the sole purpose of helping sufferers even if I never make a dime from this stock. If there is one thing I hope the FDA "gets" it is that 52 shots per year for some people and the continuing misery of perpetual allergies create an intolerble quality of life for hundreds of thousands of people who are not taken very seriously. Those victims deserve much more from all of us but especially from the FDA.
Here's hoping for good returns for all of us.
COUNSEL SF
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