Acadia Pharmaceutical - "Anecdotal Reports"

Is what Acadia Pharmaceutical CEO Uli Hacksell said he was receiving from the current phase 2 ADP (Alzheimer's Disease Psychosis) trial, during the recent Oppenheimer Healthcare conference on December 10th. He mentioned in addition to the anti-psychotic and sleep benefit from Pimavanserin, there were other potential benefits that Pimavanserin could provide for Alzheimer's patients; such as agitation, anxiety, aggression, and cognition.  Regarding cognition, the CEO believes that Pimavanserin may not increase cognitive loss at the same rate that current Atypical Antipsychotics do.
There has been much mentioned over time about cognition from the CEO and others at Acadia as it pertains to Alzheimer's patients.  The current standard of care involves a group known as cholinergic drugs. The list of current cholinergic drugs approved for cognition/maintenance in Alzheimer's patients are listed below.

Aricept (donepezil) - Approved for all stages of Alzheimer's.
Exelon - Approved to treat mild to moderate Alzheimer's.
Razadyn - Approved to treat mild to moderate Alzheimer's.
Namenda - Approved for moderate to severe Alzheimer's.

Acadia stated that Pimavanserin used with cholinergic drugs has been shown to increase cognition in pre-clinical animal trials.  If it proves out in the current ADP trial, that Alzheimers patients taking Pimavanserin with their cholinergic drug, do not lose cognition at the rate seen with current antipsychotics, then it will be another improvement, alongside other safety factors that Pimavanserin has shown.  The read-out from the ADP trial will be around the fourth quarter of 2015. Thank you for reading.

Acadia Pharma 2015 Event Sheet

Here are some interesting events, with timelines to remember for 2015.

1. Filing of the NDA in the first quarter of 2015.
2. 60 days for the FDA to accept the application.
3. Upon potential acceptance, FDA could also grant priority review. 
4. With priority review, six months PDUFA date, without, 10 months.
5. Sleep disturbance trial for PDP patients first half of 2015.
6. EU filing 6- 9 months post FDA filing, so around 3rd quarter. 
7. Potential top line ADP in fourth quarter of 2015 or around end of 2015. 
8. Schizophrenia maintenance trial to commence 2nd half of 2015. 
9. More information on Pima for Autism 2015.

A Technical Look at Acadia Pharma ($32.53)

Some charts of Acadia as the stock is now making new highs on a weekly basis.

Above daily chart is a nice looking breakout to new highs.  Even though overbought somewhat on the daily, the chart can stay overbought for much longer on a technical basis.  

On a comparative basis, ACAD has outperformed the XBI biotech sector and the S&P 500 the last three days, as the market has sold off.  Thank you for reading. 

MEI Pharma: ASH and Investor Conference Update

MEIP just finished with their annual investor / analyst conference this evening and ASH on Saturday. There are a few issues at hand that have left me to believe that Pracinostat / Vidaza combination for Newly Diagnosed Elderly Patients with AML, may not be the combo that achieves a significant improvement over existing therapy for these patients.  At least as far as overall survival may be concerned.  The company has released positive interim CR (complete remission) data throughout the phase 2 AML trial.  What we did not hear, up until the investor conference is below.

1. Six patients out of 41 had to have dose reduction.  First Vidaza then Pracinostat reduced, with the majority being Vidaza reduced out of six.
2. The company is planning a 450 patient phase 3 AML trial in June 2015, with a planned primary end point being (CR) or complete response, for accelerated approval, and overall survival (OS) follow-up data for full approval.  But the company said that discussions with the FDA is still ongoing, and will have to see if the CR is a valid primary endpoint for the filing of an NDA.
3. The age group for this AML phase 3 trial in elderly population is planning on being lowered from greater or equal to 65 years, down to greater or equal to 60 years of age.

The reason that the company is planning a phase 3 trial using CR as the endpoint could be because of the lowering of dose in the current trial. Patients may be exhibiting greater side effects than initially thought.  If that is the case, the lowering of the dose could impact overall survival, and may be the reason that they are planning a phase 3 trial using CR as the primary endpoint rather than OS.  There has to be a trade off between receiving enough of the drug for efficacy and the safety profile for the elderly population.  In this case, with six patients, the lowering of the dosage of Vidaza to keep patients on therapy was the step taken.  The inclusion criteria for the planned phase 3 trial of 60 years of age rather than the current trial design of 65 years, is another reason to believe that the combination may be too adverse for patients 65 years and older, and that an extra five year reduction could make the drug combination more tolerable.

MEIP: Completes Enrollment Front Line AML

Today MEI Pharma announced that enrollment for their phase 2 trial for patients who are elderly, newly diagnosed with AML (acute myeloid leukemia) is complete.  This trial enrolled 50 patients extremely fast since August 1st, when they only had 14 total enrollments.  Since then, the company announced that they achieved 8 (CR) complete remissions, or 57% in November with no progressions...

Avanir Pharmaceuticals: Buy Out

A busy day as one of the stocks we hold received a buyout offer from Otsuka Pharmaceuticals (the maker of Abilify) for $3.54 billion or $17.00 per share, in a stock transaction. My initial impression is that Otsuka received a good deal, as they will get a nice pipeline including indications such as agitation / aggression in Alzheimer's patients (phase 3 2015), along with Major Depressive Disorder or (MDD), which is in the early stages of a phase 2 trial.  AVNR patents extend out to 2030.  

Acadia Pharma: New High ($29.53)

Acadia has closed at a new all-time high on a inter-weekly basis.  The stock finished the day strong, on above average volume.  Below is a weekly chart of ACAD.

Bottom Line:  Even though the company announced a short delay for filing their new drug application for Nuplazid, the stock held up well, and has actually advanced higher.  Last week, the analyst house Cowen Group, provided coverage on ACAD with a buy rating, and a $46.00 price target on the stock. Perhaps that, and a strong biotech sector has contributed to the new high.  Thank you for reading.  We currently hold ACAD, and AVNR.  

MEI Pharma: AML Trial Update ($6.90)

Trial updates are coming in quite fast now, as companies seeing positive results want to bring that information to the public as soon as possible. Many are scheduled to appear at the ASH Conference on December 6th. MEI Pharma just updated investors on their AML phase 2 trial using Pracinostat (an HDACi) in combination with Vidaza for elderly newly diagnosed patients...

MDS & AML: Assessing the Landscape

There has not been an effective, and safe, FDA approved drug for MDS (myelodysplastic syndrome) or AML (acute myeloid leukemia) since Vidaza in 2004 and Dacogen in 2006.  This post will examine the competitive landscape of companies with the hope of meeting the unmet need for MDS and AML patients...

ACAD: Third Quarter Conference Call ($28.21)

There was good and somewhat bad news that ACAD announced today. First the somewhat bad news. The company is delaying the filing of their new drug application with the FDA to the first quarter of 2015, from previously the end of 2014.  They stressed that the delay is not an FDA issue, but more an internal issue of gathering all the pieces, for a well planned filing.  So the company is losing about three months by delaying this filing, not a big picture game changer...

The new information that we have not heard before, was the marketing research the company has been working on over the last year.  The research is below.

• 11,000 U.S. PDP treating physicians, mostly Neurologist
• 1 million Parkinson's Disease patients
• 400,000 thousand patients with PDP
• 50% have disruptive disturbances, (think sleep, or agitation/aggression (my notes)
• Reimbursement Payee is positive on the drug, (commercial, medicaid)
• Pricing of Nuplazid similar to Abilify 20 mg at $13,000 / Wholesale Acquisition Cost (WAC) annually.

 Thank you for reading.

MEI Pharma: ($7.87)

MEI Pharma (MEIP), updated investors this morning on the phase 2 trial of Pracinostat / Vidaza combo for elderly patients with AML.  The trial is about 50% complete, with a total of 14 patients currently evaluated.  The update is positive with (8) or 57% of AML patients achieving a CR + CRi response...

Japan Goes All-In With Quantitative Easing

This is certainly worth writing about, and is important for equity investors worldwide. Just 48 hours after the U.S. Federal Reserve concluded their QE (quantitative easing) program after six years, Japan announced they are increasing their QE program to $80 trillion Yen from $70 trillion, or to total $720 billion per year in dollar, which would amount to approximately $3 trillion per year total if applied to a US scale GDP...

World Without Quantitative Easing (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...

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.

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.

Contact:  586-431-8000

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.

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.

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-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:
JAMA Phase 2 Agitation Alzheimer's
Primary endpoint .001 on the agitation/aggression domain score of the NPI 
Stage 1 (baseline to week 5) .001
Stage 2 (week 5 to week 10 change) .02 
Cornell Scale for Depression in Dementia, 10 week  = .03

AVP-786 Adjunct Therapy Major Depressive Disorder
NCT02153502
Phase 2 - Results 2016

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.  The recent top line results look very promising for AVP-923 in Alzheimer's patients who are experiencing agitation / aggression.  AVP-786 holds promise for CNS indications and it has patent out to 2030 U.S. Thank you for reading.                       
 

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.

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.

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.

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.
 

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
Ph 2 results - 90 mg achieved .004 at 24 weeks.

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

Brexpiprazole  Many trials for (MDD) Major Depressive Disorder 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.
 

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.

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.  

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.

ACAD: Second Quarter Conference Call ($20.77)

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.

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:  THIS TRIAL FAILED TO MEET THE END POINT
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:  THIS IS THE ONLY ACTIVE 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:  THIS TRIAL HAS NOT PROGRESSED
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.

Contact:  586-431-8000

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.

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:
Vidaza Intermediate - High Risk MDS
CR = 17%
PR = 12%
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, N=33.  (Silverman Trial)
Vorinostat 300 mg twice daily and Vidaza 75mg.
Intermediate-1 (23%), Intermediate-2 (31%), High-Risk (31%) MDS.
ORR (CR+CRi+HI) 73%
CR (CR+CRi) of 42%
CR of 30%
Median overall survival was 37 months for (300mg / twice daily + Vidaza 75mg).

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.

Quantitative Easing 2012-2013

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.

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.  

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.  

Investor Complacency

The greatest danger to investors is complacency.  It is usually when investors are most complacent that they are blind sided when a real market correction takes hold and their portfolios take a hit.  I am using the word complacent because that is exactly the sentiment that the majority feel about the markets at this time as only 17.5% have a bearish bias according to Investor Intelligence Survey Percent Bears.
Since 2012, the largest correction the markets have experienced has been a -10.4% move lower in the S&P 500, and the largest pullback since 2013 has only been -7.3%.  Each pullback has the Federal Reserve assuring investors that more Quantitative Easing (QE) tools are available at their disposal.  The chart below shows the market pullbacks since 2012 and the amount of QE that was being issued during that time.

Notice that in 2012 when we were running single QE of $45 billion per month the corrections were -10.4% and -9.1%.  In 2013 when the fed increased the stimulus package and was running double QE, or $85 billion per month compared to $45 billion per month in 2012, the pullbacks only averaged around -5%.  Is there a correlation between the extent a market pulls back and the amount of QE that is being issued at that time?  Or is it just a matter of investors feeling assured that the Federal Reserve has their backs, and that buying the market dips regardless was the plan.

So, fast forward to the present.  The QE has been tapered down from the peak of $85 billion per month in December of 2013, to currently $55 billion starting in April. Essentially it's QE in reverse.  Below is a chart showing just how far down a market correction of say, -15% to -20% could take the market to.

The chart above only shows the maximum correction of up to -20% that I chose to display, which historically is a healthy market correction, but we potentially could expect something more severe than that, or even a bear market, which is more than -20%.  With readings so complacent, (per the Investors Intelligence Survey Bears of only 17.5% being bearish) are investor portfolios positioned for the possibility of a market correction of up to -20%? Tough question to answer.   

ACAD: Acadia Pharmaceuticals ($28.19)

After the close, Acadia Pharmaceuticals announced the planned secondary raising of $150 million by selling 5.3 million shares. The timing is excellent, as the stock is just off it's all time high and dilution will be minimal.

3-6-14:  The offering was oversubscribed so the end result is that the company is selling 6.4 million shares at $28.50 instead of the original 5.3 million share capital raise.  The underwriters also have the right to acquire .96 million shares in the next 30 days.  Baker Brothers Advisers bought $15 million worth of shares or 526 thousand shares, 8% of the offering.

Bottom Line:  Good move by management to raise cash while the stock is near all time highs.  The company should exit 2014 with a minimum of $290 million in cash for commercialization and future trials.  Thank you for reading. We currently hold shares of ACAD.

ACAD: Fourth Quarter Conference Call ($28.30)

Acadia held their 4th quarter conference call on Thursday after hours.  A brief of what I found interesting is below.

• The company keyed on the potential for Pimavanserin to be used for schizophrenia patients (in addition to Parkinson's and Alzheimer's patients), both as an add to with a low dose of Resperidone, and as a single therapy for a younger demographic patient.  The company expects to share new information regarding a schizophrenia trial later in 2014.
• The side effects induced by the atypical agents for schizophrenic patients may include weight gain, non-insulin dependent (type II) diabetes, cardiovascular side effects, sleep disturbances, and motor disturbances. The company believes that these side effects generally arise either from non-essential receptor interactions or from excessive dopamine blockade.
• In the released 10-K, it states "Parkinson's disease psychosis is a debilitating disease that occurs up to 60% of patients with Parkinson's disease."   
• The company believes that psychosis from Alzheimer's disease occurs in approximately 25%-50% of patients.
• The company has hired 14 new employees for the commercial launch of Pimavanserin, which I believe could occur in the first quarter of 2015.
• The company is pleased with all the pre-filing testing requirements that has occurred to date, and plans on meeting with the FDA for pre-NDA direction in the spring.

Bottom Line:  The highlight of ACAD's fourth quarter conference call pertains to the positive comments regarding Pimavanserin for schizophrenia patients and the two potential paths for trials they can focus on for this indication in the future. Also, the company is pleased with all required NDA filing testing to date, and will meet with the FDA in the spring. It was a solid conference call from Acadia's management again.  Thanks for reading.

ACAD: Acadia Pharmaceuticals ($28.84)

ACAD announced that their 4th quarter conference call will be held on Thursday February 27th at 4:00 p.m. The stock had a strong week gaining +20.52% and has moved up to prior resistance at the $29.00 area on heavy volume.

Bottom Line:  Looking forward to ACAD's 4th quarter conference call on Thursday, and will be listening for any new information regarding timelines related to the FDA process, and any update on the ongoing Alzheimer's phase 2 trial.  We are long term investors of ACAD.

IDRA: Idera Pharmaceuticals ($6.00)

IDRA will be presenting at the RBC Capital Markets' Global Healthcare Conference on Tuesday the 25th at 8:00 a.m.  IDRA stock had a solid week gaining +36%, and has broke above prior resistance on above average volume.

Bottom Line:  IDRA has almost doubled from the point we purchased the stock in the low three area. The company plans to disclose their phase 2 psoriasis trial results by the end of the first quarter which could be a stock moving event.  We continue to hold shares of IDRA.

Contact: portfoliomgt1@gmail.com 

IDRA: Idera Pharmaceuticals ($4.64)

Idera Pharmaceuticals became a new holding in December when we started buying the stock here IDRA: $3.04, and traded in /out, then back in using volatility to our advantage to buy shares back. Since then, the stock has advanced nicely to $4.64 with the addition of new key employees.  The special thing about the new personnel is that they have prior ties while serving at Genzyme, an extremely successful company that was purchased by Sanofi for $20 billion dollars.  On January 9th, 2014, two new key people were hired by IDRA.  Lou Brenner MD, has joined as senior vice president and chief medical officer, and has experience with advancing clinical trials with previous companies.  Also, Dr. Mark Goldberg has been appointed as a new board member. Previously, while at Genzyme he played a key role in the development of four successful orphan therapies. Dr. Goldberg is a board-certified medical oncologist and hematologist and has published more than 50 papers.  So the list of employees that are currently at IDRA with prior experience working together at some point at Genzyme consist of the following:

CFO: Louise Arcudi
Chairman of Board:  James Geraghty
Board Member:  Mark Goldberg
Chief Medical Officer:  Lou Brenner

Near Term Catalyst:

• 16th annual BIO CEO & Investor Conference 2-10-14.
• Phase 2 top line results IMO-8400 plaque psoriasis, first quarter.
• Phase 2 top line results IMO-8400 plaque psoriasis dose escalation .60 mg. second quarter.

Bottom Line:  Idera Pharmaceuticals is making progress behind the scenes with the addition of key personnel that have prior experience growing an emerging biotechnology company while at Genzyme.  Near term catalyst could move the stock higher in the coming weeks.  Thank you for reading.

Contact: portfoliomgt1@gmail.com

Perspective On The Recent Selloff

The current correction is -3.14% from the all time highs.  So, is this the beginning of a bear market or just the typical (-4% to -7%) pullback that we have seen a few times throughout 2013 that has led to new highs shortly after?

Above is a weekly chart which shows all the pullbacks in 2013 and the support that the 25 EMA (exponential moving average) has provided.  So, at the very least, I am expecting the market to fall to this area before reversing back higher.  A clean break and close lower of this indicator, then I think we are looking at a correction of up to -10% potentially.  

Bottom Line:  Next week will be a very important week for market direction. We have a two day FOMC meeting mid week to see if there will be further liquidity taper, as well as more earnings reports to ponder. Thank you for reading.

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