RGEN

[stock-kitty]

I have done a little reading on this company in their latest 10Q. 

From what I have found so far is that they have about 30M in cash and show growth. But what I also found interesting is that they have filed a lawsuit against IMCL re a product called Erbitux in which Repligen lays claim to the original cell pathways (not sure what it is all about but I have only just started my research), but when we hear more on this lawsuit I think this stock will move up.   

Currently I view this company  as a low risk/high reward stock not only because of this lawsuit but due to rising margins and sales going forward.

[stock-kitty]

Nice break-out 

Something else I found that could be another catalyst besides the patent infringement with IMCL.

It looks like RGEN has also filed a lawsuit Bristol Meyers over CTLA4-Ig for Autoimmune Disorders.

Repligen owns the exclusive rights to an issued U.S. patent that covers the use of CTLA4-
Ig for the treatment of various autoimmune diseases including rheumatoid arthritis and
multiple sclerosis. This patent will remain in force until 2021 and also covers a method of
treating rheumatoid arthritis, multiple sclerosis, lupus and scleroderma with CTLA4-Ig
alone and in combination with other immunosuppressant drugs. Additionally, we own the
exclusive rights to a European patent with substantially similar claims that will remain in
force until 2013. Repligen owns the exclusive rights to these patents through a license
agreement with the University of Michigan and through a Cooperative Research and
Development Agreement with the United States Navy. These patents are independent of
the patents on CTLA4-Ig that were the subject of a lawsuit that Repligen and the
University previously prosecuted against Bristol-Myers Squibb Corporation.
Bristol-Myers Squibb Corporation presented positive results from two Phase 3 clinical
trials of their form of CTLA4-Ig at the annual meeting of the American College of
Rheumatology in October 2004. Bristol has disclosed that they completed filing a New
Drug Application for CTLA4-Ig in rheumatoid arthritis in March 2005. The FDA has
granted CTLA4-Ig (AbataceptTM) Fast Track Designation. Bristol anticipates launching
AbataceptTM by the end of 2005.

[stock-kitty]

>>do you believe RGEN will continue to earn $2m profit per quarter.
if so it could double.<<


Daniel

Here is some speculation since we don't know anything for sure....   RGEN has the use patent for CTLA4 (drugs name) while BMY has the composition of matter patent but it expires in 09-11.   RGEN doesn't expire until 2021 (it was issued last year) so BMY can extend patent protection for 10-12 years by doing a deal with RGEN for 3-5% of sales a year wich is 30-50 million a year.


Cheers

[Melf Elf]

Applause to Stock-Kitty for fundamental analysis on RGEN.

Daniel,

I'm responding to your question in this folder so that we can keep comments together.

The July 27 gap up opening on earnings is a good example of a "Gap To Crap" vs. a "Gap And Go" Breakaway Gap.  Often, it's difficult to tell which it is when a stock is called to open higher, but it helps greatly to make that determination if the stock is gapping out of a pattern, or gapping above resistance (or below support).

In this case, you can see from the chart below that RGEN gapped higher at the open on July 27 less than one penny above the Symmetrical Triangle.  There never are any guarantees, but that was a very good indication that the gap up opening would be a "Gap And Go," not a "Gap To Crap."  The HUGE volume that came in during that day's trading also was another strong indication that it was a "Gap And Go" Breakaway Gap.

Targets are then derived from the breakout (see chart below).  Target #1 (3.95) was MADE yesterday for a 49% gain for anyone who bought the July 27 open of 2.65. 

Too bad we weren't watching 

Next post, I'll discuss where we are now.

[fill_the_gap]

Pure gamblling with very high risk any time something is up to a decision.
Especially in Biotech with Bristol-Meyers.

Either way up or way down before you can decide.

[Melf Elf]

Daniel,

I changed my mind.     Let's look at the bigger picture first (weekly chart).

This is the Ichimoku chart which, in addition to the usual chart patterns, helps you to see "at a glance" what the trend is.

1. After the H&S top completed in October, 2003, we can see "at a glance" that RGEN also closed below the Kumo (cloud) in December, 2003.   The Kumo (cloud) is the vertical green (or red) lines.

2. The inital rally off the July, 2004 low of 1.22 ended with the stock "getting stuck in the cloud," so to speak, in January, 2005, and it sold off to what became the bottom of the Symmetrical Triangle.

3. The July 27, 2005 Breakaway Gap also was the first close ABOVE the Kumo (cloud), suggesting a change in trend from bearish to bullish.  Sometimes stocks go above and below the Kumo (Cloud) in a meaningless fashion, which usually indicates that there is no trend. 

In this case, the stock closing above the Kumo occurred on a breakout of a year and a half long Symmetrical Triangle pattern, suggesting that there's a good chance of upside targets being achieved.  RGEN got to Target #1, the top of the Symmetrical Triangle at 3.95, in just under one month.

Okay, next we'll look at the chart since the July 27 breakout.

[Melf Elf]

Daniel,

We know that RGEN is acting bullish because it broke out of an intermediate-term pattern (the year-and-half long Symmetrical Triangle), and we have confirmation that the Breakway Gap breakout was as bullish as it looked because Target #1 (3.95) was achieved in under one month, which produced a 49% gain from the point of the breakout. 

Short-term, we're looking at a Bearish Wedge pattern, we've got a negative divergence in MACD, and MACD is ready to go below the signal line on a selloff.  We also have 5 hits to the top of the Bearish Wedge pattern, so that's been validated as resistance.

You're entry of 3.75 is problematic because you're long near the top of a Bearish Wedge, and if RGEN doesn't soon breakout above the pattern, it's looking technically vulnerable to a selloff.  That doesn't mean that it won't go higher after a selloff, but I say that it's problematic because you've got to decide how much risk you're willing to take in case it doesn't.

What I'd suggest is that you decide on a stop.  The chart is acting bullish, but you want to protect yourself and limit your risk to something that you find acceptable. 

I've drawn two trendlines at the bottom of the Bear Wedge.  The first is a trendline off the breakaway gap day.  The second (dotted red line) is drawn of the reaction low after the breakaway gap.  Neither one has been validated with a "third hit."  Those trendlines currently are at about 3.15-3.20, so your risk on a stop out is a loss of about 16%. 

The last low was 3.04 on August 17.  If you use that as a stop, the risk is a loss of about 19%. 

If RGEN goes all the way back and fills the gap at 2.44, you'll be sitting on a paper loss of 35%, and you're also back below the Symmetrical Triangle, which would negate the bullishness of that upside breakout, in my view.  That's a situation that you probably would prefer to avoid.

I put what I think is an "eliteG G-spot" on the chart in case he or someone else has a comment on that.  After RGEN rallied on HUGE volume, it sold off for a few days, then rallied beyond the "G-spot," so it would seem to qualify.

Good luck with all of your trades, Daniel!     

[REALDEALS21]

Rgen is sometimes just a MOMO play !

[Melf Elf]

last note:  On September 6th BMY is supposed to get nofication as to whether its new drug will be approved.  That new BMY drug supposedly uses RGEN's patent and may require BMY to pay RGEN a royalty.  This would be huge news for RGEN and could send its stock into the clouds.
I sure hope that is what happens.

That would be nice, Daniel.  Thanks for the information.  Applause.

The way that might play out, technically, is for RGEN to break out above the Ascending Triangle.


EDIT: I added the target incorrectly.  Should be 6.68.

[rabidmonk]

Hi Rocket,

No need to panic about your entry point just yet... the long term TA hasn't hit the pegs -- so IMHO you'll see a nice spike between 4.38 - 4.98

The PPS "WILL" have to bounce off that lower trend line at about 3.65 for this perspective to materialize though... it can't go any lower than that over the next few days is my best estimation for the bounce into the spike.

That converging wedge is getting awfully tight. The bounce into the spike might very well happen tomorrow if it pings off that trend line or goes ahead and runs from here.

Take a look at END and you'll see a very similar short term (60 day) wedge with the spike that I make mention of. That spike happened this morning, and being an oil stock, anything goes with END, but under normal circumstances I would abandon ship when those rascals paint the charts!    You just might want to consider getting on the side lines when RGEN blows past that upper intermediate term trend line.

Hope that helps! Regards, Rabid

[rabidmonk]

Well, it looks like it bounced off of 3.64 about twenty minutes after my last post.  I think it will continue to bounce up that lower trendline, and then will have one big push into the spike. Keep your eyes open for an unexpected big gap up some AM.  Can't tell ya what to do, but I can tell ya that I'd personally look to dump it on a significant gap.   

Good luck!  Rabid

[rabidmonk]

Thanks for the confidence, but remember -- each trader has to do their own DD and analysis --

I like this forum because there are so many disparate ideas and views -- always a new perspective, and something to learn from those perspectives...

I hope this indeed plays out profitable for you! Please. Do live with it in the cross-hairs until it resolves...

Rabid

[Melf Elf]

what is the difference between a BEARISH WEDGE and an ASCENDING TRIANGLE?
isn't one positive and the other negative?  how does one tell the difference?

Daniel,

Here's a link to Stockcharts.com Chart School, which explains both patterns and many others.

http://www.stockcharts.com/education/ChartAnalysis/index.html

knowing there is a "fundamental company event" next week... how would this affect Technical Analysis (TA) ?

I had difficulty figuring out how to answer that question, I think because it's more a case of "what are the technicals as we approach the fundamental company event?" 

Let's go back and look again at the chart ahead of July 27 earnings, a fundamental company event.  What did we know from the chart?  We knew that RGEN was in a year and a half long Symmetrical Triangle formation.  Did technical analysis tell us which way the triangle would break?  No.  The chart only told us where the converging trendlines were.  The upper trendline was at 2.642 when earnings were released.

RGEN gapped up and opened at 2.65 on big volume.  Now the chart/technical analysis has told us something.  The chart was "ready," having formed that big Symmetrical Triangle pattern, and at the open, we found out that good earnings news produced a bullish technical breakout.   That was a nice marriage of bullish fundamentals and bullish technicals, and it resulted in a "Gap And Go" to the 3.95 technical target.

Ahead of the September 6 fundamental event, what are we seeing in the chart?

1. All of the action since the July 27 earnings news is a Rising Wedge, which is at least short-term bearish if the lower rising wedge is broken to the downside.  If RGEN closes above the top of the wedge, it's bullish.

2. The Symmetrical Triangle pattern on the chart below potentially has "morphed," or "changed into" an Ascending Triangle, bullish on an upside breakout (see the Ascending Triangle chart that I posted yesterday).  The top of an Ascending Triangle pattern is flat.  3.95-3.97 in this case, bullish on an upside breakout.

So, ahead of the September 6 fundamental event, we know the "lines in the sand," so to speak.  Let's say that today is September 6, and news is out that BMY will pay royalties to RGEN that will add substantially to RGEN's bottom line.  RGEN is indicated to gap higher at the open.  BID 4.00...ASK 4.05.   

Is the chart suggesting anything?

[rabidmonk]

I DON'T LIKE IT--

A WEEK SPIKE IN MY OPINION.

[rabidmonk]

It has to push and push hard right now between 10:15 AM and 11:00 AM or it's a dead run.

IMHO

Rabid