by Travis Johnson, Stock Gumshoe | January 6, 2015 1:46 pm
This is a quickie for you, I came across it and don’t want to write up a full look at the company but I thought some of you would like the teaser solution.
The ad’s from Agora[1] Financial’s FDA[2] Trader, which has been touting this “magic calendar” idea of investing in stocks around (mostly) PDUFA dates and other FDA and clinical trial-related news releases. And no, the calendar isn’t “magic” — nor is it exact — but there are dozens of such services now because FDA reviews and approvals are on more of a defined schedule following the passage of PDUFA a few years back, and a growing cadre of both free and paid services and websites track those dates. Because the FDA doesn’t — at least not in a way that’s geared toward informing the public about which dates are about to hit.
PDUFA dates are reported by companies in press releases or conference calls, often, and they are deadlines by which FDA response is expected — roughly 10 months after a submission in most cases. A response could come earlier, and often comes a few weeks earlier than the date, and on occasion they miss the deadline.
And, of course, if you think you know exactly what the FDA response will be on any particular new drug application (NDA)… well, good for you. But please don’t bet your mortgage payment on it. People have made and lost huge amounts of money by speculating on stocks with upcoming PDUFA dates, and the people who lost money were pretty sure they were right, too. Surprises can come on anything, even a relatively innocuous looking aesthetic injection.
But with that said, which stock has Paul Mampilly[3] labeled a “buy” here for that May 13, 2015 PDUFA date? Here’s some from the latest ad:
“Why You Need to Circle This Date Right Now: May 13, 2015
“If you’re getting your car fixed on May 13, 2015, cancel it. A birthday party to go to? Send a card. Going on vacation? Bring your laptop or phone — and for Pete’s sake, make sure you can access your online brokerage account…
“This date first appeared on the ‘magic’ calendar on July 10, 2014.
“And it needs to be on yours TODAY….
“Why? Paul’s marked this stock as an official ‘Buy.’ He believes this stock is about to go on an epic 4-week run that could get you as much as 50% returns, very quickly…”
And a few more clues:
“This company’s market capitalization right now is about $832 million. If this drug goes through the FDA approval process… this PDUFA date can single-handedly give you at least 50% gains….”
And a bit that I expect will make Dr. KSS[4] mad:
“The key to success in trading biotech stocks is NOT medical knowledge. I have zero medical training, yet my returns beat the pants off most scientists and doctors…
“All you really need to make money is know-how — and the specific dates to get in and [get] out…”
There are hundreds of biotech hedge funds[5] and advisory services catering to institutional investors. If all you had to do was know the dates, they and every other biotech investor with a little time on his hands would be doing spectacularly well (well, maybe recently they have — but even the big biotech indices doubled over the last two years, you don’t always get such a tailwind)… I don’t know how to put this strenuously enough, but everyone can know these dates with a modicum of effort. There are even some folks who collect the data and share it for free, like the guy who started BioPharmCatalyst and its FDA Calendar.[6]
Now, maybe Mampilly really has a particularly effective way of trading around these dates. I don’t know, but I’m skeptical that many such strategies can survive if you throw a couple thousand subscribers at them — if he sees historical chart patterns around PDUFA dates and then tells 2,000 investors, who each have $5,000 to use in a speculation, about that pattern… guess what happens?
Maybe his readers won’t impact this particular stock quite as much, because it’s somewhat larger than a lot of the more speculative biotech stocks we hear about all the time, but shall we at least tell you the name of the stock?
OK, this is — going just by the market cap and the PDUFA dates — the aesthetic biotech KYTHERA Biopharmaceuticals (KYTH), which is trying to rid the world of the horror of the double chin.
I have done the same thing, by the way — my solution is called “the beard” and I’ve been using it, no royalties due or doctor visits required, for 25 years. I know, it doesn’t work for everyone. Women particularly seem to resist this aesthetic innovation.
I don’t know much else about Kythera, but they do expect word from the FDA on ATX-101 in the Spring and those dates match (the PR from Kythera back in July is here[7]). They have broader ambitions for their technology and expertise, but this first application is basically a purified acid that naturally occurs in the body and that helps to break down fat — apparently their localized injections can apply this acid to just a small area, break down a lot of the fat, and help the body reshape the contours of that second chin. According to their recent investor presentation, it looks pretty impressive — I have no idea whether this is a big market or the drug will be a big hit if it is approved, but they haven’t reported anything scary about it that indicates it won’t be approved or that it has been flagged for big safety issues that I’ve seen.
The stock has been in a trading range, seemingly attracted to the $35 neighborhood, ever since the PDUFA date was announced on July 10 — recently it has come down a bit, so it’s no longer an $832 million company but it was right around there last week.
So with that I’ll leave you to it — don’t know anything else about them, other than that they had a successful IPO[8] in 2012 and sold more shares in late 2013 that boosted their cash level, and they now have close to $100 million in net cash and should presumably be in decent shape and not in need of funding immediately (as long as the FDA doesn’t send them back to the drawing board or reject their drug). The CEO is presenting at the JP Morgan healthcare[9] conference next week, so that may bring some more attention, but beyond that I don’t know of any expected catalysts “in the next few weeks.” Seems on the surface like another logical company for Allergan to buy someday, but you never know.
Dr. KSS mentioned the company briefly in his first column for the Irregulars back in March[10], and they’ve come up from time to time in those discussions among our biotech enthusiasts, but that’s about all I know about the company. Over to you, biotech investors, let us know what you think…
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well done once again!
Kythera is asserting that plain old deoxycholic acid, a salt found in bile from humans and animals, can dissolve away fat. One never wants to say, ah, harrumph, totally implausible, about a bile salt, because they turn up now and again to having dazzling properties when isolated, purified and studied. But fat is kept sealed in adipocytes, and it is not totally clear to me that injecting a bile salt into a double chin will make it single again. It’s definitely not a play in which I would personally invest because frankly all their agent may be doing is irritating the crap out of the injection site and lead to scarring that retracts the skin. Just because bile salts solubilize fat in ingested food does not mean that they can “melt” away tissue fat. People need to be careful with Kythera.
Thanks, Dr, KSS!
Headliner: Kythera files first-of-kind class action divorce petition with FDA on behalf of double-chinned clients who want to be single again. The FDA’s PDUFA (Pretty Darned Ugly Fat Accumulation) ruling is expected in May.
It will probably triple that chin or dissolve the whole face
And may I add that a better way of ridding the double chin is to not get one in the first place.
Easy quincy! Yo might upset some of us “husky” types. 😉
I still like my solution better. But yes, prevention and the big, simple, known things are always better than the sometimes drastic interventions we take to recover from long-term bad habits or mistakes. In investing and in health — interesting column on that over at the Fool today, food for thought.
I gotta hand it to you Travis. You are a droll fellow. I truly appreciate your wit, and hope that you get credit at home for your sense of humor. The beard solution to the double chin is a time-honored method.
This isn’t worth much but for what it is worth, I drive by the Kythera building every work day. It’s located in what used to be 1 of 2 twin buildings built by Countrywide-then taken by BofA-then which remained empty for awhile and have now been re-skinned with Kythera in place. This is located just east of the 101 freeway in the Thousand Oaks/Westlake area of California.
OK Jeff, mail in again when the cars in the parking lot upgrade!
Jeff,
Adding to ian’s brilliant request, please phone in (555-555-1234) when the chaffeur-driven limousines enroute to Kythera HQ start backing up from the off-ramp onto the 101 (not likely to happen – if at all – until after May 2015).
Thank you very much for the service that you provide to prevent us from being ripped off! I
have received many emails touting a tiny company whose stock is around $4.00/ share. They have finished 2 clinical trials related to a cure/treatment for Uveitis, and eye condition that can lead to blindness. Their stock price is supposedly immediately ready to begin the climb that will make early investors rich.
Would you please help us decipher this situation?
Thank you very much for your help!
Alton Graves
We believe the stock is XOMA,down today under 4.00 dollars
Anthoney, thanks for the ID. I think it worth noting, at least in the version sent out by Kent Moors, it’s stated that a now retired consul for the FDA now sits on the company’s Board of Directors. This may be business as usual in DC but I don’t like the smell of it and I’ll take a pass.
For those interested in this whole “fat busting” meme using a variety of technologies (quite a few of these companies have come public) we did a post on the group:
http://ipocandy.com/2014/11/fat-busting-by-injection/
I’m using the diet and exercise approach. Seems healthier and less painful. (I’ve tried the beard by mine grows in ugly and too gray for my youthful demeanor…)
Kris
Travis,
I got a chuckle out of your beard comments.
Fiddy
I don’t care much about disolving a double chin. But if you come up with something that can be injected to disolve a double belly!!! The sky’s the limit.
For that you want Neothetics (NEOT), which has a somewhat similar strategy (though an entirely different compound/substance) for “contouring” away that stubborn subcutaneous belly fat. They went public at the end of the year and slumped quickly, planning a Phase III trial later this year. No idea if it’s any good, but like Kythera they’re going after the “we’re so close to perfection” folks who have that one little thing that’s bugging them… a stubborn flap of fat below the chin, a stubborn “pouch” in the belly after hours of daily exercise and diet. Kind of like the Zeltiq “coolsculpting” device that freezes the stubborn little bits of fat off of otherwise perfect and skinny people, these seem unlikely to be of mass appeal. They can’t make me fit into 34-inch waistbands, they can just make my belly look slightly flatter after I’ve already done the hard work and lost the 40 pounds to fit into those pants. Ugh.
Then again, there sure is a plenty big market of people with just as much money as they have vanity, so perhaps it will work out well if they get approved.
In defense of my original comment, I followed the link to the Fool article, which began with the note that not smoking is better than all of the known treatments for lung cancer. Easy to say, but difficult in practice, I know. The point is that simplicity is often best in both health and investing. A Vanguard fund with a 60/40 mix of stocks/bonds outperformed most hedge funds over the past decade. This is precisely what I have already chosen for my grandchildren’s 529 plans. I hope to report results to you after the next 16 years…I’ll be 90. In the meantime, no smoking, please.
quincy, would you share the Vanguard ticker with us?
“Liking you” in advance as a way of saying ” Thank You”.
Don’t know what Quincy uses but Vanguard’s indexed 60/40 fund is VBIAX. The actively managed Wellesley Income fund is similar, VWIAX, with better average performance over the last decade or so.
RE VBIAX & VWIAX — Thanks, Travis. I’ve been wanting to start a brokerage account for my 6 year old granddaughter. These might fit the bill.
In my case, it is a mix of funds VITPX, VTPSX, VTBNX and VTIFX, which is weighted to 60% stocks and 40% bonds. VTPSX is foreign stocks, which may add more risk to the mix compared to VBIAX, which I believe focuses on the USA market.
I wouldn’t expect bonds with long duration or maturity to do well in the next decade.
Nor would I. But I probably would have also said that in 2007 and been dreadfully wrong (so far).
Classic Travis line about using a beard instead. ” Women particularly seem to resist this aesthetic innovation.” Keep them coming Gummy.
At 80 + years of I should not be concerned about a double chin, but a relatively short beard cancels it out very nicely. I have had the beard for at least 10 years. Young children seem to enjoy it probably because it is white. I assume that the belly fat plus the beard reminds them of Santa.
Please tell us what this drug “Delta-9” being teased is all about. We just want to know if this will be a good legitimate company to invest in. Thank you.
My understanding is it’s just a fancy name for,medical marijuana and pick your company. Another ruse to get you to buy their newsletter over extremely bogus claims. don’t get teased!
I could not restrain myself from responding to Travis’ comment about using a beard to cover up a double chin. I don’t know if I have a double, since I have “sported” a full beard since the age of 21 (I am now 65). However, I once had a girlfriend who demanded to see a picture of me from a pre-beard time to prove to her that I was not hiding a double with my beard….
But now to get to the point. I ask any and all women to post their opinion on beards. I have always imagined from my vantage that a beard would be more becoming (softer, attractive, tolerable, sexy, whatever you want to call it) than stubble. But I would like to know what women actually think. I ask all women on Gumshoe to please post your opinion on this matter.
From the male perspective, I’ll bet that when any of us reach 80 years old, we are not going to look back and wish that we had spent more of out time shaving.
Since this is a stock forum, not a blog about the desirability of beards, I shall now return to the original subject matter, which is whether injection of bile salt (sodium deoxycholate) would be expected to dissolve a double chin. I second Dr. KSS’s comments, but with even more force. It is extremely unlikely that injection of bile salt would cause adipose tissue to recede ( I have not read the source material, but I infer from the banter that Kythera is proposing that injection of bile into a double chin will dissolve it). As KSS intimated, bile is a detergent-like molecule that is secreted into your intestine from your gall bladder to help digest and dissolve fat, in order to help to deliver fat to your blood stream for saving away for lean times. It is unlikely that bile will enter fat (adipose) cells, so it is unlikely that it will have much effect on them. If I had to guess, I would say that bile might kill a few cells at the site of injection, as would any detergent, but that this would not cause systemic biological change at the site of injection.
I am merely expressing my opinion as a biochemist/molecular biologist, not giving investment advice.
My Beloved has had a beard for many years longer than I’ve known him. He grew it to simplify his life as he was spending a lot of time in the field in his undergraduate & graduate student years. It is neither soft (has a wiry, prickly texture) nor well-trimmed (despite my years of delicate hinting) and nowadays he is often mistaken by children for Santa/Father Christmas, a happy side benefit.
For a training exercise with MSHA (Mine Safety & Health – US govt regulatory body) using full-face respirators for use with plutonium remediation (Johnson Atoll/Johnson Island nuclear accident cleanup), the beard had to be shaved off. It was the first time I’d ever seen him beardless (except in his old family photos from before my time) and it was a horrible sight. I threatened divorce if he shaved it off again.
Oops – it’s Johnston Atoll/Johnston Island, and there was more than one nuclear accident there.
Penny
Re: Beards My husband had a beard–very neat/trimmed. One day he appeared very ill to me; after looking at him for a while I finally said “you look ill, honey. Do you feel ok?” He responded “I shaved by beard!. ” So, I guess for me it is the man, not the beard that matters! By the way, I would never have gone out with a man with a long , messy beard. It would have to be well-kept.
BEARDS, not long on ZZ Top style, like the short, trimmed kind, very sexy! cheers
I once caught sight of my mother looking in the mirror at the excess folds of skin under her chin. She said, ruefully, “I should have gotten rid of that years ago!” She was 91 at the time. Good thing the bile acid stuff wasn’t around; she would likely have given it a try.
So what’s this “pinpoint surgery” stock Paul Mampilly is touting in the comeon for his new advisor service, The Professional Speculator?
Up 58% and counting – Kyth – Give the picks some time folks
Kythera to be bought for $75…117% gain
Bought $NEOT @6,60. Could be played in sympathy with the Kythera deal. >60 Mio. $ Cash vs. Market Cap < 100 Mio. $.