INGN look at it..

Discussion in 'Stocks' started by ChaosNSX, Aug 14, 2008.

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  1. I don't post calls publicly often...

    This is a message for the fund mangers and traders on here that employ a strategy of squeezing naked shorts by accumulating a position once its deemed another funds cost average has become to low from an exhausted short campaign. This method has done exceptionally well for me the last two years.

    Take a look at INGN. They are a company doing affiliated research with MD. Anderson here in Houston. There is a hedge fund naked shorting it and has been, make a few calls to UBS for color and you will find out who. This fund is being way over zealous. Sources tell me their cost average is now to low. INGN is a loaded spring with an FDA decision or buyout right around the corner. Examine the pipeline and see this company is not a one drug entity. The current drug Advexin has a safer profile than even already approved Erbitux.

    A food critic turned self proclaimed biotech expert, by the name of Adam F. who is a writer for the street has been meticulously bashing the stock with what he thinks is journalism. The goal is to get the stock delisted because the fund that is short is in to deep and would not be able to cover even if it wanted to, as an act of desperation they are going for broke. It would take over 30 days to cover, if the shares even existed to cover.

    This is one of those trades that can blow away your high watermark, and make your portfolio year. Do your own due diligence, but I thought I would put it out there and document my call for when the FDA decision is made.

    INGN and MD Anderson will put Texas on the map as a biotech power house, and vanguard in gene therapy.
  2. Mvic


  3. Checked the Bio. He may be a good pharmacist, but what does he know about oncology? It seems in that snippet he just regurgitates what Adam F. says. just seems like a way to add content to his blog for hits and recognition.

    This is the same cycle IMCL and Erbitux went through in the 90's. Less than a dollar with zealous naked short seller and now at what 62 with a high in the 80 area. That was a good one too. What you need to focus on when dealing with biotechs is the feedback of the doctors those on the frontline. Which has been rather positive in the medical community here in Houston. Opinions of doctors do not count as insider information. The self proclaimed-analysts are useless in this realm, useful in some industries, but IMO not in biotech.
  4. Why wouldn't another company buy this one if the drug is promising? The enterprise value is pocket change at this point. The company seems to only have enough cash to last the rest of the year also, which would be hard to overcome unless they get some signal from the FDA, which would at least allow them to go back to the market to get more money. Also if they get delisted how does that help the shorts, wouldn't they still have to cover? Biotech stocks are interesting investments, they behave in a completely different manner than any other sector.
  5. Good point. Seems they were approached before, but they thought the bid undervalued the pipeline. Also they were in a legal battle with a little company you might have heard of called Schering-Plough over patents. They won that fight, but the drug was so lucrative a chinese company called SiBiono pretty much ignored international patent law and went a head and did the trials in China. China then went a head and approved the drug. Technically Introgen can sue the company, but it seems they are trying to stay below the radar after the Schering-Plough battle. Its efficacy in China is another tell sign. Gendicine.PDF

    Biotechs are interesting because they are like corporate sagas.

    The problem everyone has with it is that they think there is not enough data. The part the analysts are over looking, and has been brought to my attention numerous times is that the candidates in the trials were the worst of the worst cases.

    This was not your go find people to fill a trial case. These were the ones no one thought were going to have a chance at prolonging life at all. So my take is if it works on the worst candidates with less severe side effects than the current standard on these cases, you got something that should be highly effective on general cases with chance of remission.

    I'm with you I think another company should buy them out, but I don't think they are for sale. Introgen has stated numerous times its open to the idea of a partner. Management owns to much of the company to do a hostile takeover, also its never good to do it that way with a drug research based company.

  6. Mvic


    Why the sell off right after they presented the study results in Boston in May? Also how much of a market is there for this drug given that it is really only effective for a select group of patients with the right profile? Be aware of the ownership interest of MD Anderson, Dr Roth, and the U of TX.

    This being the 1st gene therapy drug to reach Phase III you would think that hype alone would drive it higher not lower. I am well aware that naked shorts target this type of biotech company but where are you getting your data about naked shorts? It looks like short interest is 12% of float which is only 11 days to cover. Is this stock even on the Reg SHO list? Lastly where is the insider buying? If this is a case of naked shorting artificially killing the stock price why aren't insiders taking advantage of the low price to buy more of the company or even take it private?
  7. AAA30


    I looked over there last qtr and annual report. I am not expert on Biotechs and rarely touch them But, even if they get approval this is an orpan drug and only has about 40K patients a year so it will in no way be a blockbuster. It will most likely cost so much that many of the people with head and neck cancers will not be able to afford it. So the only hope they have is that the hype allows them to due a significant capital raise or a major buys them for the potential of the other drugs. With the patent dispute the buy out may not happen. What ever happens the approval is key. Play it like an option or wait till after and then pull the trigger.

    What ever happens anything to help reduce cancer death rates is a good thing so I hope they are proved to have a successful drug.
  8. Right, thats real intelligent advice. Short it and then wait for the news or big contract/acquisition. I'm sure there will be plenty of room for all naked shorts to get out before an overnight gap. Biotech's are a fairly neglected area of the market, by the time the spotlight hits the entry is long gone.

    Most companies in biotech do have gradual reduced net losses until they are acquired, approved, and or their technology implemented, then the revenue stream flips positive instantly. This happens because usually there is a large upfront capitalization payment to the company then partner participation in the next phase. By the time a biotech or technology research company's revenue stream flips positive overnight, the share price has already had significant gain as the earnings multiples are applied to future projected cash flow. Thanks for your flippant addition to an otherwise orderly thread.

    Heres a rule of thumb Mark twain had, and i thinks its appropriate for your previous post.

    "It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt." Mark Twain
  9. Maybe Flippant was a little harsh. I retract the statement, just seemed you were coming across to me as a little jaded in your outlook and presentation.

    Yes it could be a good "momo" play as it will take multiple days after an initial gap to cover FTD shares that are not readily available.

    You also bring up a good point. Not that I need to go into details about how I trade, but I approach biotech as i would risk arb (except risk arb has been in a slump performance wise).

    As for the short interest, its probably more than that now. To keep up the same short pressure requires more shares as the shares are priced lower, the more shares increases a short campaigns cost average down. This creates a reverse pyramid formation. In Layman's terms is what creates the loaded spring.

    #10     Aug 21, 2008
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