Respiratory Syncytial Virus

Discussion in 'Stocks' started by nursebee, Aug 15, 2014.

  1. nursebee

    nursebee

    I'd like some help with understanding a company and a trade. Kind of open an idea of mine for debate/discussion.

    Background: I first stumbled onto this company by mistake. Perhaps I was a noob, subject to swaying in the wind of emotions. Asians were wearing masks in public. Bird flu spooked the press. This company likely got promoted or something, it grew leaps and bounds. I paid some tuition on it, likely back in 2007. Since then I have returned to it like a dog eats its own vomit.

    The story today: This company is working on novel vaccine approaches using virus like particles. Traditional vaccines are made very differently. A virus is grown in a chicken egg, then inactivate by some method, the virus gets injected into a body which builds resistance in case of exposure. This company grows portions of the virus in a different manner (fall army worm?), creates a vaccine. Sounds a little sci-fi to me. They have some good candidates for seasonal flu and respiratory syncytial virus.

    A side note for confidence: the two HPV vaccines put into the youth of the US are similarly made.

    RSV is the largest cause for pediatric/newborn hospitalizations.
    RSV also greatly effects the elderly.
    Potential market thought to be $5B per annum.
    Bill Gates helps fund via Path.
    US Govt helps fund via Barda.
    Market helps fund via dilution.
    Uncle Fido owns >11% of shares.
    Management buying shares.

    Downside:
    New pharma highly risky IMO.
    Further dilution likely.
    Trial failure possible.
    Years likely before product on the market.

    Prior to recent dilution I had $33-83 price target.
    Novavax NVAX
    I'm swinging a big bat.

    Last time I asked for feedback was here: http://www.elitetrader.com/et/index.php?threads/tsla.224571/

    nvax.PNG
     
  2. nursebee

    nursebee

    New 4 week high this am, perhaps some turtles to get involved?
     
  3. drcha

    drcha

    There are already pretty good vaccines for these things out there. The bar for safety on these vaccines is very, very high. One eyebrow-raising adverse event (even if it cannot be definitively pinned on your vaccine) and your whole global program is kaput. It is hard to run a massive trial without observing a bad event, and you need a massive trial to get approval for an effective vaccine, because only large numbers of patients will tell you about rates of efficacy and provide enough information about safety.

    I've been in the pharma business for 12 years and do not invest in anything except (1) big pharma and (2) device or diagnostic companies that are actually running properly designed, randomized studies likely to gain them not only approval, but payment by insurance carriers. I have seen so many drugs and biologics go down the drain, many of which looked extremely promising.

    However, I am probably not a good person to listen to. I never invest in "story stocks" and it hasn't hurt me any, especially in 1987, 1993, 2001, and 2008. On the other hand, if you just want to trade it short term, then their chance of success might not be relevant. But since you discuss the company's prospects, I assume you are interested in something else.
     
  4. nursebee

    nursebee

    drcha,
    thanks for the reply. I really need to hear/read more proper bearish analysis of this company.
    There are no vaccines for RSV.
    I believe there have been no adverse events thus far in the stage 1 and 2 trials completed for both RSV and seasonal flu.
    Lots more stage 2 trials in coming year, with first stage three late 2015.

    I am not a short term trader, started making money on this some when it was $1.86

    I try and buy the next great growth story, in a company that I can understand, with strong leadership. I also want massive future market, not something really specialized. This seems to require it being a "story stock".

    In my line of work, I too have seen many approved drugs go down the drain. Device companies prone to the same, though perhaps I am not as familiar (I am thinking of cardiac medicine as discussed in a Norton Hadler book).

    http://www.nasdaq.com/symbol/nvax/institutional-holdings
     
  5. nursebee

    nursebee

    Would anyone care to share what they see with regards to TA for this company?

    To clarify, symbol is NVAX
     
  6. nursebee

    nursebee

    OKAY, how about a little help figuring out future price targets.

    Two pharma companies I missed out on owning were ALXN, on my watch list years ago at $25, and JAZZ which a chat room I was in was being touted when around $30. I could not wrap my head around those drugs, nor come up with decent analysis for growth.

    When I was really getting on board with TSLA, I again had a tough time figuring out a future price target. I asked for some help here, conversations got real perverted.

    If I take a look at ALXN, it has 2B in sales and a 33.5B mkt cap. cap is about 16x sales.
    JAZZ has 1B in sales and a 9.45B cap, about 9xsales.
    NVAX working on RSV vaccines- published by many to be a 5B market each year.
    5B multiplied by the above comps yields mkt cap of 45B-80B. Today it is roughly 1B, closed at $4.6.
    So future price target based just on RSV sales could be $207-$368.

    Price now should clearly be less based upon risk and time.
    What is wrong with my analysis?
     
  7. Tavurth

    Tavurth

    My systems say it will start moving up this coming febuary and that below $3.9 is a good buy. First targets at $7.
    Your own advice should always rule over tips.
     
  8. nursebee

    nursebee

    Tavurth, have your systems made you money?
     
  9. nursebee

    nursebee

    aa.PNG
     
  10. Tavurth

    Tavurth

    Yes. I am more active in leveraged markets.
    I'm considering getting back into equities as the charts are very clean in comparison. When I look at your chart I note that the cyan line does not fit the price action. Do you use it as a filter?
     
    Last edited: Aug 25, 2014
    #10     Aug 25, 2014