IF it hits the market, as in if the FDA approves the drug. If it doesnt approve the drug, then the stock is dead in the water. Abbvie took a risk in order to get to the front of the line and be there first in case the drug does get approved. Below are some clippets of the article:
Today, Infinity (NASDAQ: INFI) has announced a big deal with AbbVie (NYSE: ABBV), which has agreed to shell out as much as $805 million to help the Massachusetts biotech get its drug through clinical development.
As in, they don't know. It might not ever come to market. And some more:
AbbVie will pay Infinity $275 million up front to grab rights to duvelisib, and has attached another $530 million in potential milestones to the deal. In return—assuming duvelisib makes it through clinical development and wins FDA approval—the two companies will co-commercialize duvelisib and share U.S. profits. Outside the U.S., AbbVie will own rights to the drug and will cover commercialization costs, with Infinity getting royalties on net sales ranging from 23.5 percent to 30.5 percent.
Inifinity will fund the trials it conducts, while the two companies will equally share the costs in the trials run by AbbVie. The two aim to run several mid- and late-stage trials testing duvelisib over the next several years in a variety of blood cancers. Duvelisib is currently in Phase 3 testing for patients with relapsed/refractory chronic lymphocytic leukemia (CLL), with another Phase 3 study testing duvelisib in tandem with rituximab (Rituxan) in follicular lymphoma expected to begin later this year. Infinity is also running a Phase 1 trial for duvelisib in patients with other advanced blood cancers as well.
As in, they really hope this happens. They have to be approved for Phase 3 Testing, then they have to go through Phase 4 testing. Maybe it will get approved. Maybe it wont. Maybe something will come up.
While it’s unclear at this point just where Infinity’s drug will fit into the crowded field, AbbVie is showing today that it believes duvelisib will find a niche.
“We believe that duvelisib is a very promising investigational treatment based on clinical data showing activity in a broad range of blood cancers,” said AbbVie executive vice president and chief scientific officer Michael Severino. “The addition of duvelisib will complement AbbVie’s emerging oncology pipeline and expand our research into combination therapies to generate improved outcomes for cancer patients. We look forward to working with Infinity to bring duvelisib to patients worldwide.”
RBC Capital Markets analyst Michael Yee added in a note to investors this morning that the AbbVie deal puts “a stamp of validation” on Infinity.
As you read the above, it also mentions that the field is becoming very crowded with the anti cancer drug from other companies. Plus, this might not make it through all 4 Phases of testing by the FDA.
So this is an example of how the 'crowd' is wrong. Look at the last sentence two paragraphs up. " RBC Capital Markets analyst Michael Yee added in a note to investors this morning that the AbbVie deal puts "a stamp of validation" on Infinity."
TRANSLATION: This puts an emotional spin on this stock that is not based in fact as of yet, but more optimistic hope for the future, priced right in the stock.
It is my belief that the trading crowd will come to its senses in the next several days and realize that this stock is only in Phase 3 of testing and it will be a while before this drug treatment, if even approved, will make any money. Therefore, if am buying put options on this stock, specifically the October 14's. I went an extra month out due to the fact I believe this will be close to a week before the stock starts to drift back down to more realistic levels.
Dont forget to go to the sandbox to get the exact orders.
Happy Trading,
Mark
.png "English"){kind=small}
0 comments:
Post a Comment