Wednesday, July 23, 2014

Acadia Pharmaceuticals ($20.73)

Another day and another new all-time high for the S&P 500.  Biotech had an especially strong day today, lifting almost all stocks within that sector including ACAD.
Seen from the chart above, stocks broke out of the three week trading range under light volume. Another new closing high was achieved.  
The XBI index was higher by 9% today as one stock within the index was up substantially, providing a short covering lift for almost all other stocks within that sector.
ACAD moved higher today, primarily from the strength of the sector and market as a whole.  The stock has been a laggard on a comparative basis against the index it is in. There is not a catalyst for the stock in the near term. I rate the chart as neutral at best.  

Bottom Line:  A new high for the overall market, and an extremely strong day for the XBI Biotech Index, had a positive effect on ACAD moving higher today. Thank you for stopping by.

Monday, July 21, 2014

Acadia Pharmaceuticals: ($20.31)

Stocks exhibited the dog days of summer low volume today.  The market gaped down in the morning and spent the rest of the day recovering the losses on below average volume.
The sixty minute chart above has been trading in a 2% range now for about three weeks.  Although the choppiness has been indecisive, this tight range over a period of time suggests that stocks are consolidating the year to date move higher, which can be seen as positive.
The XBI biotechnology index and ACAD have been slowly recouping the losses from Tuesday the 15th, when the Federal Reserve came out with the biotechnology sector overvalued statement that sent small cap biotechnology stocks lower.  Acadia has been a small out performer over the last two days against the index.
ACAD was essentially flat on an extremely low volume day.  The chart is still somewhat oversold.  The company is working on the submission of their NDA (new drug application) for Parkinson's Psychosis which is scheduled to be submitted by years end.  

Bottom Line:  Not much to gather from a day like today.  The S&P 500 has been consolidating within a tight 2% range now for three weeks, which is positive, despite the gaps up or down opens the index has been displaying. XBI and ACAD have been slowly recovering from the comments made by Federal Reserve Yellen one week ago regarding overvalued biotechnology stocks.  I give this day a positive for the sector and ACAD, as far as trading action is concerned.  Tomorrow is another day. Thank you for stopping by.

Friday, July 18, 2014

Acadia Pharmaceuticals: ($20.25)

Yesterday, ACAD and the indexes were oversold, and today we got a bounce higher from those oversold levels.
ACAD made it back to a support area on the chart, but volume was below yesterday's sell-off volume, and the 20 day exponential moving average.  So, on a comparative basis, a weak day compared to yesterday's sell-off. 
The stock has been an under performer against the index that it has closely tracked (XBI) over the past four sessions.
S&P 500, sixty minute chart above illustrates the choppiness and indecision the market is displaying. Still the market has not left the two plus week channel that I have illustrated above, so still a day that just represents oscillation within the channel. This type of market action from one day declines, to one day recoveries are more common at market tops than they are at market bottoms.

Bottom Line:  Where the markets, and ACAD go from here in the near term is a tough call. The charts are neutral, and today's action was what I had anticipated....an oversold bounce higher day for ACAD, XBI and the SPY. ACAD had a recovery day today, although the volume was under it's average and below yesterday's sell-off volume. The stock has been trailing the index it has been correlated with (XBI), the past four sessions.  Thank you for reading.

Wednesday, July 16, 2014

Acadia Pharmaceutical: ($20.25)

Another risk-off hangover day for biotech and ACAD alike, one day after the Federal Reserve Yellen said valuations were stretched in the biotech sector. Usual charts below.
We hit my $20.20 area price target that I wrote about last week and did get somewhat of a bounce off the low of the day.  Next support is at the $17.80 price area.  I think it would take a lot to get ACAD there, as far as general market weakness is concerned.  
ACAD tracks the XBI index closely, so the overall weakness in biotech is also dragging the stock lower by association.
The S&P index 60 minute chart above, has been extremely choppy lately with gap open higher and lower over the past couple of weeks.  The index is close to breaking out to new highs again.  Volume has been tepid on the rise.  We added some shares of ACAD again on the weakness today, as the stock is heavily oversold, as is the biotechnology index.  Thank you for reading.  

Monday, July 14, 2014

Acadia Pharmaceutical: ($22.09)

Acadia under performed today as the overall market climbed higher and the biotech index had a small gain.
ACAD closed slightly down, and right at the pivot on the daily chart.  The chart is neutral as present, but susceptible to any overall market weakness in the near term.  

The XBI biotechnology index ( 2 minute day ) out performed ACAD today on a slight basis.  Volume on both was below average.
The SPY index has a very top heavy look to it in the 60 minute chart above, as there are gaps up and down, typical of market topping patterns. The market keeps climbing and is now close to new highs again.  The biotechnology index is not keeping pace nor is ACAD at the moment.  I continue to think we can buy shares cheaper in the near term.  Thank you for reading. 

Friday, July 11, 2014

ACAD: ($22.30)

They say, a rising tide lifts all boats.  I think that applies to ACAD today, as there was some strength in the biotech sector and the overall market as a whole.
The stock closed right around the pivot on the daily chart above.  I view the chart as neutral at this time. I think a drop to around $20.00 is a good possibility in the near term on any overall market weakness.
ACAD broke away from the biotech index XBI mid morning, and out performed the rest of the day from the chart above.
The S&P 500 finished up on light volume, and the 60 minute chart above is neutral with a short term down trending pattern.  Today's action does not change any chart trends from an intermediate perspective.  We took advantage and bought some shares of ACAD while it was lower during the week.  Thank you for reading.

Monday, July 7, 2014

ACAD: ($23.42)

Even though we are long term ACAD investors, it is nice to see an out performance on a comparison basis against the XBI, small cap biotechnology index in the near term.  Below is a two day, two minute chart.
Nice out performance during the last two trading sessions against the index with similar market cap stocks.  XBI down -3%, with ACAD flat.  We may experience more broad market selling in the near term, so it will be interesting to see if this out performance continues to impress.

Sunday, July 6, 2014

ACAD: ($23.64)

ACAD is a major holding in portfolios.  Below is a daily chart with fibonacci retracement attached to it.
From the chart above, ACAD has retraced all the way to the 50% Fibonacci line.  Typically this is a healthy retrace from an intermediate bottom.  A breakout and challenge for new all-time highs can be made by eclipsing the 61% fib line at $25.69.  Fundamentally the stock is solid.  The company has just completed pre-nda meetings with the FDA, and they said they went very well, and plan on submitting their new drug application by years end.  I suspect the FDA could give ACAD priority review which could reduce the amount of time for final approval by about four months and put the approval date at mid 2015.
Bottom Line:  Acadia Pharmaceuticals will be a successful company once Pimavanserin gets approved for Parkinson's Psychosis.  The company has patent exclusivity until 2028 with the possibility of patent restoration to 2033. We hold shares of ACAD.  Thank you for reading.

Saturday, June 28, 2014

SNSS: Sunesis Pharmaceuticals ($6.08)

We have been positive on MEI Pharma (MEIP).  Sunesis is a competitor to MEIP in the area of AML and MDS.  This post examines the current trials with the drug Vosaroxin that Sunesis is currently running, that may compete directly with MEI Pharma.
Phase 3 Trial:
Study of Vosaroxin or placebo in combinatin with Cytarabine in patiens with first relapsed or refractory Acute Myeloid Leukemia (AML).  The trial is also known as Valor and results should be released any day.
Phase I/II Trial:
Study of Vosaroxin IV and Decitabine IV combination in older patients with Acute Myeloid Leukemia and high-risk Myelodysplastic Syndrome. This is primarily a dosing trial to find maximum dose limiting toxicity.  This trial competes head to head with MEI's front line AML study for elderly patients currently in a phase 2 trial.
Phase I/II Trial:
Vosaroxin alone for intermediate-2 or high-risk MDS after failure with hypomethylating agent based therapy. This is another trial that will eventually compete with MEIP currently running a phase II MDS trial for patients that had previously failed hypomethylating therapy for MDS intermediate-2 or high risk.  
Bottom Line:
The two phase I/II trials that Sunesis has running will compete with MEI's drug Pracinostat. One differentiating factor is that the Sunesis drug Vosaroxin is currently delivered as an IV infusion, as opposed to Pracinostat which is an oral that is taken three days a week, Monday, Wednesday and Friday.  MEI Pharma is further along in the trials, as both phase II trials should yield results by the end of 2014, and the Sunesis trials are in early phase I/II designed to confirm maximum tolerated dosing limitations.

Disclosure:  We currently hold ACAD, and MEIP as investments.

Saturday, June 21, 2014

Elliott Wave Principle

Elliott Wave is a form of technical analysis that attempts to analyze market cycles and forecast trends. If you can identify repeating patterns in prices, and figure that pattern in the context of the market today, you may be able to manage risk more effectively in the future.  In general, you may be able to identify the highest probable move with the least risk.  Below is a chart with Elliott Wave applied.
From the chart above, we have an upside target of $202.00 on the S&P 500, and a 3rd - 4th quarter to arrive at that upside price.  So we are just around 3% from that target price.  Once reached, primary wave three will be complete, and corrective primary wave four will be in play.  A -15% minimum correction wave four is forecasted.

Bottom Line:  Using technical analysis helps us remain objective while managing risk.  Elliott Wave attempts to identify the highest probable move with the least risk based on cycle counts and time patterns.  Thank you for reading.

Wednesday, May 21, 2014

MEIP: MEI Pharma ($5.94)

MEI Pharmaceuticals has the potential to become best in class as an oral HDAC inhibitor (histone deacetylases) for MDS - Myelodysplastic Syndrome and AML - Acute Myeloid Leukemia.  The company recently presented at two conferences, the Bank of America last week and UBS just yesterday. As usual CEO Dr. Gold did a good job of presenting the story what their lead drug Pracinostat has shown to date, and the best in class HDAC inhibitor it could potentially be.  This post will compare what the best standard of care (Vidaza) has already achieved in Myelodysplastic Syndrome (MDS), and what current competitor's (Vorinostat/Vidaza combo), (Mocetinostat/Vidaza combo) have accomplished with similar patients that MEI is targeting in their phase 2 trial for patients with intermediate-2 to high risk MDS.  These comparisons can serve as benchmarks when MEI presents data from their trials.

Current Standard of Care - Vidaza:
172 Patients Various Trials.
Vidaza 75mg.
Higher Risk MDS.
ORR (CR+PR) of 15.7%
CR of 5.6%  
(From Vidaza Label)
Median overall survival of 24.5 months.
Vidaza is FDA approved for all subtypes of MDS.
Celgene Vidaza US patent expired in 2012.

Mocetinostat with Vidaza:
Phase 2, 22 Patients.  (Manero Trial)
Mocetinostat 90-110mg 3x/wk and Vidaza 75mg.
High Risk MDS.
ORR (CR+CRi+PR+HI) 64%
ORR (CR+CRi+HI) 55%
ORR (CR+CRi+PR) 59%
ORR (CR+PR) of 18%
CR (CR+CRi) of 50%
CR of 9%
Median overall survival was 12.4 months.
The above results are based on a subset of 22 patients with characteristics for a planned registration phase 3 trial second half of 2014.

Vorinostat with Vidaza:
Phase 2, 40 Patients.  (Silverman Trial)
Vorinostat twice daily and Vidaza 75mg.
Intermediate-1 (45%), Intermediate-2 (30%), High-Risk (33%) MDS.
ORR (CR+CRi+PR+HI) 75%
ORR (CR+CRi+HI) 58%
ORR (CR+CRi+PR) 48%
ORR (CR+PR) 38%
CR (CR+CRi) of 35%
CR of 25%
Median overall survival was 27.6 months overall trial, 37 months for (300mg / twice daily + Vidaza 75mg). Merck will lose Vorinostat patent for CTCL in July of 2015.

Pracinostat with Vidaza:
Phase 1, 10 Patients.  (Manero Trial)
Pracinostat 60 mg 3x/wk and Vidaza 75mg.
Intermediate Risk-2, or High Risk.
ORR (CR+CRi+PR) of 90%
ORR (CR+PR) of 70%
CR (CR+CRi) of 80%
CR of 60%

50% achieved a complete cytogenetic response and proceeded to stem cell therapy.

Pracinostat with Vidaza:  (Manero Trial)
Clinical Trials
Phase 2, 100 Patients in Progress.
Pracinostat 60 mg 3x/wk and Vidaza 75mg.
Intermediate Risk-2, or High Risk.
ORR (CR+PR)  ______
CR of  ______
OS of ______

Potential Market Statistics:
Estimated 101,000 MDS Patients in the US and EU.
Estimated 25,000 are Int-2 and High Risk MDS Patients in the US and EU.
2013 WW Sales of MDS/AML Products $1.4 Billion.
Vidaza and Dacogen:  560M + in U.S. 2012 Sales.
Celgene reported $800 million Vidaza w/w sales in 2012, lost U.S. patent protection in 2011.
Celgene holds patent exclusivity in the EU for Vidaza until December 2018.

Sunday, May 18, 2014

ACAD: ($19.05)

We currently hold ACAD as a long term investment.  The ACAD daily chart with comment is below.
Acadia Pharmaceuticals (ACAD) has been a holding since early 2013.  The company does not have any significant catalyst near term and the chart definitely reflects that as it has been trading in a range of the high teens for the last two months. We should get more clarity on issues with the new drug application (NDA) for Pimavanserin for Parkinson's disease psychosis (PDP) over the summer months, and the European approval process near the end of the year.  The phase 2 Alzheimer's trial will not yield results until 2015.

Bottom Line:  Even promising companies like ACAD with drugs created for unmet medical needs go through periods of stagnation reflected by the chart shown above.  I expect more interest later in the year as significant catalyst's approach.  Thank you for reading.  

Thursday, May 8, 2014

Simplifying the Markets

The markets can be simplified down to a few different variables over the past few years.  QE also known as quantitative easing = risk on, no QE = risk off. It is that simple. Currently we are about half way through the tapering process, or elimination of QE.  At the peak of QE the Federal Reserve was providing $85 billion per month.  At present that amount has been tapered down to $45 billion.  How will the markets react in the absence of QE?  Let's go back a few years to see what kind of corrections were exhibited at different phases of QE.  Below is a 2012 chart of the S&P 500 at the time when QE was running $45 billion per month.
There happened to be two corrections, one was -10.6%, and the other was -9.1% during the year of 2012 while there was $45 billion each and every month available to aid the economy.  The chart below fast forwards to 2013 to see what transpired with QE at $85 billion per month (almost double from 2012) granted from the Federal Reserve to aid the economy.
The corrections/pullbacks were small in percentage and duration with the average pullback around -4.9% and the steepest being -7.3%.  In 2013 it was risk-on, which meant every dip was bought that led to new highs in the market, and the high beta sectors benefited from the excess $85 bllion per month liquidity compared to 2012's $45 billion per month.

Bottom Line:  If added liquidity in the form of quantitative easing was the fuel for the markets in 2013, the lack of additional liquidity in 2014 due to the tapering off of approximately $10 billion per month may have the reverse effect.  Due to the lack of stimulus, steeper and longer duration corrections similar to 2012  (-10.6% and -9.3%) could be the new norm in the future. Thank you for reading.

Saturday, April 26, 2014

MEIP: MEI Pharma ($8.10)

MEI Pharmaceuticals Inc., a development-stage oncology company, focuses on the clinical development for the treatment of cancer.  The companies lead drug Pracinostat, an orally available inhibitor is currently in phase 2 trials for the treatment of myelodysplastic syndrome (MDS), and acute myeloid leukemia (AML).
Financial Statistics:
$59.8 million cash
Debt - None
27.9 million fully diluted shares outstanding 
4.9 million shares in warrants, strike price $3.50
223 million market cap
Intellectual Property:
Pracinostat - Composition of matter to 2028, methods of use 2025
ME-344 - Composition of matter and methods of use to 2025
PWT 143 - Composition of matter 2031 and methods of use 2032
Market Opportunity Potential:
$1,491 Billion market in the U.S.
Safety:
Tested in 200+ patients in multiple phase 1 and phase 2 clinical trials.
Readily manageable side effects consistent with current drugs of this class.
Timeline Catalyst:  
Pracinostat:  Front Line MDS study Intermediate-2 and High-Risk Patients.
-Expect to complete enrollment in Q3 2014, and unblind study in Q1, 2015.
Pracinostat:  Refractory MDS Study - Failure after initial HMA Therapy.
-Preliminary data expected at Ash December, 2014. 
Pracinostat:  Front Line AML study for elderly patients not suited for intensive chemotherapy.
-Preliminary data expected at Ash December, 2014.
Below is a daily chart of MEIP.

Bottom Line:  By the end of 2014 we should have a good grasp of how Pracinostat has been performing in three phase 2 clinical trials for MDS and AML.  Their lead drug  is an oral (as opposed to IV) therapy that has been well tolerated in over 200 + patients to date.  There is an unmet need for a well tolerated solution for the elderly population who are victims of MDS or AML.  Pracinostat is well tolerated, orally available, and MEI Pharma holds worldwide exclusivity on the drug.  Thank you for reading.  

Friday, April 11, 2014

Assessing the Recent Selloff

We're in the middle of a market pullback or correction.  The S&P is now down -4.3% from the high just last week.  A technical picture of where we stand today is below with comments.
Since 2013 the 140 day exponential moving (purple line) average has been good support for the S&P 500 index ETF SPY.  Also note that the RSI has hit the 30 reading or close on the prior pullbacks we have experienced.  To summarize this chart.  We are getting close to a moving average trend line and a 30 low reading on the RSI (relative strength index).  Both these areas have provided market pullback support in the past.
During the most recent pullback in February, we had hit the fibonacci 50% retracement level before reversing higher, and this current pullback (chart above) that we are experiencing is sitting right on the 50% retrace level, which is a typical retrace for an index prior to reversing higher.
The above chart illustrates what has currently occurred since we hit an all time high of 189.70 just recently. We have pulled back -4.3%.  I am targeting a -6% pullback which would run very similar to prior sell offs and put the index at support areas, from the first chart above.

Bottom Line:  Most of my technical indicators are signaling that we are getting close to at least a short term bottom on this current sell off.  We are close to the first chart above's support line (140 exponential moving average), we hit the 50% retrace on the middle fibonacci chart, and we are currently in the range of prior pullbacks experienced over the past year (third chart) of -4% to -7% range.  There has been no technical damage done to the intermediate to longer term time frame chart perspective for the S&P 500 from where we currently stand today.  Thank you for reading.  

Contact Information:  portfoliomgt1@gmail.com    586-431-8000