Crash!

Wow – afternoons are becoming my least favourite part of the day! When I posted 50 minutes ago the portfolio was down about 2%. Here we are at 4pm and it is closing down ~4.1%. Feeling the impact of being 50% leveraged on a down day

3rd worst day since starting to record results on this site. Worst day since September 26th, 2012 when PATH dropped 26% on the announcement of a private placement and the portfolio fell by 6.8%.

NBI and NASDAQ are also closing poorly today.

Everything here at BL is red today. It is interesting to note, however,  that all of these stocks were strongly positive at one stage during the day:

Change based on today’s close Change based on today’s high
DEPO -1.46% 2.64%
DCTH -3.80% 0.00%
NAVB -4.19% 0.97%
DARA -6.09% 1.74%
TSRX -0.36% 2.92%
KERX -0.74% 3.10%

 

Update

No changes to things since getting out of RPTP last week. Bit of a grind though. The portfolio value reached new highs on Friday morning (2/15) at which time it was up about 2%. In the afternoon things collapsed and we ended the day down 0.15%. Yesterday was similar – up in the morning then a fall off in the afternoon. Today has been nasty since the bell. DARA has lead the fall dropping so far today by 4.4% to $1.10 (at them moment).

For posterity, here are the charts for the portfolio constituents as of this afternoon. NAVB is certainly giving me some pause…

DEPO

 

 

 

 

 

 

DCTH

 

 

 

 

 

 

NAVB

 

 

 

 

 

 

DARA

 

 

 

 

 

 

KERX

 

 

 

 

 

 

TSRX

 

 

Sold RPTP

I got out of RPTP this morning when it spiked – out at $5.19. It really has been a mess this year. I closed half of my position in December at $6.02. Have had many opportunities to get out since then – today I finally lost patience.

RPTP

Getting boring now

3 red days in a row – and they have been escalating (-1.1%, -1,9%, -2.6%). I have had 12 streaks of 3 or more consecutive negative days in the last 14 months. Only 5 of these streaks have persisted beyond 3 days so hoping that Monday will see a reversal of fortunes. DARA and DCTH led the charge south today.  Only TSRX was positive.

I have 7 holdings at the moment which is the most I have had in quite a while. Probably making me feel a bit exposed. Looking forward to resuming a northerly course.

Down day #2

Down 2% today. Everything was in negative territory – DEPO, NAVB and RPTP were the worst offenders. Added 2 positions (KERX and TSRX). Hopefully the blizzards hitting the East Coast of the US tomorrow will put a halt to the downward tumbling.

Still up 11% on the year – the drawdown after the last 2 days is 3.7%.

Adding TSRX

I added TSRX at $5.18.

Trius Therapeutics (TSRX) is developing antibiotics. Its lead candidate is Tedizolid Phosphate which is being developed for use in acute bacterial skin and skin structure infections (ABSSSIs).

Tedizolid is a second-generation oxazolidinone. The first-generation oxazolidinone, linezolid, is marketed by Pfizer and has estimated revenues of $1.3B per year. Tedizolid has some potentially beneficial characteristics including: once-daily dosing, a shorter course of therapy, and better safety profile.

TSRX published the results of its first phase-3 Tedizolid trial (ESTABLISH-1) in December 2011. The results showed the drug meeting the primary end-point of establishing non-inferiority to linezolid when assessed by early clinical response. In addition, the drug met all of the secondary efficacy outcomes.

Trius commenced its second phase-3 trial in September 2012.  The trial concluded at the end of the year and preliminary results are expected in March. Assuming a successful trial an NDA submission should follow later in the year.

Within the last year the company has traded as high as $6.40. It closed today at $5.20. It is well funded following a secondary offering in January, which precipitated a drop from $5.42 to $4.90. It seems that there is room for some appreciation ahead of the final pivotal trial for an antibiotic with significant market potential.

TSRX

Adding KERX

I added Keryx today at an entry price of $6.67.

Keryx is developing a drug, Zerenex, for use in end stage renal disease patients (ESRD) who have elevated phosphorous levels (hyperphosphataemia). On January 28th KERX announced results from its phase three trial for Zerenex. The trial showed a statistically significant improvement phosphorus levels compared with a placebo in ESRD patients on dialysis. The drug also improved iron levels, reducing the need for intravenous iron and Erythropoiesis-Stimulating Agents.

Following the announcement the company’s share price advanced from $3.43 on Jan. 25 to a high of $9.98 on Jan. 31.

The company announced a public offering on Jan 30th at a price of $8.49.  On Feb. 1st a research firm (IPD Analytics) issued a report claiming “it is unclear whether Zerenex will qualify for New Chemical Entity (NCE) exclusivity or a Patent Term Extension (PTE) on one patent that covers Zerenex.” KERX has a patent on Zerenex that will block generic competition until 2017. The issue is whether they have the ability to extend that protection.

IPD claims that a previously approved product (Ferriseltz – a contrast agent) is close enough in structure to Zerenex to rule out the potential for NCE exclusivity. The Patent Office however can choose to grant PTE even in the absence of a NCE designation.

The share price seems to have found support at ~$6.55 – 35% off its recent high. It seems therefore that the market has absorbed the exclusivity issue and reduced the share price accordingly. With time there is a good chance that the price will see some upward movement based on anticipation of: refutation of the IP issues, news of a deal with a marketing partner, submission of the NDA.

KERX