ARNA Update #2

All,
Arena has been taken to the woodshed, and firmly thrashed by -20% over the last two days. Data on Ralinepag, the pulmonary arterial hypertension (PAH), Phase 2, 22-week data came in. I think the data looks fine:

https://pulmonaryhypertensionnews.com/2018/10/04/ralinepag-s…

Since J&J already has a PAH drug, Uptravi, bringing in about $560MM, I would guess that Ralinepag could bring $200 - 500MM, which isn’t anything to sneeze at for a $2.0B company. Ralinepag is in Phase 3 testing.

Why did ARNA tank? I have no idea. Perhaps there’s little improvement over Uptravi. This is Phase 2 data for a consolation prize, and Phase 3 is where we get the first meaningful look at the data, so I don’t get this.

Estranimod is THE prize, and it uses, IMO, a validated medicine. For you stock holders out there put this one on the shelf and let this thesis works itself out.

Best,
bulwnkl

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bul,

I recently opened a small position in ARNA. Wondering if you think a lot of the news/excitement in the marijuana/CPD drink space has been what’s driven ARNA down a bit? I guess the logic would be that as marijuana/CPD products become more popular, we will have less need for actual medicines.

I think much of that is overblown, if it’s part of the reason for ARNA’s sell-off. This is probably a very very dumbed-down explanation. Sorry if that offends anyone.

Bottom link, we HAVE to expect big swings up and down on pharmas. That’s just the way it goes.

Lieberman,
I’m with you on wild swings with biotech, though the past few days has been wilder than most. I doubt CPD products relate to ARNA, but I really have no idea why the swing occurred. I couldn’t find any news that seemed to relate.

Best,

bulwnkl

Bulwinkle, thank you for posting this.

As Saul did, I bought a bit recently, based on your analysis last week.

Three questions:

  1. Do you think the reason the market is not buying en masse on the same publicly available information (and driving the price up) is because

a) is they have looked at the same information and drawn different conclusions - or
b) it’s more like speculation and mindless trading, before they figure the same thing out?

  1. If your thesis does NOT work out, do you think the other things Arena has up its sleeve would keep its valuation from plummeting much below its current price ?

  2. Speaking of which, I see the stock was up to $400 fifteen years ago (and then dropped), and at $200 12 years ago (and then dropped) - am I correct in assuming those spikes were due to speculation on things that did not work out, whereas if your thesis plays out, the value would be relatively impossible for the market to ignore (ie, then it was hope, this time it would be results)?

Thank you…

3) Speaking of which, I see the stock was up to $400 fifteen years ago (and then dropped), and at $200 12 years ago (and then dropped)…

Growth stocks are supposed to go up…

https://invest.kleinnet.com/bmw1/stats16/ARNA.html

I wouldn’t touch it with a ten foot pole. :wink:

Denny Schlesinger

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thx - yeah, it’s odd, this rec would seem totally inappropriate for this board :wink: (except Saul bought it, so…)

Which reminds me of my thesis, which is that the same ppl can look at the same evidence and be guided by the same rules, and have different results, in almost anything but arithmetic. It is clear that we are not as smart about intelligence as we think we are. Saul has innumerable times mentioned words to the effect of something didn’t feel right, or, I recall there was something about a “euphoric” call - for AYX I think it was.

So, I could try to convince myself I bought ARNA cuz of the cogent argument of Bulwinkle, but I suspect I was swayed by the cogent argument of Bulwinkle because Saul already had been.

–But I’m trying to think for myself, really…I am taking those ideas about about the continuous increase of all of those metrics for 12 quarters - and looking at stocks - I own, or am thinking about, outside of this thread - through that lens.

Of course, I tried it with ARNA, and…haha. NO, not a growth company, indeed. So, really, only relying on advice on this one.

BTW, does anyone know how to look at all 12 prior quarters of companies, as Saul recommends, automatically? Like, WSJ gives you 4 quarters or 4 years, as does Nasdaq. Is there a site that can show each quarter going back three years? thx

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BTW, does anyone know how to look at all 12 prior quarters of companies, as Saul recommends, automatically?

I usually go to the company’s website. Then there are two ways:

If they have an investor’s presentation they will often list at least the last eight quarters

But usually I go to their press releases, open the earnings releases one after another, and pull revenue, adjusted EPS, rate of growth, free cash flow, or whatever I’m following. It sounds difficult but it usually doesn’t take more than a minute, or two at most, per release.

I suspect I was swayed by the cogent argument of Bulwinkle because Saul already had been.

It’s not a good idea in general to buy something just because I have. I make lots of mistakes. I also change my mind without announcing it until the end of the month (if then). It’s best to do your own research and make your own decisions.

Saul

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BTW, does anyone know how to look at all 12 prior quarters of companies, as Saul recommends, automatically?

Not automatic but I like the NASDAQ website

https://www.nasdaq.com/symbol/arna/sec-filings

Denny Schlesinger

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BTW, does anyone know how to look at all 12 prior quarters of companies, as Saul recommends, automatically?

Automatic, but only eight: https://easystocknumbers.com

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