ARRY and VCEL
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ARRY and VCEL

By mell following x   2017 Aug 31, 9:41am 841 views   18 comments   watch   quote     share  


ARRY tripled since my first recommendation, VCEL close to doubled. Both have much more room to run, ARRY has an incredibly large (mostly oncology) pipeline and partnerships as it transitions from development stage to commercial biotech and VCEL is turning towards profitability on ramping up their best available knee cartilage stem cell treatment and another one for heart failure in the waiting. Check em out, both far from being done yet.

#investing
1 Patrick   ignore (0)   2017 Sep 14, 6:58am   ↑ like (0)   ↓ dislike (0)     quote        

Please post more like this!
2 BayArea   ignore (0)   2017 Sep 14, 8:45am   ↑ like (0)   ↓ dislike (0)     quote        

Thanks for sharing, will check these out.
3 mell   ignore (1)   2017 Sep 19, 2:18pm   ↑ like (1)   ↓ dislike (0)     quote        

Vcel broke out to 5.25 today to fall back all the way to where it started. This is a good sign of forming a base. It has run a lot so there could be significant fluctuations with profit taking. However LT this stock should reach $10, so you may want to buy on dips once you get interested in forming a position. It's become my largest holding over the past 2 years, followed by ARRY. ARRY has been going higher every day since the last offering a couple of days ago was at 10.75, almost $2 above the market close (!). This is very unusual to have a secondary priced higher than the market price and extremely bullish. Basically those LT investors just gave them 200MM at above market rate. The stock has a large float though, almost close to 200MM everything included, so every billion you add to the valuation is "only" a $5 increase in the pps. If they execute successfully on all of their programs I can see it going as high as $30 though within a few years, reaching potentially $50 on a buyout (note this stock was trading at $3 a year ago which shows you the incredible appreciation you can have in biotech for taking on risk). My price target for VCEL is anywhere between $10 on the low end and $100 on the (extreme) high end and I regard it as a safer bet between the two although for small (to mid) cap biotechs both are relatively low risk and they have seen big increases in inst. ownership (ARRY is around 100%, VCEL around 30%).
4 justme   ignore (0)   2017 Sep 19, 2:59pm   ↑ like (0)   ↓ dislike (0)     quote        

Mell, for me, the single most important parameter that determines whether I should pay attention to a stock tip is HOW you first heard about the stock)s) in question.

How did ARRY come to your attention? what date?
How did VCEL come to your attention? what date?
5 mell   ignore (1)   2017 Sep 19, 3:22pm   ↑ like (1)   ↓ dislike (0)     quote        

justme says
Mell, for me, the single most important parameter that determines whether I should pay attention to a stock tip is HOW you first heard about the stock)s) in question.

How did ARRY come to your attention? what date?
How did VCEL come to your attention? what date?


I research a lot of stocks, it's my 2nd job. Usually I find these mentioned by somebody else (on StockTwits for example), then I do some quick DD and if it checks out well I buy a starter position and do more DD. I came across both 2 years ago, ARRY was completely new to me and I saw it's huge oncology pipeline which reminded me of LGND, which had a similar business model (not oncology though) to get started: huge pipeline and many partnerships to spread the risk. These stocks initially trade low for a while as they don't fully own most of their drugs and the milestones do not fully cover expenses. However over time with 15 candidates purchased on the cheap you will have 5 winners, maybe you own one of them fully and the rest are partnered, and upon successful completion of first phase 3 drug the stock often jumps 2-3x to never look back as the valuation goes from like 200MM-300MM to a billion (1 bln is a very rough estimation for a valuation for 1 successful oncology drug close to approval).
VCEL I had been following loosely for almost 10 years, they had a reverse split due to a couple of failed drugs and modest sales on their commercialized products only and then name/ticker and management change and put it a solid turnaround plan. That is often a good time to jump in if you see biotechs finally focusing on 1-2 of their most successful technologies with a solid plan. In this case it was getting FDA approval for the best stem-cell knee cartilage surgery followed by a quick ramp-up in training for MDs. Previously they tried other countries with unfavorable reimbursement policies instead of focusing on the US where, when something is determined to be superior, it usually eventually will be paid for by insurances. Also they have another stem-cell product for heart failure with successful phase 2b and talk for accelerated approval with the FDA. When Trump won the election and Gottlieb was announced as head of FDA it was clear he would speed up approvals and not always require costly phase 3 trials, esp. when there is no alternative option for patients (there's no real treatment for CHF). Another AHA moment to jump in here. If they get this approved without costly phase 3 this will double to triple overnight and never look back, but the growing revenues from the MACI knee cartilage surgery guarantee a slowly rising price to $10. I don't see much risk here.
6 errc   ignore (2)   2017 Sep 19, 3:39pm   ↑ like (1)   ↓ dislike (0)     quote        

Hey mell, not trying to rain on your parade, but I think it was you who frequently touted OXGN. Whatever happened with that one, it seems to have went bust.

I do like this model, though. We used to use it in handicapping, if you could average your plays @ +200, you only need to hit 35% to be profitable.

So if you're gunning for 2x-3x gains, you can afford two out of three to go bust, and still turn a profit.
7 mell   ignore (1)   2017 Sep 19, 4:03pm   ↑ like (0)   ↓ dislike (0)     quote        

errc says
Hey mell, not trying to rain on your parade, but I think it was you who frequently touted OXGN. Whatever happened with that one, it seems to have went bust.

I do like this model, though. We used to use it in handicapping, if you could average your plays @ +200, you only need to hit 35% to be profitable.

So if you're gunning for 2x-3x gains, you can afford two out of three to go bust, and still turn a profit.


Yes, absolutely. With those 2 I am gunning for even more since I got in early, but I always scalp a little. OXGN is now MATN and on the OTC, yeah I touted it for a while after it made me glorious gains only to follow up with giving me the biggest loss I've ever eaten erasing all the gains and some, giving me a nice tax cushion though. This one was riskier though since it spiked after phase 2. Looking back it is always best to sell after successful phase 2s for these very early biotechs and keep a smaller core, ARRY and VCEL already have succeeded in phase 3 and and/or have commercialized. However MATN hasn't gone BK yet and I think their phase 3 will ultimately be successful. What we have at MATN is grossly incompetent management, in fact I have been to 2 shareholder meetings and bumped heads before realizing they were not going to throw retail a bone ever. I sensed the reverse split would fail and they would go to OTC so I sold for a loss at double the current price. After successful phase 2 the standard of care changed for their indication, which was the only thing that wasn't their fault (requiring a new phase 2/3). They bumbled for 2+ years with an incompetent CEO at the helm - after ousting the old competent one who was willing to sell the co. for a good profit (Roche was rumored to have attempted a buyout at $6+/sh). The 3rd and current CEO is better equipped in the field, but not a real business guy and he and mgmt were way too stubborn with insisting on going it alone. Instead they should have partnered on the cheap long ago and the stock would probably still be around $2. I've hardly ever invested in bad/failing drugs, but failing management is actually harder to detect, so that happened a couple of times and will continue to happen. I still think at current prices OXGN/MATN is a decent gamble and I am contemplating starting a small position here again (note their lead drug is a VDA which is non-toxic as opposed to chemo, only with transient side-effects, IMO a great addition for a combo). I'm impressed you kept track. Definitely a lesson learned with this one.
8 errc   ignore (2)   2017 Sep 19, 4:31pm   ↑ like (0)   ↓ dislike (1)     quote        

I'm impressed you kept track. Definitely a lesson learned with this one.

--------------

I have the memory of a carrier pigeon ;)

You first mentioned it when I had interest in the sector. I almost bought it a couple times but could never pull the trigger.

Was oxgn the company with the diabetes drug, or something similar?
9 mell   ignore (1)   2017 Sep 19, 5:12pm   ↑ like (0)   ↓ dislike (0)     quote        

errc says
Was oxgn the company with the diabetes drug, or something similar?


That was GNBT, they failed as well though still around after a large RS. They were in penny-land though which is always highest risk, few make it. Ironically I made decent money on them during those multiple 2x-3x runs on the OTC. Their buccal insulin made it to a few countries and it seemed to work well as some US citizens actually started importing it for a while. However without money to satisfy a costly FDA trial and poor, scammy mgmt it never got approved here. Sad because there is a real need and I have been toying with the idea of putting a little into MNKD, who are now the only company for inhaled insulin (Affreza goes into the lungs which I consider inferior to GNBTs buccal delivery due to more side-effect, but there are so many needle-phobes out there that they may have a decent market soon). If MNKD can ramp up Affreza sales and make it affordable/fully reimbursable, why would people choose the needle? If you pick 5 companies and end up with 2 winners and scalp the others to minimize your losses you'll do ok. Biotech land is littered with failures, but 2x-3x is conservative if you get in early. Hoping for an eventual 10x on ARRY and potentially 20x-40x on VCEL from my cost basis. I have sold many early and easily left 100K+ on the table. LGND was one of them, sold after 3x, missed out on 10x+.
10 mell   ignore (1)   2017 Sep 28, 1:38pm   ↑ like (0)   ↓ dislike (0)     quote        

Net money flow still positive for both on a daily basis. VCEL could easily go to $10+ by EOY.
11 mell   ignore (1)   2017 Oct 11, 6:24am   ↑ like (1)   ↓ dislike (0)     quote        

mell says
Sad because there is a real need and I have been toying with the idea of putting a little into MNKD, who are now the only company for inhaled insulin (Affreza goes into the lungs which I consider inferior to GNBTs buccal delivery due to more side-effect, but there are so many needle-phobes out there that they may have a decent market soon). If MNKD can ramp up Affreza sales and make it affordable/fully reimbursable, why would people choose the needle?


@errc Should have listened to the inner ramblings this time but went on (a much needed) vacation instead, while MNKD took off.. oh well ;)
For those contemplating, VCEL took a 30% hit from its fresh highs after the FDA did not grant accelerated approval for their heart failure stem cell therapy, but requires a phase 3 as usual. However their knee cartilage replacement flagship product MACI is just ramping up yugely and they may become profitable this quarter and very likely next year. An earnings beat at the beginning of November is def on tap, so this would be a great entry point here around 4.50-5 for those worried that it had ran too much. cheers
12 mell   ignore (1)   2017 Oct 12, 8:39am   ↑ like (0)   ↓ dislike (0)     quote        

Anybody got in VCEL at 4.60-5? It already blew past it. LT target $10-$20. Solid growth company turning to profitability. Never too late her IMO as it will reach $6 soon again. Earnings on tap beginning of November, expecting easy beat.
13 E-man   ignore (0)   2017 Oct 24, 11:42am   ↑ like (0)   ↓ dislike (0)     quote        

Mell,

I'm looking at both of these stocks, and here are my opinions:

VCEL - This stock probably had a reversed split. Otherwise, it went from $100+ down to where it is today. You can make an argument that it's forming a handle at today's prices before the break out? From the numbers, this stock is way too speculative. Of course it can be a 10-20 baggers, but it who knows. One shouldn't gamble with this stock on the money s/he can't afford to lose.

ARRY - Looks like it's forming a handle too before a break out?

Good luck.
14 HEY YOU   ignore (7)   2017 Oct 24, 11:48am   ↑ like (0)   ↓ dislike (0)     quote        

The market will be at 30,000 by December.
No one ever loses in the market or flipping shacks.

mell says
giving me the biggest loss I've ever eaten erasing all the gains and some,


Got a dollar amount?
15 mell   ignore (1)   2017 Oct 24, 3:53pm   ↑ like (0)   ↓ dislike (0)     quote        

HEY YOU says
The market will be at 30,000 by December.
No one ever loses in the market or flipping shacks.

mell says
giving me the biggest loss I've ever eaten erasing all the gains and some,


Got a dollar amount?


~200k

E-man says
Mell,

I'm looking at both of these stocks, and here are my opinions:

VCEL - This stock probably had a reversed split. Otherwise, it went from $100+ down to where it is today. You can make an argument that it's forming a handle at today's prices before the break out? From the numbers, this stock is way too speculative. Of course it can be a 10-20 baggers, but it who knows. One shouldn't gamble with this stock on the money s/he can't afford to lose.

ARRY - Looks like it's forming a handle too before a break out?

Good luck.


VCEL is turning to profitability in 2018 at the latest, just do some research on MACI surgery, it's the best knee cartilage replacement surgery out there and will quickly become gold standard. Plus Epicel revenues rising as well. The R/S days are long gone and mgmt changed to one with a clear execution plan. Most bios fail multiple times before they success with one or two or more of their drugs/devices, so 80% look like this. You buy when they turn to profitability. Short term biotech is weak so I regard this as a buying opp, though earnings beginning of November may boost this quickly. More neutral on ARRY though it remains an eternal buyout candidate full of surprises with its huge pipeline. Technicals don't matter much to me. cheers
16 anonymous   ignore (5)   2017 Oct 24, 4:22pm   ↑ like (0)   ↓ dislike (0)     quote        

HEY YOU says
The market will be at 30,000 by December.
No one ever loses in the market or flipping shacks.

mell says
giving me the biggest loss I've ever eaten erasing all the gains and some,


Got a dollar amount?


~200k

E-man says
Mell,

I'm looking at both of these stocks, and here are my opinions:

VCEL - This stock probably had a reversed split. Otherwise, it went from $100+ down to where it is today. You can make an argument that it's forming a handle at today's prices before the break out? From the numbers, this stock is way too speculative. Of course it can be a 10-20 baggers, but it who knows. One shouldn't gamble with this stock on the money s/he can't afford to lose.

ARRY - Looks like it's forming a handle too before a break out?

Good luck.


VCEL is turning to profitability in 2018 at the latest, just do some research on MACI surgery, it's the best knee cartilage replacement surgery out there and will quickly become gold standard. Plus Epicel revenues rising as well. The R/S days are long gone and mgmt changed to one with a clear execution plan. Most bios fail multiple times before they success with one or two or more of their drugs/devices, so 80% look like this. You buy when they turn to profitability. Short term biotech is weak so I regard this as a buying opp, though earnings beginning of November may boost this quickly. More neutral on ARRY though it remains an eternal buyout candidate full of surprises with its huge pipeline. Technicals don't matter much to me. cheers
17 E-man   ignore (0)   2017 Oct 25, 10:09am   ↑ like (1)   ↓ dislike (0)     quote        

Thanks for sharing Mell. If one is looking for an entry point, today is about as good as it gets. Yeah, one maybe able to squeeze another 10-15 cents to the downside for the bragging rights, but this is a good entry point. I'm going to trust you on your research and buy 2,000 shares today. IF it goes up 10 folds in the coming years, I'll be happy. If it goes to zero, it'll be a tax write-off. $8.5k is something I can afford to lose without losing sleep over it.

Good luck to both of us. ;)
18 mell   ignore (1)   2017 Nov 3, 7:41am   ↑ like (1)   ↓ dislike (0)     quote        

E-man says
Thanks for sharing Mell. If one is looking for an entry point, today is about as good as it gets. Yeah, one maybe able to squeeze another 10-15 cents to the downside for the bragging rights, but this is a good entry point. I'm going to trust you on your research and buy 2,000 shares today. IF it goes up 10 folds in the coming years, I'll be happy. If it goes to zero, it'll be a tax write-off. $8.5k is something I can afford to lose without losing sleep over it.

Good luck to both of us. ;)


cheers! Will likely be in limbo (4.20s-4.60s) til earnings November 10, which I expect to be a solid beat. I don't think this can ever go to zero as it will be eventually profitable, so this is derisked. I own over 50K shares (at 2.80 albeit), don't repeat this at home ;)

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