Wednesday, October 29, 2014

World without QE

At 2:00 p.m. the federal reserve chairperson Janet Yellen acknowledged the conclusion of QE (quantitative easing) for the foreseeable future.  At one point in the depths of madness during the past six years, the government was buying up to $85 billion a month in assets to stimulate the economy. That $85 billion a month equates to around a trillion dollars a year.  In hindsight, stocks did incredibly well with few and short duration market corrections.  But how will stocks behave after pulling liquidity. That is the question moving forward, and will the small pullbacks that we have seen over the past few years, grow into full corrections of -10% or more? Below is a chart of all the market pullbacks over the past two years.
Up to this recent September pullback of -9.9%, the largest fall was -7.4% in 2013 with many small moves lower in between.

Bottom Line:  The announcement today to the conclusion of the Quantitative Easing programs is the right monetary policy for the long run. So congratulations to Janet Yellen for concluding the multiple asset bubble creating type policy that has occurred for many decades.  But, as we all know, there is "no free lunch" and we should prepare for a less liquidity fueled market ahead, with more volatility, and deeper and longer bear market corrections in the future.  Thank you for reading, we currently hold shares of Acadia Pharmaceuticals.

Friday, October 17, 2014

Acadia Pharmaceuticals: ($26.06)

It's been a wild week in the markets, and individual stocks will get tossed around with the predominate trend. To keep perspective a look at a daily chart of ACAD with fundamental comments attached.
We just experienced a -9.9% overall market correction low ending this week, and ACAD pulled back to around $22.00.  The stock held up well under the conditions.
The above chart is a current month (October) to date.  Despite the market correction of -9.9% that bottomed this week, the stock is up mid-month around +5%.  

Bottom Line:  Acadia has many potential catalyst's ahead listed below.

1.  Filing the new drug application for Parkinson's Disease Psychosis with Nuplazid by year end.
2.  FDA acceptance of the application within sixty days of filing.
3.  Potential priority review (6 months review time) with FDA application acceptance.
4.  Potential FDA approval in six or ten months from filing date.  
5.  Six to nine months after filing with the FDA, the company plans to submit to the EU for the same indication.
6.  The start of a phase 2 clinical trial for Parkinson's patients who have sleep disturbances, by year end.

Disclosure:  We are long term investors in ACAD.

Monday, October 13, 2014

Another Volatile Day

Some extreme technical readings are at play now that could signal a market bottom, or at least a strong bounce higher over the next few days.
 
The fear gauge, also known as the VIX Index has spiked to levels not seen since 2012.  The VIX can be used as a contrarian indicator.  In other words, when many are fearful (buying put protection) a buying opportunity could present itself, which is the contrarian view.
The New Highs / New Lows indicator is also at extreme levels that suggest, the risk of entering the market is less than buying when the indicator is at extreme high levels.  

Bottom Line:  These two indicators along with others that I follow have been reliable in the past to help determine market bottom readings, or at least presents a lower risk opportunity to buy stocks. Can the market continue to fall, by all means yes, but if you are looking to add a little market exposure here, the risks are less than when the market was at an all time high in September.  Thank you for reading.

We currently hold ACAD.

Friday, October 10, 2014

Keeping It Simple

As the world markets sell-off, keeping it simple with charts is the soundest way to manage risk.  With that said, we have two charts to show below. First is the S&P 500, and following is the German DAX Index.
 
Simple chart of the S&P 500 with the prior support level at 189.66.  A break of that level then we are looking at more than just the average pullback that we have seen for the past two years.
Germany is Europe's most important country from an economic perspective, and as that country goes, so does the rest of Europe.  The chart above is the German DAX Index.  These are German corporations that trade within that index.  The index just broke prior support to the downside, and is down -12.6% from the high of 2014, putting that index closer to bear market territory.

Bottom Line:  Easy to see we are in a down trending U.S. market, and have confirmation from Germany's DAX Index that we have a global slowdown in particular.  The charts above have an intermediate term down trending outlook. Thank you for reading.

Tuesday, October 7, 2014

Market Down Trend Continues

The trend of the overall market effects the volatility of individual stocks. Acadia is caught up in a market that is currently down trending.  There is a high correlation of ACAD with the XBI small cap biotechnology index, shown below.
The S&P will have a test of the most recent low coming up shortly.  Below is a daily chart with prior support at 192.33 that held just four days ago.  A break of the 192.33, than the next area of support is the very important 190.00 level.
Bottom Line:  All stocks get caught up in a market down trend, and ACAD is not immune from that. So as the overall market moves lower, so do the majority of stocks.  I expect the market to test the previous 192.33 low this week.  A break of the 192.33 level, then a very important test of the 190.00 support will come into play.  Thank you for reading.

We hold shares of ACAD.

Saturday, October 4, 2014

Avanir Pharmaceuticals

Avanir Pharmaceuticals (AVNR) is a biopharmaceutical company, focused on acquiring, developing, and commercializing novel therapeutic products for the treatment of central nervous system disorders (CNS).  The company just released top line results of their phase 2 trial for the treatment of agitation / aggression in Alzheimer's patients that were statistically significant.  The stock increased almost 100% after the top line results were released.

Quick Facts:
206 million shares outstanding
2.3 billion market cap
$317 million in cash

Intellectual Property:
AVP-923 US 2026
AVP-923 EU 2023
AVP-786 US 2030
AVP-786 EU 2028
AVP-825 US 2020-2023

Current & Investigation Drugs:

AVP-923  (Nuedexta)
Approved in the U.S. for (PBA), Pseudobulbar Affect, and approved in the EU also for PBA. Commercialization in the U.S. in 2011, and EU currently underway.
Phase 2 trial for Agitation / Aggression in Alzheimer's patients just completed.  Primary endpoint .00008 on the agitation/aggression domain score of the NPI.  Stage 1 (baseline to week 5) .0002, stage 2 (week 5 to week 10 change) .021.  Secondary endpoint, total NPI .014
Phase 2 for the treatment of Levodopa-Induced Dyskinesia underway.
Phase 3 trial completed for Diabetic Neuropathic Pain completed in 2007.  Investigating another phase 3 trial.

AVP-786 Adjunct Therapy Major Depressive Disorder
NCT02153502
Phase 2 - Results 2017

AVP-825 (Sumatriptan) for the acute treatment of Migraine 
NDA submitted in March of 2014, with a PDUFA date of November 26, 2014.  Breath Powered Technology is an intranasal for migraine and compared statistically significant to capsule 100 mg Sumatriptan .0001, with no serious adverse events.  Avanir will make tiered royalty payments to OptiNose based on net sales in North America.  GlaxoSmithKline generated over 1 billion of Imitrex (Sumatriptan) oral in 2008 prior to losing patent protection.

Bottom Line:  Avanir Pharmaceuticals has many moving parts in various stages of progress.  The most important date for this company is the PDUFA date of November 26, 2014, which will be the FDA's decision on whether to approve AVP-825 for acute treatment of migraine.  This is an inhaled treatment that has proven much more effective than oral capsule. Commercial operations in the EU for Nuedexta in PBA are underway, and could bring a partnership with an up front payment plus royalty agreement. The recent top line results look very promising for AVP-923 in Alzheimer's patients who are experiencing agitation / aggression, but safety issues with the composition of the product and potential side effect profile may hinder this indication down the line with the FDA. Dizziness and falls could be a concern for this group of patients and potentially QT interval readings. AVP-786 holds promise for CNS indications and it has patent out to 2030. Thank you for reading.

No positions in Avanir.

Wednesday, October 1, 2014

ACAD: Filled the Gap

A frequent term used in technical analysis is "filling the gap".  When a stock opens the day much higher than the previous day's close, it creates a gap of no trading volume between the previous day's close and the current day's open.  I mentioned this gap last week after ACAD received the "breakthrough therapy designation" from the FDA, which was a very positive news release, but also noted that it created a gap in the chart that was pointed out below, last week.
Fast forward to today and the present chart that ACAD has, and you will notice that the gap was indeed filled today, and a small bounce higher once that occurred from the chart below.  
Bottom Line:  The gap that needed to be filled, was in black and white, and that is what technical analysis is all about.  Eliminating the emotion, and seeing the chart for what it really is created a low risk buy point.  We are long term shareholders of Acadia Pharmaceuticals.  Thank you for reading.

Sunday, September 28, 2014

Eli Lilly

Eli Lilly, symbol (LLY) was known for being a central nervous system (CNS) powerhouse, until patent expiration and generic competition entered with lower priced equivalents.  Lilly's  history had a strong presence with the following blockbuster (CNS) drugs.
Cymbalta
Patent expired in 2013.  To treat major depressive disorder (MDD), general anxiety disorder, and fibromyalgia accounted for $5.0 billion worldwide annual sales for LLY.
Zyprexa
Patent expired in 2011.  To treat Schizophrenia and Bi-Polar.  Zyprexa worldwide sales peaked at $5.0 billion annually.
Prozac
Patent expired in 2001.  Prozac (depression) accounted for roughly one quarter of the companies revenues.

The Current list of (CNS) products include.

Straterra
Approved for Attention Deficit Disorder.  Patent expires November 2016.
Zyprexa Injectable
Approved for Schizophrenia.

Many larger capitalized companies with a focus on (CNS) are losing sales to patent expiration and have turned to acquisition to replenish their product lines.  Acadia Pharmaceuticals would be an ideal company for potential acquisition because of the safety profile and efficacy in trials. Acadia's Nuplazid (pimavanserin) is preparing to enter the marketplace in 2015 for Parkinson's Disease Psychosis, and has patent expiration until 2028. Thank you for reading.

No positions in Eli Lilly.

Friday, September 26, 2014

Intra-Cellular Therapies

Intra-Cellular Therapies (ITCI) is a small bio-phamaceutical company that is developing novel drugs for the treatment of diseases and disorders of the central nervous system (CNS).  This post will examine their pipeline and timeline of current or future trials.  The companies lead drug is ITI-007, which is a potent 5HT2A serotonin receptor antagonist.  ITI-007 in lower doses could be useful to treat agitation, aggression and sleep disturbances in diseases that include dementia, Alzheimer's disease, and autism while avoiding many of the side effects of more robust dopamine receptor antagonism.  In higher doses ITI-007 could be useful for treating the symptoms associated with Schizophrenia, Bi-Polar and major depression disorder (MDD).

Quick Facts:
29 million shares outstanding
425 million market cap
140 million in cash

Intellectual Property:
ITI-007 U.S. composition of matter to 2025

Future Trials for ITI-007  PANSS
Phase 3 (40 mg & 60 mg dose) trials for Schizophrenia patients who are having an acute or worsening of their psychosis.  These two (different dose) trials are scheduled to start in early 2015.

Phase 2 study results (60mg dose) achieved p = .017 on PANSS.

Phase 2 Sleep disturbance trial scheduled to run in 2015.

Bottom Line:  Intra-Cellular has a unique drug ITI-007 for patients with CNS disorders.  The company is a couple years away from proving out their drug in trials for Schizophrenia and sleep disorder patients.  The company may compete with Acadia in the area of sleep disturbance disorders among the elderly population.

No positions in Intra-Cellular.

Tuesday, September 23, 2014

Technical Look at ACAD

In between press releases, ACAD becomes highly correlated to the XBI Biotechnology Index, with extra beta above and beyond.  Below is a three day chart with the XBI and ACAD that shows a close correlation.
A daily chart below, has the stock still consolidating the recent months gains.  But there is a gap around the $24.00 area, that technically could get filled if the overall market puts in more than just the current pullback, as of today.  
Bottom Line:  ACAD has had a strong months worth of catalyst or positive press releases that has included the following.  

1)  EU strategy discussed during the second quarter conference call.
2)  Roche buyout of ITMN, had a positive effect on biotechnology in general.
3)  Breakthrough Therapy Designation granted from FDA.
4)  Positive comments made from CNBC.

For now, the movements in the stock are market related, outside of company positive news.  Thank you for reading.

Sunday, September 21, 2014

Lundbeck

When considering major players in the CNS (central nervous system) market, Lundbeck is a name that comes to mind.  The company's corporate office is located in Copenhagen, Denmark with locations worldwide.  This post will take a look at it's current top CNS products and pipeline of potential drugs in trials.

Alzheimer's
Ebixa (memantine) for moderate to advanced AD.  For memory and cognition.

Parkinson's Disease
Azilect  (rasagiline) to treat signs and symptoms of PD,

Schizophrenia
Abilify Maintena  Atypical anti-psychotic for the treatment of Schizophrenia.  Extensively used off-label for MDD (major depressive disorder), and Bi-Polar.

Current Trials:
Lu AE58054  as an adjunct to Donpezil.  For mild to moderate AD.
NCT01955161 ADAS
Ph 3 Results - 2015

Brexpiprazole  Agitation associated dementia of the Alzheimer's type.
NCT01862640 CMAI
NCT01922258
Ph 3 Results - 2017

Brexpiprazole  Many trials for MDD and Schizophrenia as adjunct or mono-therapy.

From the Lunbeck website, there is not an approved drug for either Parkinson's or Alzheimer's disease psychosis that is safe for the elderly unlike Nuplazid is deemed to be. Abilify is black boxed for use in the elderly population experiencing psychosis related to dementia.

Brexpiprazole is currently in a phase 3 trial for agitation associated with dementia of the Alzheimer's type.  Within that trial, listed under other measures, is the NPI-NH, and Psychosis Subscale Score. So there will be a readout for hallucinations and delusions along with the primary outcome measure of agitation.  Thank you for reading.

No positions in Lundbeck.

Wednesday, September 17, 2014

Acadia Pharmaceuticals: ($27.45)

The Federal Reserve released their statement at 2:00 p.m., and the result was a more accommodative (dovish) statement that the markets should take positively.  Acadia had an up / down day and closely correlated to the movements of the overall market.
The stock is consolidating around the $27.00 area after advancing higher from positive press releases the last month.  Volume has dropped off the past couple days, which I view as positive at these levels.

Bottom Line:  An accommodative Federal Reserve should aid higher risk-assets in the near term.  The addition of Europe, which has recently committed to a Quantitative Easing style program to start in October, could also be a positive for stocks.  This is option expiration week, so I expect more volatility than usual. Thank you for reading.

Tuesday, September 2, 2014

Acadia: "Breakthrough Therapy" Designation

Acadia Pharma announced today that the FDA has granted the company "Breakthrough Therapy" designation for it's lead drug Nuplazid (pimavanserin) for Parkinson's Disease Psychosis. Breakthrough therapy designation was created by the FDA to expedite the development and review of drugs that are meant to treat serious or life threatening conditions.
The weekly chart above has the stock breaking out to a new six month high. The stock gained (+11%) today.

Bottom Line:  What this means for investors of Acadia, is that the drug approval process for Nuplazid (pimavanserin), to treat Parkinson's Disease Psychosis, will get an expedited process from the FDA. Thank you for reading.

Monday, August 25, 2014

Acadia Pharmaceuticals: ($23.15)

Biotechnology stocks were strong today on the back of Roche's $8.3 billion buyout of InterMune announced Sunday evening.  InterMune has their drug pirfenidone for a deadly disease called pulmonary fibrosis.
From the chart above ACAD is up 14% in the month of August alone.  Biotech and the S&P 500 are also experiencing a strong month as well. Thank you for reading.  

We are long term investors of ACAD.

Saturday, August 16, 2014

Acadia Pharmaceuticals - Sleep Disturbance Study

During the second quarter conference call ACAD had mentioned that they are planning a "sleep disturbance" clinical trial for Parkinson's disease patients either in the 4th quarter of 2014 or first quarter 2015. This post will examine the potential market size for Parkinson's Disease patients who have sleep disturbances.
Sleep disturbances which include sleep fragmentation, day-time somnolence, sleep-disorder breathing, restless leg syndrome, nightmares and rapid eye-movement sleep behavior disorder, are estimated to occur in 64% of patients with PD according to this study, PD and Sleep Disorders...
So independent of patients with Parkinson's Disease Psychosis (PDP) and obviously there will be some overlap of the 30-40% who experience psychotic behavior, and up to 64% that experience "sleep disorders", out of the estimated one million in the U.S. with Parkinson's Disease could benefit from Pimavanserin. 
During the phase 3 trial that Acadia ran from 2010-2012 for Parkinson's Disease Psychosis patients, the company pulled some data that included sleep patterns among the treatment group that was given Pimavanserin.















Charted above is the sleep data using the SCOPA - sleep scale. Both nighttime sleep and daytime wakefulness was improved in the Pimavanserin treated group (blue line) compared to the control group (placebo) trial participants.  Data from another study the company completed Pimavanserin Sleep Study in 2006 with 45 healthy subjects to evaluate slow wave sleep (SWS) in a double blinded placebo study, found that the treatment group had positive results at the 5 mg and 20 mg level sustainable from day one and day 13 evaluation periods. These observations have led the company to pursue a sleep disturbance trial for this fragile group of patients.  Potentially if the trial proves to be effective similar to the previously run phase 3 trial, then the market for Pimavanserin could potentially grow approximately 24% to 34% to a total of 64% in the U.S. What is likely to occur if a trial is successful, is that the FDA could expand their label to include sleep disturbances in addition to PDP.   

Patients with Alzheimer's disease (AD) have similar sleep disturbances. According to this study Pharmacotherapies for sleep disturbances in Alzheimer's disease,  the authors found no significance in the drugs melatonin, or ramelteon for patients with Alzheimer's disease that experience sleep disturbances.  There was some evidence to support a low dose of trazodon (50mg), but larger trials were needed to reach a definitive conclusion.  An unmet market that Pimavanserin could potentially serve, in addition to Parkinson's patients with sleep disturbances.  There are approximately four times the number of AD patients compared to PD patients in the U.S.  The company is currently in a clinical phase 2 trial to test Pimavanserin for patients with Alzheimer's disease that have experienced psychosis (ADP).  Those results are not expected until mid to late 2015.  Within those results, and similar to the phase 3 study for PDP, should yield more data on sleep patterns for the treatment group in that trial. 

The company is doing a nice job of expanding their lead drug Pimavanserin beyond Parkinson's Disease Psychosis (PDP), but also within that population, sleep disturbance studies, and potentially Schizophrenia studies as a mono therapy or coupled with already available drugs. Thank you for reading.
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