20/20 vision – in hindsight (TopoTarget)

By On 29. June 2012 · Leave a Comment · In BioPorto, Spectrum, Topotarget

After a hectic day – its time for a little soulsearching. I have no shares in TopoTarget,  but that’s just a coincidence, I might as well have had; but basically I am always a little wary with “one-trick-pony’s “- especially  biotech-ponies  –

Relying on just one product-line is dangerous, it’s 100%  make/break … But after todays massacre I think (I hope on behalf of all of us at Medicoinvestor.com) that we are truly sorry for the poor Topotarget shareholders who have lost a bundle today.

TopoTarget (SPPI’s partner) announced today that the CUP-data showed that there was no significant measurable effect in regards to the study’s primary endpoint – an improvement i PFS (progression free survival) – this caused the price on TopoTarget to plummet – a  minus of staggering 60%

The presentation of the data is here.http://investor.topotarget.com/events.cfm

Personally I do not know all that much about Topo (I leave that to experts)  – but if the company’s management is to be believed – then today development is an overreaction; based on a wrong assumption  of the importance of the trial – more on that later. Personally I am not al that surprised that the stock was hammered upon the results – there’s been too much “hyping and boasting”  lately on various scandinavian chatboards, and it is seldom good for a hyped stocks pricetag when life knocks on the door demanding a reality-check :).  I know – I’ve seen and tried it before with some in my own portfolio.

But after reading up on  the case, and especially the fact that  Spectrum did not release a press release immediately this afternoon – I think – as also our resident house-expert Investor89 that the all important final battle is with the PTCL BELIEF study .

Although the PTCL market going forward is attractive, it is of course  not nearly as interesting as the potential CUP-market would have been  (and there are competing products – but that’s another matter) … the pricetarget on TopoTarget will/must certainly be adjusted  significantly down on this – (I’ll leave that to Investor89) :)

Malurt (a renowned danish investor) wrote today on EuroInvestor –  (I bring the quote without his permission – but I’m sure he’ll forgive me) …

Here’s his some clever observations on EI -(even if it hits us BioP”s in the gut as well):
(Is the markets reaction) Fair? Well – When did the stock market start to be about fairness ? But todays events, (and the past several years development), gives at least 3 vital lessons:
First of all:  Stay away nfrom the most talked about / hyped stocks on the internet (Euroinvestor). The surest and most certain way to ruin is putting together a portfolio of the 3 most praised and discussed stocks.

Secondly:  The risk biotech companies with a limited number of products under development is too large an individual investor, and such companies should not  be regarded as a serious major investment objects. Personally I once thought that you could put together a portfolio of Danish biotechstocks and get rich -(the good ones making lots more than the bad would cost me). I bought four or five shares for an amount I usually invest in just one share…Now I am rich in experience and alas – also in loss; and my dream that at least one golden eagle would save the investment has finally evaporated.

Thirdly:  We have again received a splendid example of how specific knowledge about individual products may be directly harmful when it comes to investing. We’ve might know all there is to know about a product and all the technical terms, but as long as the fine words can not be transferred into business  it is of little use,  to “believe in the case ” is more often than not a sure loser.

I’m sad that Topo didn’t make me a fortune that could have paid for a  tour around the Globe this summer. Fortunately, I’m certain  I’ll win a few million quids in Lotto tonight 🙂 . If nothing else we learn from experience (however painfull)
unquote …
Malurt obviously has some valid points  (though it hurts to read …) – you can actually know to much about a case, it’s dangerous to fall in love with a stock – and regarding our personal favourite (whether it’s TopoTarget – or in my case BioPorto) we’re a little one-eyed (but fortunately only a little bit) … during July, it will be proven  whether “In The kingdom of the blind the one-eyed is king …..” or if it is not helping much to see something no one else can …

A small quotation from  medwatch.dk

Interview with Anders Vadsholt CFO af Topo

“I had not dreamed of such a large drop (baacuse of todays CUP-results)  Our partnership agreement is primarily on PTCL study.The milestone payments coming from PTCL has nothing to do with the study here. So I am quite surprised of the magnitude “says Anders Vadsholt, CFO of TopoTarget.
“The conclusion is that we do not proceed with belinostat in regards of  CUP, but we can make some subanalysis on the actual indications. We will look at what conclusions we can draw from them.  It can give us some clues about which direction we should focus our development in going forward. If we do new studies in solid tumors, we will choose a known indication instead. “
if Vadsholt right there’s hope yet … the most vital matter for the Topo shareholdes must be  that liquidity is not dependent on the CUP study – so the company it is not threatened. On the other hand, it is clear that the potential for the company is significantly reduced. The secondary (which is important for everyone not just Topo’ere) is probably also that one must be at maximum alert – if a stock is extremely hyped  – and a stock that  is dependent on a single outcome.
Before anyone now think, I’m about to “chicken out” on BioP – I am NOT :) I am firmly convinced that there will be a global agreement in Q2 – I just think that we must recognize that Q2 this year also includes  July … But basically I think we’ve had a super good and positive June, with the agreement with the Wiener Group in Latin America, the new U.S. NGAL ratio-patent and the Phadia verdict … all we are missing is just one global distributor – then  everything is hunky-dory ..

About Stengaard

BioPorto investor from way back when... I've invested in BioPorto ever since they made their debut on the danish stock exchange, it been a looooong journey with many obstacles. But well worth it all if Bioporto maintains their patent after the proceedings in 2014, and enters into agreements with Global Distributors in 2012 and 2013 If not, then it'll take another xx.years 🙂

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