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 billion in annual sales for LLY.
Zyprexa
Patent expired in 2011.  To treat Schizophrenia and Bi-Polar.  Zyprexa sales exceeded $3 billion annually.
Prozac
Patent expired in 2001.  Prozac (depression) accounted for roughly one quarter of the companies revenues.

Current list of (CNS) products include.

Straterra
Approved for Attention Deficit Disorder.  Patent expires November 2016.
Zyprexa Injectable
Approved for Schizophrenia in 1996.

Many of the larger capitalization 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 many of these companies to seek out for potential acquisition.  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 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 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 Pharmaceutical: ($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, trazodon, or ramelteon for patients with Alzheimer's disease that experience sleep disturbances. So, currently there does not seem to be a safe, and effective drug for this fragile group of patients either. 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.

Tuesday, August 5, 2014

ACAD: Second Quarter C.C.

The Acadia 2nd quarter conference call went extremely well.  The company still targets the end of the year to file the NDA for PDP. What's even more important is they plan to file an application in the EU for Parkinson's Disease Psychosis six to nine months after filing the NDA with the FDA here in the U.S.  The EU filing has been an overhang on the stock for some time now.  If the company had to run another Phase 3 trial in the EU for PDP, it could take up to another three years and a huge cash drain for that trial.

Future Trials:
Sleep disturbance trial (2014-2015) for Parkinson's patients.  Trial is currently being designed.
Schizophrenia (2015) as Mono-therapy for maintenance stage and symptom control.  Patients cannot tolerate staying on the current approved drugs for an extended period of time.

Safety Stats:
250 patients have been on Pima for one year or longer, 100 patients at least two years or longer, with the longest single patient exposure exceeding eight years.

Bottom Line:  The new information learned today from the company, was related to the potential filing of a marketing authorization application (MAA)  in the EU 6-9 months after filing the new drug application with the FDA.  In other words, they are using the NDA as a fore runner for filing the MAA in the EU. The company is in a very strategic position with patent expiration until 2028, and the company holds worldwide rights to Pimavanserin.  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.

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
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