This stock certainly has Gumshoe Nation in a bit of a lather… though it’s also one that many of you already know about, and the solution to this teaser is not super-secret (it has been posted in recent discussions here at Stock Gumshoe a few times).
Marc Lichtenfeld puts out a newsletter advisory called Lightning Trend Trader for the Oxford Club, and his latest pitch is like so many in the world of biotech: He says it’s going to save lives and make you extraordinarily wealthy… so you get to be rich, and you get to feel extra good about your wealth because you helped to fund lifesaving work!
Life (and investing) is rarely so simple as that, of course, particularly in the highly volatile world of biotech stocks (exhibit A being Lichtenfeld’s guarantee that ALNY would double when it was around $130… it has instead halved in the biotech washout) … but let’s look into the promise Lichtenfeld is peddling this time…
“The greatest biotech stock story of this decade is about to hit the markets right now.
“To put it simply, one under-the-radar company is about to release a “universal antidote” that could likely save up to 1.5 million lives this year…
“And every year after.
“When it does, it could add $1 billion to its revenues…
“And send the stock soaring 8,233% over the long term… possibly even higher.”
Geez, that’s only $666 bucks for each life saved! So what is this “universal antidote,” you ask? More clues:
“… every year, as many as 1.5 million people suffer from a severe medical event – one that requires immediate attention.
“Worst of all, many of them are unable to beat this highly preventable cause of death…
“One that has NOTHING to do with infection… heart attacks… or even human error….
“Most of these deaths are unrelated to the illness or condition that patients are being treated for….
“A miraculous new drug – with an incredible patent moat… and zero competition – is on the brink of eliminating these untimely deaths once and for all…”
There are some pull quotes from doctors and well-known medical journals thrown in at this point, largely to give some weight to the promise — if the New England Journal of Medicine calls it “a potential universal antidote,” the copywriter thinks, that means a lot more than Marc Lichtenfeld calling it a universal antidote.
This is an important point when we should mention what “universal antidote” means, however. An antidote is a counteragent to a drug or a poison (many drugs in the wrong dose or the wrong patient, of course, might be considered poisonous).
So… does this “universal antidote” mean it will counteract all drugs? Uh, no. That’s essentially impossible (I feel pretty confident saying that, even though I’m too much of a dummy to understand much in the world of biology and drug development). And, of course, a “universal antidote” could perhaps save a lot more than 1.5 million people.
But apparently it is an antidote to something that causes “a severe medical event”.
Any more clues?
“It’s based on the results of a 13-year collaboration of award-winning scientists who come from Harvard, Yale, Johns Hopkins and more.
“And, thanks to this drug’s dramatic life-changing potential, it’s already been designated as a breakthrough therapy AND has been granted an Accelerated Approval pathway by the FDA….
“early trial results show that this drug is immensely effective.
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just click here...“It’s capable of achieving results in as little as two minutes…
“… if you want a shot at seeing results like these, you must get in before August 17.
“You see, Lightning is about to strike for this little-known company…
“And when it does, I estimate – based on the sales figures alone – that it will surge 8,233% higher. (I’ll show you why that could even be a conservative guess in just a moment.)
“By the end of this summer, you could find this one-of-a-kind drug at every hospital across the nation.
“Let me be clear… it has absolutely NO competition. No alternative.
“And it’s surrounded by patents… protected from competition for the next 15 years or more.
“Dr. Jerrold Levy of Duke University predicts that once available, all hospitals will stock the universal antidote.”
OK, so that’s got to be enough (especially since, as I noted above, a lot of you already know this stock pretty well) — the Thinkolator can confirm that this is, in fact, Portola Pharmaceuticals (PTLA).
And yes, it has developed an antidote to Factor Xa inhibitors called Andexxa (Andexanet alfa). And it should be hearing from the FDA very soon on approval, their PDUFA date is indeed August 17 (the PDUFA date is the deadline by which a response from the FDA is expected, it’s not set in stone but the FDA usually gets close).
What is an “antidote to Factor Xa inhibitor?” Well, again I tend to reveal my ignorance whenever I talk science… but it’s basically an antidote to the newer variety of anticoagulant drugs like Eliquis and Xarelto (newer, that is, than the low-cost Warfarin that has been in use for a long time, with lots of well-known side effects). So if a patient is on a Factor Xa inhibitor medication to reduce coagulation, often for prevention of blood clots that could cause strokes or embolisms, such as during or after surgery, but they then have uncontrolled bleeding or internal bleeding for any reason, then they need to reverse that anticoagulant quickly… but apparently they can’t easily do that with existing drugs.
So that’s the role that Andexxa is expected to fill when it gets approved, as is widely anticipated in the next couple weeks (they’ve already had FDA inspections of their initial manufacturing facilities, in addition to getting a “Breakthrough Therapy” designation). And that’s why it’s pretty widely expected that it will not only be approved, but will be stocked in all hospitals and be a standard drug that’s on hand in the ER even if it doesn’t necessarily get used in every hospital every day. That kind of initial stock-up for a drug could bring a substantial wave of revenue, the thinking goes, though I don’t know if it’s particularly clear what kind of sustained market there will be for the drug — these “antidotes” are quite new, the only other one I’ve seen mentioned is Praxbind, which Boehringer Ingelheim received approval for last year as an antidote to their own Pradaxa anticoagulant. I expect the hope was that having a direct “antidote” to Pradaxa would help that drug to compete with Eliquis and Xarelto, but I don’t know whether that’s working out in the marketplace (I’m not trying to imply that it isn’t, I just don’t know — Praxbind is pretty new to the marketplace and I haven’t seen any sales numbers, nor do I know if Pradaxa sales have changed substantially since Praxbind was released).
Portola is still expected to lose money for the next couple years, though, even with the anticipated approval and rollout of Andexxa later this year, so clearly much of the valuation of the stock is based not on that “universal antidote” Andexxa, but on their other drug candidates… with presumably their own Factor Xa inhibitor, betrixaban, being the most important one that’s coming down the pike. Andexxa will not be a multi-billion-dollar drug, from what I can tell, so it’s not going to be the big long-term driver of a large business… but betrixaban will be competing with Eliquis and Pradaxa and Xarelto, each of which already has annual sales of well over a billion dollars, so presumably the potential is much greater.
What’s gonna happen? Well, I don’t know — but Andexxa is expected to be approved within the next couple weeks, and to be sold through to hospitals quite quickly after that because it will serve as an antidote for both Eliquis and Xarelto, which are both multibillion-dollar drugs that are currently outselling Pradaxa. Analysts expect it to create substantial revenue growth immediately, with sales approaching $40 million this year and more than $120 million next year… but even at that, they’ll be posting losses of at least $3 a share next year if the forecasts are at all accurate. So my suspicion is that unless Andexxa generates sales that are substantially higher than that, the FDA approval is likely priced in and the more important data will be coming from their drugs with higher potential ceilings, including betrixaban and cerdulatinib (a blood cancer drug that has completed Phase 1). Betrixaban announced results that the market disliked in the Spring, but it’s not at all clear to me what’s going to happen to the drug just yet — they said in their press release that they would apply for FDA approval in the second half of this year, and they have Fast Track for this one so they may well be able to get a six-month PDUFA instead of 10 months.
Portola has been widely discussed in the comment threads following Dr. KSS’s articles for the Irregulars, so those of you who are most active in that group likely know far more about it than I do — Dr. KSS wrote about the company in detail a couple years ago and that article is an excellent examination of the science and the market for anticoagulants if you’d like to get more background information, though things have likely changed substantially since then (the stock has made a round trip, to $50+ and back, in the ensuing 20 months of biotech craziness).
And I’ll leave you there — Marc Lichtenfeld says, “I estimate that, starting August 17, this company will see $1 billion – or more – in new revenue…. Sending its stock at least 8,233% higher.”
I very much doubt that, at least if he’s talking about annual revenues, since it would mean that analysts are underestimating next year’s revenues by a factor of 10… which is possible, of course, analysts are often wrong, but it’s not all that probable. That doesn’t mean it’s a bad stock or that it will be a bad investment, it just means that contemplating 8,000% gains isn’t the best way to start your critical due diligence on a stock. If you’ve got thoughts on Portola, please share them with a comment below… thanks for reading!
Long $PTLA. While Lichtenfield’s profit and revenue claims may be vainglorious, I personally feel they’ll [the profits] be more substantive than pessimist estimates because of the requirement for ubiquity of andexanet alfa. Good science is disruptive. No ER or ICU will be able to, you know, claim they’ve not heard of the new agent or aren’t inclined to use it. It will be FDA approved on 17 Aug I am highly confident (HHS is practically holding a gun to the agency’s head!), and therein a new rigid standard of care is created for all time. Now, we cannot be sure whether all hospitals will stockpile vials of the long-lived lyophilisate powder or just a few vials and rely on overnight pharm distributors. But there WILL be a huge lead-in bolus of sales…..this is a drug no facility can “opt out of” or “not afford”!
For sake of truth, my PTLA position is under water. Still this is an HN grade A stock (our biotech scoring system) with utterly unsurpassed scientific expertise in American biotech. The way forward is murkier for betrixiban, but its slightly negative data so flummoxed so many that there may be legit ways around it.
Meanwhile, a biosimilar for andexanet alfa?? Dream on cowboy.
Watch for $PTLA to get nabbed by the likes of a Pfizer. And hey, if it doesn’t, these people have scores of good ideas in the incubator.
Thanks Dr., I imagine it will be interesting to see how the pricing and actual consumption numbers go once the approval comes through and sales start.
Portola Pharma Risk-Reward Is Questionable
10:37 am ET May 31, 2016 (Benzinga) Print
Credit Suisse has downgraded Portola Pharmaceuticals Inc (NASDAQ: PTLA) to Neutral from Outperform on balanced risk/reward following the recovery in shares since late March.
The brokerage also cut its price target by $3 to $30 on “more conservative assumptions around the uptake of Andexanet Alfa following a series of conversations with experts in the field.”
“We now assign a 40 percent POS to FDA approval of Betrixaban. We are encouraged by the totality of the APEX data and do believe the overall benefit/risk for the product is likely favorable,” analyst Vamil Divan wrote in a note.
Related Link: Intercept’s Ocaliva To Experience “Sluggish Uptake,” Investment Thesis Now “Rapidly Shifts” To Execution In PBC
However, the analyst continues “to believe it will be very challenging for regulators to approve the product when the only registrational study conducted for it failed to meet the primary endpoint.”
The analyst also trimmed estimate for peak probability-adjusted global end user sales for Andexanet Alfa to $1 billion in 2030 from about $1.7 billion.
“Beyond Betrixaban, we believe approval for Andexanet on or before the Aug 17 PDUFA data is widely anticipated and expect initial uptake of the product will take time, limiting major upside for the stock on the news,” Divan noted.
The analyst now sees 2016 loss of $4.38 a share versus prior estimate of $3.58.
There is a HUGE need to come up with antidotes to these newer anticoagulants.
I am a physician and have had direct experience of the problems associated with lack of reversibility of these agents.
It will be very big if it works.
Agree!
I was in Mr. Lichtenfeld’S Lightning Trend Trader and had to get out before I lost all my money. I have tried many of these $1000 and $2000 programs and none of them have made any money for me. Gumshoe has saved me a lot of money showing me that these “experts” are not experts at all.
The problem from a revenue perspective reversal will require a single dose of Andexxa. Factor Xa inhibitors have lower major bleeding risks than warfarin (around 2%/year). This drug will only be used to reverse major bleeds. Almost every hospital will stock a few vials but I can’t envision a busy hospital going through more than 10 or 15 vials a month (speaking as a physician that works in a busy hospital). I haven’t done the math but will this equate to 1 billion + of recurring revenue per year?
Not true. The present risks of bleeding with warfarin are vastly lower than for inhibitors of factor Xa because warfarin-related bleeding is readily manageable (low-dose vitamin K, FFP, prothrombin complex concentrates). $1B of recurring revenue should be no problem for Portola. Long $PTLA.
Hello Doctor, a beautiful saturday to all,
I start my first dose of 2.5 mg of Warfarin this evening, my INR being 1.2 with a goal of 2-3 I believe? I’m as hesitant or even more on starting this regimin than I have been of anything I’ve gone thru’ yet. Perhaps it has something to do with willingly taking a rat poison to which I can best explain my dread to the old quip about parachuting, “why jump out of a perfectly good plane?” except this isn’t exactly a perfectly good plane. 😉
Ok, enough of my bent humor, I’m wondering if keeping some OTC vitamin K around wouldn’t be a prudent idea should I have an event in order to dose before I could get to care, such as in keeping aspirin around for high probability heart attack candidates is prudent?
I know this is for my physician or rather his GNP, but unless I ask the questions guidance never seems to be forthwith and this being the weekend…another blood draw scheduled for tuesday to see where we stand.
Am I over thinking?
Gui….in your situation, warfarin is VERY tricky. You might consider e-mailing me so we can discuss.
@DR. KSS MD PHD
Not true. At least for Apixiban rates of major bleeding were significantly lower than warfarin. This has nothing to do with reversibility.
http://www.nejm.org/doi/full/10.1056/NEJMoa1107039#t=article
Major bleeding, as defined according to ISTH criteria, occurred in 327 patients in the apixaban group (2.13% per year), as compared with 462 patients in the warfarin group (3.09% per year)
Show me any evidence to back up your statement that the bleeding risks of warfarin are vastly lower.
Not a nuanced reader, are you?
Typical scenario- senior on Xarelto breaks hip/ needs surgery/sits on ward for 5-7 days while Xarelto wears off/ needs several transfusions during same period.
Or- gets Andexxa and gets surgery in timely fashion.
I see a lot of need for it.
@DR. KSS MD PHD
Fair enough missed the subtle sarcasm. I am not disputing there is a huge market for Andexxa. Just not sure it is as huge as people are predicting.
There is a lot of misinformation. It does not take 5-7 days for Xarelto to wear off like in the hip surgery example above. Elective hip surgery guidelines are that you stop apixaban/rivaroxaban 2 days before surgery. Whether this person would get a dose of Andexxa would probably depend on the pricing. It usually takes a couple of days to get this person to the OR anyway so my guess in no.
I do not agree with the analyst’s recommendation about universal antidote;i feel the number of times the anticoagulant effect needs to be reversed is relatively small and hence the estimation of the market is great exaggeration and the analyst is very wrong;P.natarajan,M.D.,F.A.C.C.,M.B.A
EXCEPT:…they DIDN’T get the approval and the stock is down.
The good news is that Normally Dubious here bought a PUT before August 17 that is now worth over $100
Any chance on getting some input on the recent ruling? Sounds like there is still potential – but I don’t understand this area.
I have bought some Portola shares a few months ago and they are up by 43%. I am waiting to see what happens and will get out fast if it looks like being a dud. I never believe those outrageous claims, anyway – if they were true, people like Mr. Lichtenfeld would be multi-millionaires and would not have to fish for new customers.