3SOF

so david! your selling price for VPHM is $48? WOW....

analysts update:
Piper Jaffray analyst Thomas Wei responded by raising his price target for the stock to $18 from $16 and maintained his "Outperform" rating.

"Because Vancocin still represents a very small product in hospital/insurance formularies and is used to treat severe disease, we do not anticipate significant pushback from payors," Wei said in a research note. "We have conservatively assumed that the wholesalers will begin buying Vancocin at the new higher price in early September, similar to the buy-in period allowed in April for the previous price increase."

Wei increased his 2005 earnings per share estimate to 54 cents from 46 cents, on revenue of $109 million, up from $102 million. The analyst also raised his 2006 earnings per share estimate to 90 cents from 72 cents on revenue of $148.8 million, up from $128.3 million. He also boosted his 2007 earnings per share estimate to $1.06 from 91 cents, and his revenue forecast to $166.7 million, from $145.7 million.

Joel Sendek, an analyst with the investment firm Lazard Capital, maintained his "Buy" rating and $17 price target on the stock.

In a research note, Sendek raised his 2005 earnings per share estimates to 87 cents from 83 cents on sales of $111.2 million, up from $106.8 million, but did not change his estimate of 72 cents per share for 2006.



personally I appreciated more Davids price target

hi,
thanks for the great picks david and others,
do you think we will see a lot of profit taking today? or is it "straight to 48!"
thanks
maxi

Quote from: David Randolph on August 16, 2005, 07:22:38 PM
What do I see? A gap filler, VPHM is filling all those opened gaps from the past.

And the next one will only be filled at $48 a share

Hello, can someone educate me on this?  What is the driving force to fill gaps?  Why must gaps be filled?  What is the psychology behind this? Thank you.

Fish

Hi Fish,

A gap is a trading range where the stock have not been traded. If you look at the chart below you will see that VPHM in the start of 2000 closed at 48 and the next day opened at around 15. No trade was made between 48 and 15.

The theory goes that gaps will be closed (I guess because there is no trades there is very little resistance (or support) but there might be some TA guys who can give the "real" explanation.

To be honest I have never seen a gap of this magnitude been closed. Normally gaps are closed over a short period. It would be nice if that would be the case for VPHM as well but it is a hell of a gap

VPHM
Well i scared myself out this morming at 13.50 which is a 37% jump from my 9.85 buyin on Fri.l will be watching this one for any price weakness as they have a great story.
Virg

So many great posts and I get to VPHM so late ... but I always try to follow the order of the buying date, as it shows on the 3 Stocks on Fire page, so the last stock bought is the last to be analyzed.

I want to send regards to Michael, who even in Mozambique takes the time to come here, talk a bit about VPHM and give a theory about gaps, amazing, thanks a lot !

Some years ago I heard Mozambique was launching a stock exchange, did they? Maybe some good investment opportunities there, now that the country is at peace. Amazing how just 31 years ago Mozambique was still a Portuguese colony ... we were at war with them from 1964 to 1974, when the democratic revolution in Portugal opened the doors to the end of war and decolonization. Tell me something Michael, there's more people in Mozambique of Sporting or Benfica? (these are Portuguese football teams, they have a lot of fans there).

Well, where was I? VPHM? This late?

VPHM had a day of profit taking. Volume was lower, the fall didn't damage the short term technical picture (at all - in fact, the stock held above $13.39, the previous intraday high, which is positive).

$48 is a 12 month target. Many positive surprises from VPHM may make the stock jump further than the $28 Michael projected, based just on Vancocin.

Of course, no respectable analyst (talking about those men from the brokerage houses who upgraded VPHM) could say «VPHM is going to $48», he just can't.

And no respectable analyst is able to have a 50% plus a year average performance, he just can't.

It takes a bit of insanity, wild dreams mixed with rigid discipline to achieve that 

And the ability to change views ... so I beg for no one to come and say «you said the stock was going to $48» if I have to change my mind and sell at any price. At this moment my belief is the stock will run up to $48. I belief in my beliefs as long as the market believes them too 

Hi, Dav:

  About the gap in April 2000, It closed at $71.75 on April 10, 2000 and on April 11, the high was $28. Where is the $48 to $15 gap?

  I got the quote from yahoo finance

Good question shawfund!

Maybe David did the same mistake as I did and just looked at the longterm chart without going into the details. The devil is in the details and you are right the gap is between 72 and 26.

So David are we talking about a different gap or are we raising the target to 72

First lets consider that gap issue:



You're right, the gap was from a low of $64 to a high of $28. But, another gap, the $47-$48 gap is the real deal on VPHM:



You see, the stock never traded between $47 and $48. It had a reversal island above $48 so expect a lot of resistance at the $48 level. I believe the stock will go there because being quite above $12.32 I see no significant resistance to the advance until $48 is reached.

Fundamentals warrant a bigger rise and you know how the market usually gets ahead of itself ... A market behavior like VPHM is showing won't stop at fair value, it will go to overvalued, possibly a lot. It's the overshooting of the fundamental turnaround.

But let us analyze this day by day, candle by candle:



Not even in your dreams you could see a chart more bullish than this. I have a 50% profit in just 5 sessions and it doesn't cross my mind selling now, that would be a crime !

Pleaseeeeeeee, let's hope you are right!!!

After today's candle I'm thinking of adding to my position tomorrow.

Hey David, seems like your getting more famous by the day, they already start quoting you!
http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=7077380&tid=vphm&sid=7077380&mid=48408

To reach Davids $48 target we need a little help from Viropharma's pipeline! So let me try to give some insight to the three drugs which constitutes their existing pipeline: Maribavir, Pleconaril and HCV796.

Maribavir is a drug for the treatment of human cytomegalovirus (HCMV) disease. You will probably be surprised to know that you most likely suffer from HCMV.

Cytomegalovirus is a common virus that infects people of all ages and in all parts of the world. In the United States, between 50% and 85% of adults will be infected with CMV by the age of 40. However, in many other countries most people acquire CMV as children or adolescents. Most infections with CMV are "silent," meaning the person infected has no signs or symptoms.

CMV is a real problem for people infected with AIDS, people who's immune system has been suppressed due to organ transplants and for babies who's immune system is not fully developed.

Maribavir was in development by GSK for the treatment of CMV retinitis in HIV+ patients. VPHM acquired the exclusive worldwide rights (excluding Japan) to develop and commercialize maribavir for the prevention and treatment of cytomegalovirus infections related to transplant (including solid organ and hematopoietic stem cell transplantation), congenital transmission (infants), and in patients with HIV infection.

VPHM advanced maribavir into phase 2 clinical trials in patients that have undergone allogenic stem cell (e.g., bone marrow) transplantation in the third quarter of 2004.

It is difficult to estimate the market for Maribavir. The HIV market is obviously the largest but here affordability will be an issue.

The transplant market is smaller but VPHM has focused on this segment. In the U.S. alone, there are approximately 9,000 stem cell transplants, and over 23,000 solid organ transplants on an annual basis.

Finally there is the market for newborns effected with HCMV. Approximately 1% of newborns are infected with CMV. Most of the infected infants will be symptom free; however 10% (about 4,000 infants each year) may have one or multiple abnormalities.

I will not try to put a figure on the revenue potential as it really depends on the side effects of the drug compared to existing drugs on the market (these drugs are quite toxic!!!) but the potential is significant (Higher than Vancocin).

Pleconaril is a cure for the common cold caused by the rhinovirus. I don't think this disease needs any further introduction! According to a 2003 study, the U.S. population suffers 500 million colds a year, at a cost of $40 billion.

Pleconaril works wonders against many, though not all, rhinoviruses. But three years ago, the Food and Drug Administration decided not to approve it, in large part because it seemed to reduce the effectiveness of birth control pills. The new spray seems to resolve this problem and the drug might be on the market as early as next year according to Newsweek.

VPHM has signed an agreement with Schering-Plough and received an initial license fee of $10 million. VPHM will receive further $65 million in Milestone payments. VPHM will in addition receive royalties for the sales of the drug.

If anything can spark a real buying frenzy of VPHM's stock it is probably Pleconaril. Here is a story that can sell newspapers and the publicity and excitement will be huge.

HCV796 is a drug against Hepatitis C. It is estimated that there are at least 4 million Hep C patients in the USA with 175 million worldwide. Current treatments cost about $30,000 per year per patient and are very ineffective. HCV796 is only in phase I but the initial results seem very positive. There are several drugs under development against Hepatitis C so it is again difficult to estimate the market for the drug, but it could be as high as $2 to $3 billion (if not higher depending on the worldmarket!)

As mentioned earlier we should start to see news on all three drugs during the coming 4 months. As always with Biotech stocks the news can be both good and bad. In the case of VPHM I am not so concerned about bad news as it seems like investors are not valuing the stock based on the pipeline but only on the cash flow from Vancocin. Good news on the other hand can really put this stock on fire

Will the options action push this down today?