Missed on ONTY

Shares of ONTY gapped up this morning on positive preliminary results for Stimuvax, a lung cancer immunotherapy.

http://www.tradingmarkets.com/.site/news/TOP%20STORY/2383852/

Based on this article reporting positive results on breast cancer clinical trials, I contemplated purchasing some ONTY shares over the weekend. However, it soared over 30% this morning before I could get my buy order filled. I will hope for a pullback, as ONTY has as much, if not more upside potential than DNDN, the prostate cancer immunotherapy company we profited from back in April.

DNDN's Provenge had a 22.5% overall survival benefit above advanced prostate cancer (PC) patients on placebo, and patients on Provenge lived 4.1 months longer on average, which is significant considering late-stage PC life expectancies are short. Once approved by the FDA, which now appears likely, Provenge will extend the lives of many PC patients, and labeling will be extended to early-stage PC patients, further increasing the 90% success rate for that segment.

In June, ONTY announced a 17.3 month median survival benefit for Stage IIIB non-small cell lung cancer patients above those on placebo. With multiple shots on goal with Stimuvax (lung, breast, prostate, and colorectal cancers), and a healthy pipeline of other oncology drugs, ONTY shares have some serious long-term upside potential.

This is not a recommendation.

Disclosure: I have no position in ONTY, and a long position in DNDN.

Dendreon revisited

Adam Feuerstein, an analyst on the street.com, who was previously bearish on DNDN, offers the following bullish analysis on Dendreon:


http://www.thestreet.com/story/10503521/1/dendreons-gold-whats-next-for-provenge.html

Interesting tidbit on commercialization prospects:

"Most people are modeling Provenge along the lines of Erbitux now," said Gold, referring to the cancer drug from Eli Lilly(LLY Quote) and Bristol-Myers Squibb(BMY Quote). "I think Erbitux costs around $80,000 a year now. ... I'm not saying that's going to be the Provenge price, but that's what analysts and people on the Street have in their heads when thinking about a Provenge price.

"If you use that assumption and say that the market size is 100,000, men then the total commercial market opportunity for Provenge is $8 billion."

Gold on Provenge in Europe:

"We have only had superficial high-level discussions with the Europeans, so the European regulatory strategy and European commercial plans are things that we're really going to look for a partner to oversee. Dendreon is going to focus on the U.S. market. "

Gold on signing a partnership for Provenge or entertaining acquisition offers for the entire company:

"We are committed to commercializing Provenge ourselves in the U.S. and finding a partner outside the U.S. ... If someone puts an offer on the table for the entire company we have a fiduciary responsibility to consider it, but that's not how we're building the company or how we're planning on building the immunotherapy franchise.

I'm thinking a buyout offer of $300 a share seems reasonable. :-)

Even though myself and several of my friends and family bought DNDN in the single digits, I'm already regretting selling some shares at $25.

This is not a recommendation. Do your own diligence. Investing in equities are inherently risky, especially the volatile biotech sector. Good luck to all.

The FDA drug approval process

Clarity and purpose are very important to me: it is tough to make money in manipulated markets, and I try my best to teach people how money works.

That's why I divorce myself from politics: what the government is doing is more important to me than what our elected officials claim they are doing.

A stock like Dendreon was trading at $3 for a reason--market makers, hedge funds, analysts, and even big pharma companies manipulate the share price down via short selling--one would think they would want a higher price per share. For reasons I've gone to at length, they use the media to rig the markets into suppressing the share price. One analyst--the night before Phase III clinical trial results announcement, reiterated a $1 price target, when it had closed at $7.30 the day before. The next morning, in pre-market trading, it spiked up to $26. The shorts got wiped out and are scrambling to cover in a short squeeze.

A buy out offer just got that much more expensive for any big pharma suitors. In fact, the company is going to go at it alone, manufacturing and marketing the drug themselves in the US, and partnering with another company to penetrate Europe. Valuations from analysts now range between $40 to $300, as this immunotherapy for prostate cancer could potentially extend to cancers of the breast, kidney, colecteral, lung, head and neck, etc. Chemotheraphy companies had a stake in suppressing this technology as well, as they will be wiped out when this treatment gains traction. Couple that with a corrupt FDA with members on the advisory panel with admittedly conflicting interests, and it is no wonder 80% of drugs are rejected by the FDA.

Once in a while, a blockbuster drug comes along. In other words, just because a stock is $3 doesn't mean it stays there, despite darker forces at work. The key is to uncover value when you see it, against a sea of skepticism. Most of the time, the skepticism is warranted. But when it's not, it's a gold mine. I researched DNDN in February, before pulling the trigger just days before their pivotal announcement last week. No textbook or classroom is going to teach me that. The Street (Wall Street and Main Street) is still mulling over an imminent GM bankruptcy, toxic bank assets, bailouts, stimulus bills, yada yada yada. These were discounted into the markets 9 months ago. The funny part is just as the market is getting complacent about real estate foreclosures, a 2nd wave is about to hit more neighborhoods. In order to succeed in investing, look ahead and anticipate what the markets will do. Don't invest based on current events alone--that is looking in the rearview mirror.

Dendreon interview on CNBC

http://www.youtube.com/watch?v=wm4o1fYtCTQ