2011 First Quarter Plays

[Slow Eddie]

Yeah, something was definitely strange today. Everything on my watch list was up 2-3-5 percent or so.... except for ARNA. A sea of green and 2 reds... SOMX (so sad) and ARNA. I'm already in with options for theARNA panel, but I'm still hoping we can at least get to $7.50 or so on the run up.

GEG,

$12.50 calls is VERY bullish. Good luck to us.

Eddie

[Volatile]

All green yesterday, except for my shares (KV-A not included).

Bleeding heavily on SOMX (happens when you get on the train too late and think it'll get back on track) AND stagnating on ARNA. SOMX is a question of waiting for the product launch before the newt push up - if that doesn't happen I'm in a bit of trouble. ARNA: all's been said by you guys. Less than two weeks to go and it's still see-sawing. People keep delaying the entry. Good news on the 16th might just break the shorts, but to gamble on that day... makes me feel uncomfortable.

ALXA: heavy EOD volume, people speculating the big boys are loading up.

The rest of the Bio runups don't look too great: I see barely any volume-supported momentum. I hope we're not heading for another fiasco like ASCO.

[erlik]

The rest of the Bio runups don't look too great: I see barely any volume-supported momentum. I hope we're not heading for another fiasco like ASCO.

IMHO it is too early to tell. Yesterday's action was in part technical (a continuation of the bounce on 1040 level on SP500 from Tuesday) and in part caused by "good" (less bad than expected) manufacturing data from china and the US. The problem is that if things are still holding up in manufacturing, retail, employment and real estate look bad. We'll know how bad soon with the sales numbers for August that will be reported by many reatilers today, the pending home sales later in the day and the employment numbers of tomorrow. If these are bad I think we may re-test 1040 level soon. if that breaks we may see a second ASCO fiasco for the september plays.

For October, I do not know! Companies will start to report 3rd quarters earnings in October. Last earnings have been rather good and have buoyed the stock market in july, will it be the same in October? Not sure!

Finaly I would say that will still see a pop on approvals and that we may still see a run-up happen, but I expect the run-up to last 2-3 weeks instead of 2-3 months. Why buy long before a catalyst if the price of the stock is falling most of the time? Of course if there is an opportunity to grab cheap shares (like ALXA just after the dilution) I will still do it :-)

[Spunk]

Morning Fellow Investors,

We are in september and the two week run up for most of our biotech plays may not pan out! I am curious to see what questions the FDA have for Locarsarin, I think this is what a lot of people are waiting for before jumping nto this one....The Vivus panel members claimed that they would have voted favourably if there was two year data since Arena has this the questions would rest solely on effectiveness and thoroughness of research ...as i write vvus is on the tear ...once the 2 year data gets released it should do a 40% upward correction easy money... Orex has followed the arna trail and found a partner/wifey to take its drug to the promised land ...one yr data does ot bode well for orex .

[globalequitygroup]

Somaxon: Readers Respond (Angrily) - TheStreet

NEJM fuels calls to withdraw Abbott's Meridia - FiercePharma

FDA Advisory Panels: A Coin Flip - TheStreet

Above are 3 good articles for you chew on, regarding Somaxon, Meridia, and Advisory Committee Panels.

Today's Orexigen deal I view as a negative for Arena, as it dilutes the validation effect of their partnership with Esai. I personally think Orexigen stinks, so why would they even be entertained by a player like Takeda? However, look at the volume for Orexigen. Paltry at best on this type of news.

Currently Arena shares are being toyed with and I do not like it. I have never been a fan of people toying with my money, but there is no strong volume and the big houses can wash and rinse this stock all day long...and they are.

Spunk, you may be right...ever since the data release just ahead of the Vivus panel that contained the information regarding acidosis and teratogenicity, there may just be an unwillingness for anyone to step in until they see the docs. So be it. However, I have a hard time seeing this unfold this way. Personally I am just fine if we go into the panel at 6.75. It really means nothing to me other than there is likely a lot of short interest still in the stock and that will create rocket fuel like you have never seen before if this compound gets a nod from these unpredictable panelists.

This is certainly a test of my conviction as I am down nearly 50% on my options, but will remain long. Whether or not I will regret this stubborness remains to be seen.

If Vivus 2 year data comes back strong, that also I see as a negative for Arena as Vivus may be approved on that data.

Dendreon is making me money.

If we do not hold 1082 on the S&P look for a sell off.

Volumes in the market are hideous once again, everyone is waiting for the Dept. of Labors report tomorrow, and if its bad...well you already know.

Good Luck Today.

GEG.

[newguy]

Thank you GEG.

The second article makes ARNA look good, the timing of the Meridia panel is good for ARNA after all:

[...] NEJM's editors have called for the drug to be yanked from the market.

[....] those taking Meridia had a 28 percent higher risk for nonfatal heart attack and a 36 percent increased risk for nonfatal stroke, compared with those taking placebo, the authors found.

[...] Dr. Greg Curfman, executive editor, tells HealthDay that the SCOUT trial data shows that the risks of Meridia outweigh its benefits; its weight-loss results were "very unimpressive," he says, adding, "[W]e don't see a rationale for keeping this on the market." And Sid Wolfe of Public Citizen, which has petitioned the FDA for Meridia's withdrawal, tells Reuters that the agency "has unconscionably allowed this drug, which should not have been approved in the first place, to stay on the market."

My conviction is total (half of the time).

[Lucifer]

Well, what can I say...it's a beautiful day again.
Takeda is now funding 2 weight loss drugs...these Japanese firms are serious about weight loss, funny they didn't get the rights for Japan
The deal is a vote of confidence for OREX I guess since Takeda can easily partner with VVUS; but with a negative panel, they probably hedge it with OREX
So VVUS, ARNA and OREX are all worth 1 billion?! How convenient...I would be shorting OREX to the ground if it ever hits 1 billion market cap...what BS

Anyways, the flavor-of-the-month strategy for run up seems to be:
- buy calls for PDUFA that's more than 3 months away
- hold stocks for binary that's 1 month away
- bet for the binary with house money from profit above

Update on my biotech positions:
QCOR options - red
JAZZ options - deep red
TZA options - red
BIOD Long - green
AVNR Long - green
ALXA Long - green

Guess I will have to modify my strategy to take advantage of the collective greed, again...Luc.

[Volatile]

Mostly anaemic volumes, and a lot of playing around with Bios: up for a few days then badly down again etc. APPY is one of my favourite examples.

There does seem to be some bottom fishing. Two days of green and some people think we're in the clear. As GEG says, tomorrow will be another mover event.

VVUS: volume was decent compared to recent numbers, but not quite earth shattering. Any concrete date on the release of that 2-year data?
QCOR: seems to be a no go.
SOMX: man, was that a bad choice or what. I need some announcement from them to move the stock with regards to the launch, if only to reduce the loss. Otherwise we're heading towards pre-surge levels and that would not be entertaining. Any views on this one guys?
ALXA: if tomorrow's news is bad and it holds, this one might be heading North permanently.

GLTA.

[shibaji]

BIOD weekly doji reversal is setting in. Next two weeks should be interesting.

[gaab]

Mostly anaemic volumes, and a lot of playing around with Bios: up for a few days then badly down again etc. APPY is one of my favourite examples.

There does seem to be some bottom fishing. Two days of green and some people think we're in the clear. As GEG says, tomorrow will be another mover event.

VVUS: volume was decent compared to recent numbers, but not quite earth shattering. Any concrete date on the release of that 2-year data?
QCOR: seems to be a no go.
SOMX: man, was that a bad choice or what. I need some announcement from them to move the stock with regards to the launch, if only to reduce the loss. Otherwise we're heading towards pre-surge levels and that would not be entertaining. Any views on this one guys?
ALXA: if tomorrow's news is bad and it holds, this one might be heading North permanently.

GLTA.

SOMX : no change in faith from my side. I am surprised at the amount and frequency of the manipulation including articles from our friend at TheStreet.com. To me that only means 1 thing, I've got something good and the big boys want in before I can have my payday. It's fine. I'm working too many hours at my regular job to trade so I'm fine with waiting. At most, a few more weeks.