No Decisive Word on Encysive Pharmaceuticals
by Andrew Vaino
Things aren't looking good. I wrote about Encysive Pharmaceuticals (ENCY) on Friday after their stock jumped on news they were restarting a Phase 2 clinical study on TCB3711. My sugestion then was this stock was still all about their response to a second approvable letter for Thelin, and adding to a short position on the price hike, while risky, might pay off.
Last night the FDA informed Encysive their response was incomplete. The stock dropped 7% to close just above $5.50 (20% off the high of $7 last Friday), putting the short position I suggested in the black.
I listened to Encysive CEO Bruce Given in the conference call ENCY hosted this morning and was not impressed. While initial press releases stated the problems were just in formatting, specifically that the FDA wanted some of the data in tables, Dr. Given backed off from being so definite and said the deficiencies were "for the most part just reformatting". As well, while initial reports suggested Encysive would refile within the week, Dr. Given also equivocated on this, saying he had to speak to the department involved.
It's impossible to know for certain what this all means. What can be know is that any decision on whether the FDA accepts the resubmission will likely be pushed off until at least January or February. While the CEO didn't say "stay the course" at any point, his answers to questions seemed straight out of Donald Rumsfeld's playbook. Maybe I'm too suspicious, but I think there's more to the story than is being told: perhaps an "unknown unknown". So, while this remains highly speculative, and is based purely on intuition and in no way on science or fact, I continue to think this will go down further.
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Related BHI Articles:
- Encysive: Despite TBC3711 Trial Resumption, Thelin is Key Factor
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Things aren't looking good. I wrote about Encysive Pharmaceuticals (ENCY) on Friday after their stock jumped on news they were restarting a Phase 2 clinical study on TCB3711. My sugestion then was this stock was still all about their response to a second approvable letter for Thelin, and adding to a short position on the price hike, while risky, might pay off.Last night the FDA informed Encysive their response was incomplete. The stock dropped 7% to close just above $5.50 (20% off the high of $7 last Friday), putting the short position I suggested in the black.
I listened to Encysive CEO Bruce Given in the conference call ENCY hosted this morning and was not impressed. While initial press releases stated the problems were just in formatting, specifically that the FDA wanted some of the data in tables, Dr. Given backed off from being so definite and said the deficiencies were "for the most part just reformatting". As well, while initial reports suggested Encysive would refile within the week, Dr. Given also equivocated on this, saying he had to speak to the department involved.
It's impossible to know for certain what this all means. What can be know is that any decision on whether the FDA accepts the resubmission will likely be pushed off until at least January or February. While the CEO didn't say "stay the course" at any point, his answers to questions seemed straight out of Donald Rumsfeld's playbook. Maybe I'm too suspicious, but I think there's more to the story than is being told: perhaps an "unknown unknown". So, while this remains highly speculative, and is based purely on intuition and in no way on science or fact, I continue to think this will go down further.
__
Related BHI Articles:
- Encysive: Despite TBC3711 Trial Resumption, Thelin is Key Factor
__
posted by Nico at
8:52 PM
4 Comments:
I was wondering why encysive doesn't tell us what the problem is. My first lesson I learned from a great reporter adam feurstien is that biotech companies never tell teh whole story. And I agree there's more then meets the eye going on. Don't you think it's wierd that the company would submit something, which they claim the fda approved, and wouldnt submit if it wouldnt be accepted, to be sent back after 45 days with a note saying you need better tables. It doesnt stack up. And better yet they submited the data in less then 24 hours. Meaning it could have been resolved weeks ago. And you put in the pipe deal 5 days before the 30 day fda timeline and the lack of cander by management, you know something really stinks here. The company keeps saying nothing is wrong. But why would the fda have a hard time analysing data, that they have seen for over a year and half, analyse 3 times, and vetted 3 times. It doesnt make sense. why would it take longer for analysing one last point as compared to the other approvables which had many. Either the company is lying about the fact the one point is a bigger issue, or they arent being truthful about what is really wrong.
thankyou
I first read your comments on the reasons for shorting this stock as I watched the stock tank a few percentage points. Nice call. However, I disagree with your thinking partially in the more recent post. I think you fail to consider the extent to which the FDA wants to see data a certain way in order to do anything. This is the government we're talking about here. I'm thinking the shares I picked up at 5.50 are going higher from here. Hopefully your mgmt. concerns are unfounded and he was just trying to not over-promise. However, it does beg the question of why hold the conference call if you're going to be so circumspect. Time will tell.
Rather than speculating, and even Andrew said he has no proof, no firm inputs but just his "intuition" when he posted his negative comments, perhaps we should just go with the facts --- Fact (1), the drug is approved by EU. Fact (2), most recently, Australian government also posted positive comments about the drug. Fact (3), if ENCY's CEO chose not to disclose negative info that he received from FDA (hiding the info), he will face fraud charges and lots of years in jail. I do not think he will do that.
Looking at these 3 facts, I believe the FDA will have positive comments. Let us all wait and see.
Rather than speculating, and even Andrew said he has no proof, no firm inputs but just his "intuition" when he posted his negative comments, perhaps we should just go with the facts --- Fact (1), the drug is approved by EU. Fact (2), most recently, Australian government also posted positive comments about the drug. Fact (3), if ENCY's CEO chose not to disclose negative info that he received from FDA (hiding the info), he will face fraud charges and lots of years in jail. I do not think he will do that.
Looking at these 3 facts, I believe the FDA will have positive comments. Let us all wait and see.
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