Talk:CV Therapeutics, Inc. (CVTX)

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What do you think about this company? If you have general comments, add a reply to this section by clicking the [edit] link here ----->

ValueSpider 18:54, 27 November 2006 (PST)

Ranexa's future

I have been debating watching the stock for a while and deciding whether to get in or not. The stock at this point is pretty much a call option for Ranexa's MERLIN study. Since the stock has been creeping up almost 40-50% leading to MERLIN study report expected soon, maybe the market is expecting good news. Also the company's follow on offering did well late last year, and the stock price didn't drop significantly considering the dilution. But the number of shares short (almost 29% of float)[1] makes me nervous on the other hand. Well, latest quarter Ranexa sales surpassed Wall Street's (reduced) expectation, which may contribute to the stock appreciation a bit. But I am still debating whom should I believe, the long or short guys. Any opinion? I know a lot you biotech folks are watching this stock as one of the few significant industry binary events in the near future.

-- K Hartandi 16:15, 2 February 2007 (PST)

Yesterday, there was a nice article written by Mr. Jason Shade at SeekingAlpha. It provided a brief history of the stock and some bullish facts about the stock, like its recent 30% plus appreciation and the increased institutional holdings by Wells Fargo and Goldman Sachs. However, I just want to play a little devil's advocate a little bit.

Now that we know for sure that we will get more details about MERLIN clinical trials data on March 27 at American College of Cardiology Annual Scientific Session [2]. Investors are starting to line up their bets both ways. In addition to the price inching up, I notice that the short interest and corresponding days to cover has been inching up too, as Mr. Shade noted. [3]

I am personally more on the skeptical side about Ranexa. I think the MERLIN trial data will be quite positive. However, a good clinical trial data is not a guarantee for FDA approval these days, especially for a "not so" life threatening condition. Just ask any Pharma/biotech company that filed any New Drug Application (NDA) after Vioxx brouhaha. And I think Ranexa has a high bar to clear to get the FDA expand its label despite its Qt prolongation problem that may cause it to trigger heart arrhythmia, especially givent he fact that Ranexa is used to treat heart condition. While Ranexa is first in class, there are other alternatives for angina patients. MERLIN study result has to be squeaky clean to appease investors' expectation and to have a chance that FDA would expand its label. Even then the regulatory approval itself will not happen until at least 6 months after the data is released, and nothing is guaranteed until then.

I also looked at Regadenoson, the company's latest product in development. The stock appreciated a bit after positive data about this drug was released back in December. However, I think the value of Regadenoson is small compared to the company's value. Regadenoson would is pretty much a follow up to Astellas' Adenoscan, a $300 million drug whose patent is expiring soon. However the Phase 3 study only demonstrated that Regadenoson is comparable to Adenoscan, not vastly superior or more advantageous. Therefore, I am skeptical that the drug will become a blockbuster especially when it has to compete with cheap generics now being developed by Teva (TEVA) and the likes. I couldn't find free public information about Regadenoson market estimate, but givent he facts above, I think it will achieve at most $100 million annual peak sales.

I think given the company's cash position as of Sept 06 was $390 million, compared to about $750 million market cap, shorting the stock will only give limited payoff. The company should burn about $70 to $80 million in the 4Q'06 mainly to pay for MERLIN study. however, a really clean MERLIN data should give the stock some boost in March, but the huge potential payoff will not come until FDA action later this year or early next year.

--K Hartandi 16:58, 7 February 2007 (PST)

3/26/07 DB Downgrade and Selloff

Today (3/26/07), Deutsche Bank analyst Jennifer Chao downgraded the stock to sell from hold and set target price of $2. The stock plunged $1.82 or 21.2% to close at $6.75. This is the second time DB downgraded the stock. The same analyst downgraded CVTX from buy to hold after company's disclosure of Ranexa "top line" or summary data from the MERLIN clinical trial data that the drug is ineffective at treating acute heart condition or heart attack. However, the same trial also shows that Ranexa is safe, which could help Ranexa to be approved as the first option to treat chronic chest pain or angina, for which the drug is approved to be used, but only as the last option.

It is interesting that this latest DB downgrade actually comes a day before the full trial data was to be presented at American College of Cardiology for its 56th Annual Scientific Session in New Orleans. Ms. Chao of DB expected that the full data will be even more negative than the market had expected. I don't have the full report, but I find this downgrade a little surprising (or suspicious?) especially that later in the day, analysts from Lehman Brother defended the stock and kept his target price at $40. So does DB knows something that others don't? How did traders follow her "outspoken" recommendation? Well, we'll find out tomorrow when the full data is presented I guess.

And oh, I do still have open position in CVTX. --khartand 16:00, 26 March 2007 (PDT)

Followup on 3/27/07, the full presentation on Ranexa's Merlin trial is out. Well, in my opinion there was no real surprises. It was consistent with the company's earlier release. While the drug does not effectively treat acute coronary syndrome or heart attack, in long term it does reduce incidence of ischemia. More importantly, the trial shows that the drug doesn't cause heart arrhythmia due to its Qt prolongation effect, which may support the company's case to the FDA to broaden Ranexa's label to allow it to be used first line for chronic angina. While I agree with Jennifer Chao of DB that the bar for this will still be high, but the news is not as apocalyptic as she forecasted the day before. I think the short term catalyst for the stock will be if Ranexa prescription will pickup as result of the trial and in the long term FDA action to let the drug be used as earlier option for chronic angina treatment. The stock may bounce back a bit, but I think Lehman's $40 target would be hard to achieve.

--khartand 17:10, 27 March 2007 (PDT)

Mad about Mad Money (DNDN redux?)

So on Friday (6/15/07), Cramer revealed his speculative bullishness on the stock, and CVTX shot up more than 5% on Monday (6/18). Read the BHI blog link above for details on Cramer's thesis, speculating on everything from acquisition to Ranexa's potential as diabetes drug. I think the nearest term driver for the stock is still Ranexa prescription number and potential label expansion (removal of the black box warning). I think diabetes potential is intriguing. The data has been there for a while, but I wonder why the company's not pursuing clinical trail for diabetes indication. Yes, the company is financially constrained, so diabetes clinical trial can be really expensive, but CV could seek a partner for that indication. I don't know... I liquidated my position in CVTX a while ago, but I am watching this latest developments with interest. I am wondering if anyone knows Cramer's overall biotech track record (DNDN was the first that came to mind). Anyways, one thing for sure, people are listening to this Jimbo dude, booyah. Also, check this out!

--khartand 11:04, 18 June 2007 (PDT)

Takeover Rumor

Wow there has been a lot of excitement with this stock recently. After a pop yesterday allegedly because of our dear friend Jim Cramer, today (June 19) the stock is up another 6% at the time of writing, due to takeover rumor. Well, while a rumor is a rumor, I think this one is not unexpected, since an activist fund, Third Point, LLC run by Daniel Loeb owns about 9.9% of the company. Watching developments closely.

And oh, I have no position in the stock.

--khartand 10:42, 19 June 2007 (PDT)