3SOF

Posted the chart on another VPHM thread but I'll post it here also.  We had a nice 61.8 fib bounce today.  Will it hold?  Time will tell. 

Worlds collided today.
We had several negative forces that started a total panic.

1) month long down-trend
2) bad-news (speculation)
3) friday-jitters
4) huge recent run up (generally speaking for a stock)

Those 4 factors caused a severe over-reaction I think, I would not be a bit surprised if this stock rebounds to the $15 level in the short term.

I am not sure what fair market value is on this stock, but it does not seem to me that just because generic drugs will be available sooner than expected, that this stock should be dumped in the toilett.

I have been reading recent news, and it sounds like their revenues are improving by leaps and bounds.  I think this huge sell off is going to spark a rally, once people do some research over the weekend.

I could be wrong, cause geez, the power of this downward movement is staggering, but emotion can sometimes overpower common sense.

Quote from: Jimbo on March 17, 2006, 05:08:07 PM
Michael,

I know you was going to add more shares at $18-$19 so after today's sell off VPHM should be even more attractive, right?

Since you like the company a lot I really would like to see your take when everyone else hates it.

Thanks

I second that proposal! Michael - are you still holding all your shares? Did you add to your position today or will you look to add next week? Thanks.   

Quote from: KCScott on March 17, 2006, 12:38:21 PM

Quote

Quote from: ncham on March 17, 2006, 12:31:37 PM
shouldnt AKN be flying on this news??

Good call - only up .07 with no volume

Something seems really strange - but with the losses I've piled up this year, I'm not gonna risk a play on either.

AKN bears watching though, if it starts a big move we'll know this OGD thing is real

AKN popped in the last half hour of trading with good volume. Looks like it could be a nice momo play next week. 

AKN 15-min chart:

Quote from: basonista on March 17, 2006, 05:16:55 PM
We had a picture perfect 61.8% fib bounce today at $10.35. Too early to tell if that is the bottom but it can't be a coincidence that buying was so strong at that level.  Last AH price is $11.30.

$10 zone is also the 200ema on weekly chart, and was also a pause point for the previous lift off back in August, so no surprise that it found a place to slow down there. Hopefully it will respect that triple support area. I won't be considering playing unless I see support actually being put in place consistantly rather than just following todays horrendous action (well horrendous for longs, good day for shorts). Good fundamental stocks can get trashed just the same as speculative no earnings type stocks.

Quote from: Loffigus on March 17, 2006, 03:15:11 PM
This has been a great lesson in why to use Stops.  I bought yesterday at 17.27 and my stop triggered at 16.17

And I thought I lost big!  It's amazing how much easier stocks will fall, than they rise.  Lesson Learned!

Smart move. Trading with plan, no emotion, no second quessing.

No doubt the company is good, but market changes so quickly and you have to adapt changing world.

When such thing happens, exit first, then do further analysis.

One thing I am certain that if a stock is in falling knife, its recovery will be very slow.

There are plenty of opportunities to take positions later.


Patient will win.

I did not own it lately.

I bought VPHM at Friday's market close and its up 3% afterhours! 

HERE'S AN UPDATE OF MY TAKE ON VPHM...

So the VPHM's unexpected bearish shocker last Friday left many talking and Cramer sticking a post-it note with VPHM on his forehead on his "Mad Money" TV show to admit his earlier bullish call was wrong.

Recap on Friday's news:

• Tiny drug firm Akorn and India-based Cipla announced development of a generic oral anti-infective agent speculated to be generic Vancocin.
• The FDA indicated that it is possible for a company to circumvent the bioequivalence study normally required for a generic drug, potentially speeding up a generic drug's time to market.
• In VPHM's case, Akorn and Cipla's generic Vancocin might enter U.S. markets now before the prior 2010 estimate if placed on "fast track."
• Vancocin sales accounted for $125.9 million of the company's $132.4 million in total revenue in 2005.

ource

The Bottom Line: News is speculative so freefall on Friday was based mainly on speculation alone. We still don't know when the generic Vancocin can become a competitor and how much faster the "fast track" process will take. VPHM's FDA petition is still under review. What we know though is that Vancocin sells are continually strong and will result in higher FY 2006 profits for VPHM.

My Take: If you haven't noticed yet, I'm clearly bullish and long on VPHM. Forbes.com also has an article about how Friday's action has created a good entry point and maintaining a price target of $28.

Quote"While there is technically a process through which bioequivalence may substitute for clinical trial data, we view such a route to be risky and less rigorous than the clinical trial route for a drug that addresses a disease that is increasing in both incidence and severity," the analyst wrote in a client note. "We do not believe that the FDA will allow a developer of a generic Vancocin to substitute dissolution studies for a clinical trial."

[R]ead it here.

But regardless, VPHM will most likely undergo turbulence as long as the news remain speculative. I look forward to finding out whether the generic is really a substitute for Vancocin, the FDA will approve the generic to be placed on fast track, and the new estimate of when the generic drug might enter U.S. markets if it is granted fast track.

I'm not going to say this isn't going to bounce on Monday... it might but I'm monitoring this stock for entry. I think there is a chance that it does a suf-style move and tanks another 20-30% monday. There will probably be downgrades, and I'm looking for reentry on tuesday/wednesday at around 7... Probably won't get it, but if I do I will be all over it.

g

I hope it bounces, but... that analyst comment you're posting has a financial relationship with VPHM, so of course he is going to say that. Also, when that comment originally came out the price was closer to $14, and VPHM said toward the end of the day that the FDA had indeed changed their testing requirements. Not good. In hindsight, it's probably not that great of an idea to own a biotech that had only one drug providing income. Hopefully their other drugs in the pipeline come through before AKN starts selling the generic.

another VPHM analysis; just FYI:
(I am torn between accumulating more or selling all my VPHM; will monitor VPHMs price action very closely )

Saturday, March 18, 2006
VPHM (Viropharma) Faces Generic Competition
On Friday March 17, 2006 Cramer wore a post-it note with ViroPharma's ticker on his forehead, admitting that his earlier bullish call was wrong. Cramer uses an approach to stocks that uses logic or rationalization to pick and stick with a stock. The way stocks behave is not always logical or rational from everyone's point-of-view, but technical analysis allows a more object veiw. I don't think Cramer understands technical analysis at all.

Friday VPHM (Viropharma) opened at $16.13 and dropped 36% to hit $10.35 as the LOD (low of the day). If you follow tradingmarkets.com's stock lists then you would have seen VPHM was rated at a 7 Friday March 17, 8:13 am ET. (http://biz.yahoo.com/tm/060317/14061.html)
Looks like it didn't outperform the market as a rating of 7 would indicate. Not sure what criteria they use to come up with those ratings.

Here's what happened. A few months back there was a rumor that an Indian company was going to try to produce a drug very much like VPHM's Vancocin drug, which is its only source of revenue currently. At that time the stock dropped, but then recovered because of the number of years it would take and FDA barriers the Indian company would have to overcome to get that drug to market. That's all changed according to analyst Joel Sendek who said, "The U.S. Food and Drug Administration indicated that it is possible for a company to circumvent the bioequivalence study normally required for a generic drug. This would potentially speed up a generic drug's time to market." Therest of the article:
Market Scan
ViroPharma's Generic Worries Create Attractive Entry Point
Peter Kang, 03.17.06, 1:10 PM ET
Lazard Capital Markets maintained a "buy" rating on ViroPharma as shares of the drugmaker were hit hard on worries of generic competition for its anti-infective agent Vancocin.
The U.S. Food and Drug Administration indicated that it is possible for a company to circumvent the bioequivalence study normally required for a generic drug, according to analyst Joel Sendek. This would potentially speed up a generic drug's time to market.
ViroPharma shares plunged 32% in Friday's trading session on volume more than 30 times the stock's three-month daily average. The decline comes on the heels of an 8.5% drop yesterday. Sendek is skeptical the FDA would grant such a waiver for a generic version of Vancocin. "While there is technically a process through which bioequivalence may substitute for clinical trial data, we view such a route to be risky and less rigorous than the clinical trial route for a drug that addresses a disease that is increasing in both incidence and severity," the analyst wrote in a client note. "We do not believe that the FDA will allow a developer of a generic Vancocin to substitute dissolution studies for a clinical trial."
"However, we recognize that based on the bioequivalence guidance provided to us by the FDA, a generic Vancocin could enter the market earlier than our previous estimate of 2010."
As shares continued to fall Friday, ViroPharma issued a statement in opposition of a potential waiver. "We will vigorously oppose [this] attempt to radically restrict the data on which the FDA would make vancomycin capsule bioequivalence decisions," the company said.
Sendek reiterated a $28 price target on the stock. "Recent price action creates an attractive entry point," he noted.
Recently, tiny drug firm Akorn and India-based Cipla said they reached an agreement to develop a generic oral anti-infective agent that analysts speculate could be generic Vancocin. Akorn could not be reached for comment.
The company that wants to produce the drug is Cipla (based in India), and they have contracted Akorn to help them develop the drug.

VPHM did file a Petition for Stay of Action with the FDA, did recently stock up on cash, paid off all their debt, and are producing more Vancocin which will bring them more money. This cash will allow VPHM to finish development on their CMV and Hepatitis C drugs, but it could be next year before they get FDA approval of at least on of those drugs.
Until VPHM gets drug approval I would just leave this one alone. The stock has been hurt so badly with this drop in price, I'm not sure its worth the risk right now to even try trading VPHM.

link: http://strades.blogspot.com/

I wonder where is Michael at... Michael, are you still holding VPHM or you bail out & took ur profits?

VPHM is in a very bearish situation right now..
1) Price broke the MA50 in the downside .. <--- if i'm in @ VPHM i'll be thinking an EXIT strategy at that level.
2) Now price broke the MA200 & EMA200 in the downside (BIG TIME)
3) Bears are in control of this stock since price broke the MA50...it's gonna go down more I think
4) Never trade with the weaker, always trade with the stronger.. in this case bears prevails.

Good point ncham.

I'll keep close watch at market open on Monday. A generally bullish market day will help VPHM as well. Good luck all!

Quote from: Jimbo on March 17, 2006, 05:08:07 PM

Quote from: Michael on February 15, 2006, 02:36:20 PM
Hmmmm.... my last message was too cheap so let me elaborate a bit.

VPHM's forward PE is 17.26.

They will be debt free in the coming months

They are growing earnings at a rate that leaves big pharma's in the dust.

They have a quite interesting pipeline with one drug that has just been given fast track status

and you are selling 

VPHM only has one problem. It has increased too fast over too short a time.

Show me any other pharmaceutical company that has this kind of track record, pipeline, PE etc. and I will be on the buying side. (I will however also still buy more VPHM - these kind of opportunites don't show up too often!)

Mike

Michael,


I know you was going to add more shares at $18-$19 so after today's sell off VPHM should be even more attractive, right?


Since you like the company a lot I really would like to see your take when everyone else hates it.


Thanks

One thing I believe, I think Michael hates this stock now @ this point of time

As you can see, on the weekly chart of VPHM... ADX Rallied above (VPHM got OVERHEATED) it's a sign that you have to take your profits & get back in later @ better price

Same thing as DIET, the ADX rallied & stays above for quite awhile. but be aware there is gonna be a profit taking....  After they released their earnings DIET dropped like a rock, people bought at 7.50 & above they got toasted of the overheating DIET