Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : Cell Pathways (CLPA) -- Ignore unavailable to you. Want to Upgrade?

To: tuck who wrote (319)	10/29/1999 4:21:00 PM
From: Dr. Seuss	Respond to of 566

It's not feeding time yet. Don't worry, you'll get fed.

To: tuck who wrote (319)	10/30/1999 1:21:00 PM
From: StockMiser	Respond to of 566

Yahoo re-post on FDA Approval: --------------- Misinformed by: Interludes_Palace (40/M/Florida) 10/29/1999 1:11 pm EDT Msg: 4494 of 4516 There are a few holes in your argument against FDA approval: 1. "First, in cancer drugs, merely showing efficacy against placebo is not sufficient for approval. The drug MUST be compared in THE SAME clinical trial as the most commonly used cancer drug for that particular indication. CLPA HAS NOT DONE THIS." First of all, Apotsyn isn't a "cancer drug" in the conventional sense at all. It is designed to prevent and eliminate polyps, which if left unchecked, can become cancerous. But the real key to FDA approval is to realize that the trial is designed to demonstrate long term prevention of polyps (ie, improved time to disease progression). The fact that the drug can and does eliminate existing polyps is compelling and complimentary, but not the basis for approval. So the question is simply "what is the conventional therapy" and how does Apotsyn compare. Well, if you contact a Gastro specialist you'd quickly discover that there are no approved drugs for either the prevention or elimination of these polyps. The normal course of therapy is to observe these polyps, and remove them if possible. In many cases, the entire colon is removed. Once the polyps turn cancerous, even removal of the colon is no guarantee of cancer prevention, and removal along with other conventional (such as chemo and radiation) are used - but only once cancer is indicated. If Apotsyn was being tested as a a direct cancer therapy, then I would agree that it would have to properly be compared to the most effective chemo (or other common therapy). But that isn't the case at all. Apotsyn is being tested exactly as it should be in the context as a preventative. The presumption here is that if the polyp growth can be prevented, then the cancer is avoided. Both the Apotsyn and placebo group recieved the most effective and predominant treatment - the polyps were monitored and surgically removed as needed. The end point was time to disease progression as measured by number of polyps present. This is a 100% valid trial even by your own definition. 2. "One, the drug must show superior efficacy (p<0.05) and improved safety. Two, the drug must show slightly better efficacy and significantly improved safety profile with a reduction in the incidence of side effects of (p<0.01)." Apotsyn has demonstrated 50% better efficacy (very high) without significant side-effects, and significantly improved safety than alternative, surgery. But the efficacy even goes beyond that since surgery doesn't prevent future growth and additional, often very invasive, surgery is usually required. This also brings up the quality-of-life issue, which is also clearly in Apotsyn's favor. And finally, even if the re-occurring polyps are removed over and over again, there is the constant risk of malignancy. Preventing polyp formation at the onset, which SAAND technology is specifically designed to do, gives these patients the best chance of ultimate survival. But the FDA also has to consider if Apotsyn would be used "intead" of another, possibliy superior therapy. In this case, the other therapy is surgical removal, which is still possible even if the patient is being treated with Apotsyn. Bottomline...the FDA has no risk associated with approval, either by direct side-effects, or by being a replacement therapy. With high efficacy and lack of other drug therapies, the FDA is gonna approve this one... IP

To: tuck who wrote (319)	10/30/1999 1:23:00 PM
From: StockMiser	Respond to of 566

Yahoo re-post of CLPA valuation (actually, a Yahoo re-post of a RG message) ------- Here is a copy of an excellent post by kaio off the Raging Bull forum discussing the specifics of valuation: ragingbull.com ------ My thoughts on valuation: Cell Pathways thinks the market for FAP is about 15-25 thousand, in each major continent: North America, Asia and Europe. They consider about 2/3's of these patients as targets for this drug, leaving aside those who have had a full colostomy. The basic math says: 20,000 * 3 * 2/3 = 40,000 patients. Ok, lets apply something less than $2,000/annum to this patient population which is what was indicated on the CC: I use $1,800 per year or $150 per month, or $5 per day: 40,000 * $1,800 = $72 million Apply the gross profit ratio, EBITDA ratio and net profit ratio as outlined in the Biotech Clinician: A gross profit ratio of 50%, then EBITDA of another 50%, leaving 80% as net profit: $72 million* 50% * 50% * 80% = $14.4 million $14.4 million / 26 million shares = $0.55 per share $0.55 earnings * P/E of 25 = share price of $13.84 or call it $14 for simplicity. $14/share is not gonna raise the dead on Wall Street, and probably helps to explain some of the continued lack of luster in some minds. But it looks like Cell Pathways goes from net less to net profit pretty quickly, and has a cash flow for other trials and supplemental indication applications to FDA. It also pretty much forces the shorts out of CLPA and that alone will probably cause a spike in prices. But the sporadic polyp indication, adds another 280,000 patients if only 10% use the drug. (Haven't factored in the caution of trav007 about drug use costing more than current therapies but 10% still seems a reasonable number) The simply ratio is 8 fold more patients * $14/share = $122 per share. And we haven't even begun to factor in off-label use, and the many other indications in the pipeline, especially Prostate, and what I imagine will be gray-market internet sales once the urban legend of this drug becomes widespread. (You can easily buy Viagra on the internet w/o a doc's prescription: I believe a cancer PREVENTATIVE will have the same kind of wide spread allure?) Makoto's right about not needing much more DD to get into this stock. But to answer MPB1x2 question about docs and their view. The above example uses Cell Pathways patient estimates and drug price, and Biotech Clinician's profit ratios. TMOG, another doc on this board, postulated on Yahoo today about 100 million users in five years and a share price of $3,000! He relied on a large off-label factor which my more conservative $122 share price does not. dwitt and Makoto are certainly right about hanging on for the ride up. In time, with more indications, and wide spread awareness, the P/E will certainly exceed 25 and any time spent on a valuation model starts to fill one's head with dreams of yachts, ocean front retreats, etc. So, I personally think Heather's being very cautious, but she's been burned once and is probably twice wary.

To: tuck who wrote (319)	10/30/1999 1:28:00 PM
From: StockMiser	Read Replies (1) \| Respond to of 566

Additional valuation models from RG board: ------- By: MPB1MPB1 Reply To: None Saturday, 30 Oct 1999 at 8:46 AM EDT Post # of 10675 Valuation models are so theoretical for Biotech's in the developmental stages Makoto probably has the best take -- buy and hold. Guessing the future value is much like day dreaming what you would do with the money if you won the lottery. It is enjoyable and unlike winning the lottery I believe we have a real chance of success. Just to compare some numbers on patient populations: FAP Heather: app 3,600 -- MPB1: app 20,000 -- Kiao: app. 40,000 --a f lang not calculated I would stay with 20,000 or 50% of the worldwide market for this indication. Sporadic Polyps Heather not calculated -- a f lange , Kiao and MPB1 are all at 280,000. Trav had some interesting comments so let guess at only 5% of the patient population namely 140,000 patients. On the CC I thought I heard true excitement for this application. Prostate Heather 36,000 -- a f lang between 25,000 and 50,000. MPB and Kiao not calculated. Lets just use Heather's number. No offense please but personally, I think these numbers are so low that it is all most silly. Guesses at PE's Heather at 45, MPB1 at 100, a f lang 10/20, kaio at 25. Lets just use Heather's numbers. Guesses at margins a f lange 10%, MPB1 15%, Kaio 20%, Heather 25%. I would uses Kaio's number. Ultimately IMO Heather will be right but I think in the first few years ramp up costs will depress margins. Lets be conservative with revenues per patient at $1,800. 196,000 patients times $1,800 times 20% = $70,560,000 profit. Divided by 26MM shares = $2.71 per share times a PE of 45 = $121.95 Heather was going out 2 years I was going out 5. Lets assume 42 months. Discounting back at a 30% return compounded monthly gives us a present value of $43.23. You can multiply PV by the percentage of off label usage. Makoto asked when to sell -- when 3 people come up to you in Joe's Bar (one of them has to be the bartender) and say they have found the MSFT on the 21st century.