This analysis was done by a friend of mine not taking into considersation any fundamentals:
" this is what I see on the chart:- on balance volume- trending up since last july. This means more volume whenthe price of the stock goes up than volume on the down side.- macd gave a conditional buy signal in october '96 and a full buy signal inearly january with a price about 20.
- trends -the stock broke through the down trend in early january,`97 with alarge up volume.
- the high of ~40 occured early january of '96 then trended down until early january,`97. The target price could be 41, and the first support at 20."
Cephalon, Chiron Finally Submit Application For ALS Drug
By Jesse Eisinger
NEW YORK (Dow Jones)--Cephalon Inc. (CEPH) and Chiron Corp. (CHIR) finally submitted their
long-awaited application for myotrophin, one of the most controversial drugs in biotechnology.
''Clearly it's an important milestone for the company.'' said Meg Malloy, an analyst for Hambrecht &
Quist. ''I think the odds are good for a favorable outcome at the FDA.''
Chiron and Cephalon are jointly developing myotrophin to treat amyotrophic lateral sclerosis, also
know as Lou Gehrig's disease, a fatal degenerative neurological disorder. The companies will split
sales of the drug 50/50.
The application contains data from two pivotal trials conducted with myotrophin on about 450
patients. New data is included as well, concerning long-term survival and levels of myotrophin, the
name of insulin-like growth factor-1, in the blood.
The new-drug application at first was supposed to be filed about six months after Cephalon made
public with much fanfare the results of a North American study in June 1995. At the time, the
company hailed the results as ''spectacular,'' as did Wall Street, which sent Cephalon's stock
soaring as much as 95% at one point in the day before finishing up 75% at 18 3/8. The
announcement ended a years-long bear market in biotech stocks, spurring the sector for about a
year.
But before the company could apply for approval, the second trial finished and the trouble began. In
late October, 1995 it made public the results, from Europe. Though the company claimed the trial
backed up the results of the first, some analysts maintained the opposite.
Some analysts, notably Smith Barney Inc.'s husband-and-wife team of Reijer Lenstra and Toni
Claudio, raised red flags. They contested the claim that the trial showed that the drug worked and
also raised serious questions about the number of deaths in the trial. In the European trial, there
were more deaths in the drug group than in the placebo groups.
A year after the original trial-result disclosure, the Food and Drug Administration scheduled a highly
unusual advisory panel meeting to consider whether the agency should approve the drug under a
compassionate-use program, known as a treatment investigational new drug approval. The panel
recommended approval of the treatment IND, though many panel members said they would not have
recommended full approval of myotrophin without another trial being conducted.
The companies expect the drug to be taken up by the same advisory panel that recommended
approval of the treatment IND, according to Jason Rubin, a spokesman for Cephalon. That could
happen mid-year, potentially setting up a final FDA decision by the end of the year or early next,
analysts said.
''It's not a slam-dunk by any stretch,'' cautioned David Molowa, an analyst for Bear Stearns & Co.,
who covers Chiron.
Analysts said the drug's chances of approval may have improved after another high-profile drug for
ALS, brain-derived neurotrophic factor, or BDNF, developed by Regeneron Pharmaceuticals Inc.
(REGN) and Amgen Inc. (AMGN), failed in a late-stage trial. Only one other drug is approved for
ALS, Rhone-Poulenc Rorer Inc.'s (RPR) Rilutek, which many analysts say has been a
disappointment.
But even if the drug is approved, it isn't clear that the drug will sell. Once it was widely seen as
potentially a huge seller, but the enthusiasm has tempered. If the drug is granted only limited
approval, it will be tough sell in marketplace, said Molowa.
Currently, there are 200 people enrolled in the myotrophin compassionate-use program, which
provides the drug for free. There have been close to no drop-outs, said Rubin. Enrollment is low
because of the limited availability of the drug.
The companies continue to administer the drug in an ''open-label'' fashion to those who were in the
clinical trials. Of the 450 in the trials, about 70 remain on the drug today, said Rubin.
Hambrecht & Quist's Malloy, a bull on the drug, sees the drug having potential annual sales in the
$200 million range several years out, while in its first full year on the market, she expects the drug
to hit slightly over $100 million.
Investors sold Cephalon stock on the news. Nasdaq-listed Cephalon, which has run up, especially
since the BDNF failure last month, was trading off 1 3/8, or 5%, to 26, on 970,000 shares, compared
with average daily volume of 668,000. Chiron shares were up 1/4, or 1.4%, at 18 1/8 on about half
their average daily Nasdaq volume of 1.2 million.
Make your analysis as you want using charts and all. Check the SEC pages and the experience this company has submitting NDA's. Check out the results from the European study. The FDA will not approve a controversial drug if there is a treatment already (Riluteck, Rhone Polenc Rorer). See what the press release says on the product!
I wish you luck. If I were you I would sell it now or short and make a profit when it tanks! I expect a price of $15 way below the end of December 1996 low of about $17. |
