精华 苦辣酸甜难书尽，成败得失笑谈中

[加京游子]

Frankly speaking, I am thinking about ARNA but a type of straddle ... I will wait closer to June 17th (?) meeting in case there is a delay...as in VVUS.

The following are assumptions on ARNA move that my straddle may be built upon:

1. On reject, ARNA will fall back to $1.00 to $1.50 range.
2. On approval, ARNA will rise to $8.00 with $10.00 top.

The pricing is as of option expiry date on July...

I am restraining myself from commenting on your assumptions except to say that any assumption is as good as any other. Position in whatever way you want. It is your money, after all. Get back to me once you are positioned.

From where I sit, a July straddle is the mother of all suckerest plays. May has killed any and all puts hedges. A delay will surely kills all July options, calls and puts. The game ARNA offers now is rather simple, don't over play it. If you are convinced with an outright CRL, go with straight puts. My money is wagered on an outright approval and I will add to my shares/calls position shortly afterwards. I am only about 1/2 in because I want to guard against the low probability of a delay/sideway pps! That is why I have not touched July options. If anything, I will naked write July puts --- I will get out my pencil and paper to see how many additional shares I can handle and write July puts accordingly if that is what I will play. Like I said many times before, I don't want to make money off selling puts. As such, I will likely add shares/mid-term calls.

Final comment: a boy should not play in the sandbox where men play!

 

[加京游子]

A buyer today ...

1) Bought ARNA@6.06 (for trading) and added Jan. 7.5C@1.8 (for core holding);

2) Bought DVAX@3.5 --- left it a long time ago, don't even remember when. Never imagined it would come back down to pick me up again. It used to be my "can't lose" stock. Let's see how this entry will pan out.

Will DNDN come back down to pick me up again at 2.7?

 

[加京游子]

Congratulations to your ARNA positioning. It seems it is catching up in valuation to VVUS...

Late June and July will be busy for bio: ARNA (June 27th), AMRN (July 27th) and VVUS (July 17th).

Not sure if you want to take another look at AMRN after its patent approval yesterday. There would still work to do but with FDA approval, it may go up a bit ...

Again, all my positioning is based on the thesis that: 1). On approval, a rise of over 20%; 2). On rejection, back to $2 or $3 per share.

Currently, put option of ARNA and AMRN at $5 level is rather cheap. Market obviously thinks approval is not an issue ... However, if anything happens, a return to $3 level is probably not surprising...

So, 1) what is your positioning in them?

2) You are playing PDUFA for 20% gain on multi-blockbuster drugs with puts hedges? Under your thesis, what is your expected gain net of puts costs?

Again, it is your money. Play in whatever way you are pleased but you really send me back to biotech junior kindergarden! There is surely no need to further waste your and my time and energy. I would very much prefer to talk to a brick wall.

 

[加京游子]

Here is the position:

1). Long AMRN shares
2). Sold covered calls July $14 for $0.90.
3). For each 100 AMRN shares, bought 4 August $5 puts.

If there is a huge move in July, the profit is rather limited. If July is passed without shares being called, then it will be a hit to the binary event.

The rationale is that the cost of puts is paid for. In case of approval, all the upside is pocketed. In case of rejection, cost is most likely recovered.

Considering similar position for ARNA. The issue with ARNA is upside is probably limited at $8 to $10 ...

Now we can talk! Good lucks!

1) Your AMRN positioning makes good sense but the puts are cash throwaway. On top of that, you bought 4 puts for every 100 shares. That is not protective puts. That is a bet for outright rejection.

I am waiting to see the new data before positioning.

2) You were dead wrong about ARNA AdComm and your valuation guesswork upon approval will be proven dead wrong again.

3) DNDN's fate is not in its own hand any longer. JNJ and MDVN will have a lot to say about the future of Provenge and thus DNDN. This ASCO will tell all. I understand the cash on hand is net cash until the pps north of 50 but cash is no good if it makes losses. I may revisit DNDN after all relevant data are out. Being late is a lot better than wrong!

 

[加京游子]

4 $5.00 put contracts for every 100 shares of AMRN. This is to recover potential loss on rejection. Therefore, overall position is neutral but bet on approval (the upside is left open :=))

On rejection, AMRN shall fall back to $3.00. The 4 puts will get back 4 x $2.00 = $8.00 per share. Plus the $3.00 share price, the overall recovery will be $11.00. This shall recover any loss on 100 shares of stock.

On approval, the upside is all in the bag. Of course, if the big move happens before option expiry, the gain is only upward to $14.00.

This position is immune to postponement. There is always residue risk in that the approval is conditional or the patent is not granted etc...

However, a protected position can be held to face the coming train.

For ARNA, a similar position can be built. Such a position makes more sense to ARNA as rejection will send its share towards cash value. Therefore, 2 $4.5 or $5.00 puts can protect every 100 shares.

One will gain $1.00 less per share on approval. If one believes in big upside, paying $1.00 is probably worthwhile the risk ...

Speechless! How do you come up with such a valuation for both stocks upon rejection?

Butterfly is lot more bull friendly than collar! I only pick plays that I can fight with a "double risk" strategy or call it "burning a candle from both ends" --- naked writing puts to fund calls buys, with sufficient cash lockup to be assigned the shares should the outcome be contrary to expectation.

Good, you sound like you know what you are doling. Let time be the judge.

 

[加京游子]

AMRN valuation on rejection is a bit tricky. However, down to $3 to $5 range is not unreasonable. Even if it is down to $5, the put at $5 shall be worth around $1.00. This will recover loss up to $9.00.

ARNA valuation on rejection is probably easier. Twice doesn't charm and probably won't justify thrice. Therefore, valuation at net cash is reasonable.

Again, these are just assumptions. Given the high volatility of bios, such protection probably is justified ...

The double burning strategy requires very good knowledge and experiences that I don't think I have. It also requires guts. With such a strategy, one essentially needs to stand firm with upcoming lights and believe it is not a train.

Frankly speaking, I have no idea what valuation ARNA will get after approval. In the best case, ARNA gets approval and VVUS gets rejection. Maybe $4.00 B valuation in near term is reasonable ? This implies $15 to $20 per share....

That is what makes a market! If one size fits all, we would not have a market to trade on. It is all speculation but continuous DD may help with how bets are wagered. Your mind seems to be made up firmly regardless of emerging developments. Any further discussion is rendered futile!

I know quite a few current ARNA players who were long-time DNDN players. Some of us migrated from DNDN to ARNA in 2010 and lost millions with the 1st failed AdComm. Others migrated to VHC and made millions (I was there only for the one-time special fat dividend butdid not gain in the spectacular pps appreciation). It goes without saying that absolutely none of us ever imagined that ARNA's MC would ever surpass that of DNDN but it did today. Time evolves; pockets change; leaders come and go. Stock market is forward not backward looking. Baby biotech speculation is the mother of all risks. No guts? There are better sandboxes!

One question: did anybody foresee JPM's London Whale's fat finger? Does USB/WFC trade at all? If yes, how does one hedge against the likelihood of a fat-finger trade and when? There is a big difference between the unexpected and unexpectable! Being right or wrong is judged after the fact but a speculation has to be made before the fact based on all available information to which one is privvy.

 

[加京游子]

Taking advantage of today's dip to fully load ARNA

Raiding the piggy bank and also selling some sidekicks to add shares @6.44 and Jan. 7.5C @2. Averaging up is a fun thing to do in a day like today! July calls will be bought closer to the PDUFA for 2 reasons: 1) the possibility of a PDUFA extension needs to be guarded against; and 2) time decay will eat off quite a bit of the premia.

The Jan. 7.5P and 5P I naked wrote when the pps was around 5.7 are in the black nicely. I will probably buy to close them just prior to the PDUFA. I have learnt not to write covered calls nor naked puts for big events. The pps is likely to move big upon such event outcomes unless being priced in. The former caps upside potentials and the latter leaves a door open for downside risks. Both should be avoided.

 

[加京游子]

Great that you are board on AMRN now. If this drug is approved by FDA and no huge setback in patent front, AMRN could be quite big...

Will wait till closer to June 27th for a potential position of ARNA. Something is not entirely right on ARNA to secure approval....of course...just my 10th sense...

Where the hell did you read that I am in AMRN? Do you intend to mislead or what? And is not right about ARNA?

 

[加京游子]

I thought you wrote AMRN in your previous post this morning. Maybe I read wrong...

Option premium on ARNA is pretty low ...

Get lost! Your misleading and deceiving attempts fool no one, not me for sure!

If anything, I may buy as many puts on AMRN as I can! And let me tell you why, AMRN is receiving a CRL because of CMC issues! I will buy 40-50K shares under 3 and wait for the CMC issues to be resolved!

You accused traders using TA as a guidance of reading tea leaves. Now you are using options pricing to conclude that Lorq will not get approved? You have spewed more than enough BS. As the thread's initiator, I am bluntly telling you that you are not welcomed to post here. But it is a free public forum, I just wish the site had a "ignore" function!

 

[加京游子]

What is CMC ? I don't care about rejection or approval. My bet is on volatility. Lack of volatility kills my bet ... ARNA's downside on rejection is obvious but it is hard to figure out the upside on approval...

a) That is exactly what is going to happen and your imaginary bet will get killed altogether --- your dreamed long shares will nosedive but thepps closes just 5 cent above your dreamed puts strike and render them worthless! But the real question is, do you have any bet on anythin?

b) Go ahead and mortgage your house to short ARNA because its drug will get rejected and it is going to zero. Now, do you have a house tomortgage? One can't help but wonder!

c) Get lost!

 

[加京游子]

Your money is a lot better spent holding ARNA than getting back into DNDN!

Current ARNA holders (Arenaics) and former DNDN players (Dendreonites): yours truly fit both labels. Read my thread's title!

I feel so terribly sorry for my DNDN associates and friends! GOLD belongs to jail! John Johnson was brought in to sell the company but his track record at SVNT speaks a lot to me. I sold my 6.7 shares at 15 on the CEO replacement sympathy rally. There was a story to play with when it first touched 6.5 but that story is probably gone now that JNJ and MDVN are crowding the space. With the ASCO stories unfolding, I will not rush back into DNDN in any hurry. I am holding the fort on ARNA!

 

[加京游子]

Keeping an eye open for HGSI

GSK has really gone hostile on HGSI, not upping its bid even by 1 penny. With the poison pill in the form of rights offering, I don't think GSK or anybody else can get HGSI below 20. I am about to pull the trigger on HGSI.

 

[加京游子]

nepean_01, please come in!

I am wondering if you are still interested in the bio/pharma space, and if you are still reading this board. If yes, and are still interested in getting a small/focus discussion group, why don't you go ahead setting up a by-invitation-only forum. I have too much stuff on hand to get the Google Group going off the ground. Some of former Dendreonites and current Arenaics will be keenly interested in joining in.

Thanks and the very best of lucks!

 

[加京游子]

沁园春 --- 填于洛卡瑟琳获批之前，2012.6.3

心潮起伏，思绪万千，夜难成寐。看美国大地，乱象纵横：两亿超重，一亿肥胖1，血压血糖，高过正常，唐风不再百疾生。病待治，问李公时珍，神药何在？

市场如此巨大，领几多公司竟拼搏！憾丰丰雷动2，昙花一现；康特拉维3，遥遥无期；鸡尾混合，萩呐莎儿4，滥竽竟然充大数。曲指数，独占鳌头者，洛卡瑟琳5！

1 根据美国疾病控制中心 (The Centre for Disease Control, CDC)的最新资料，2/3美国人体重超重(overweight)，1/3肥胖 (obese)。
2 FenPhen (Fenfluramine/phentermine)上市后风靡美国，月处方量超百万。由于副作用过大 (引发心脏病)，美国食品药物管理局(FDA)于1997年9月勒令其退市，其后遭130亿美元的法律诉讼。
3 Contrave, Orexigen Therapeutics的候选减肥药，心脏病副作用试验还在进行。
4 Qnexa, Vivus的候选减肥药，待批。为 Topamax和Phentermine的鸡尾混合，长期服用，前者可能引发新生儿童的兔唇，后者可能引发心脏病，还有不少其他副作用如失忆，注意力分散等。
5 Lorcaserin, Arena Pharmaceuticals 的候选减肥药，待批。

后记：迄今为止，为3家股票废过寝、忘过食、对过联、填过词（2003年ELN的20F和2005年的PML事件；2007年DNDN的AdComm和拒批；2010年ARNA的AdComm和现在的待批），短时间内的几十万、几百万进进出出，动魄惊心，不堪回首。第一重手得而复失；卧薪尝胆两年后有了第二重手，又得而复失；再卧薪尝胆两年后有了第三重手，居然成了，却又复失于第四重手。所有的梦大概都该破灭了，剩下的仅是些许的不甘心。时过境迁、物是人非，再也下不了当年的狠手重注了。这辈子给3个大药（Antegren/Tysobri，Provenge，Lorcaserin) 打上的深深的烙印再也无法磨灭了。事不过三，但愿这是平生最后一次了。

 

[加京游子]

感谢了，朋友们！再见了， 朋友们！！ 祝你们股市赚钱、生活开心！！！

自本楼2009年7月3日开贴以来，整整两年十一个月不下于一千个日子过去了。对你们的热心捧场和大力支持，不才衷心地表示感谢！

自2002年初入市以来，十年之内经历了多次的大起大落。源于不甘心，一次次的卧薪尝胆、重新入市。自2009年2月再进华尔街起，从DNDN下手，一路打杀到BAC，DVAX，MGM，LVS和ITMN等，击败过Stevie Cohen和John Paulson。一场猪流感，北京科兴（SVA）让我翻了个不小的跟斗。2010年5月的DNDN和ITMN胜了两场惨烈的歼灭战。不曾想，几个月之内，又把一年多内缴获的几十万俘虏断送在了APPY和ARNA两个主战场上。出于保本而瞻前顾后，临阵逃脱，在5月9日ARNA AdComm的前一天下午把精心布置的战线大部分拆除，误过了一次翻身的大好机会。

对于股市的痴迷，大概是父母给的吧，流淌在我血液里，铭刻在我骨子上。我不会就此罢手的！鉴于本楼已经有违于建楼时的初衷，我有关股票的发帖到此为止。

特此向朋友们道个别！但愿你们没有因为读我的帖子而赔钱！！并衷心地祝愿你们股市赚钱、生活开心！！！