ZAFGEN ANNIHILATED ON 2nd TRIAL PATIENT DEATH

Kill me once, shame on me. Kill me twice, you’re a fucking murderer.

Shares of Zafgen are being crushed this morning, down more than 60% due to a 2nd trial patient death, for their obesity drug. This is an incredibly sad outcome; but it’s also really fucked up that a second trial patient had to die in order for the fuckheads who run this company to finally understand their drug doesn’t work.

The biopharmaceutical company said it learned Tuesday that a patient being treated with beloranib for Prader-Willi syndrome was diagnosed with bilateral pulmonary emboli—blood clots to the lung—and died.

The patient was receiving the drug during the open-label extension portion of the late-stage trial, which hadn’t been halted.

Prader-Willi syndrome is a genetic disorder that results in life-threatening obesity because of unrelenting hunger. There is no cure for the disease, which affects one in 12,000 to 15,000 people, according to the Prader-Willi Syndrome Association.

In October, Zafgen disclosed that a patient had died during the beloranib study. The U.S. Food and Drug Administration placed beloranib on partial clinical hold because of the thromboembolic events—blood clots that move after forming and block other vessels—in other trials of beloranib and the unknown nature of that death.

 

I spoke about this a few month’s ago, during the first patient death and how it reminded me of the phen-phen disaster of the 90’s. ZFGN should be crushed into eternity. Maybe Martin Shkreli will buy this company too, when its shares touchdown under $2.

The only intelligent woman at the Fed, Brainard, seemed to be talking directly to her hawkish cohorts this evening, essentially telling them to chill the fuck out and take a laxative.

Weak growth abroad has pushed up the value of the U.S. dollar, pushing down on inflation and the level of interest rates that the economy can withstand while still generating jobs and growth, Fed Governor Lael Brainard told the Stanford Institute for Economic Policy Research.
One model in common use at the Fed suggests a 1-percentage-point cut in rates would be required over the medium term to offset the negative impact on employment of the stronger dollar, she said.
With short-term borrowing costs now near zero, “(t)his shift down implies a delay in the date of liftoff and a shallower path for the federal funds rate over several years,” Brainard said. “In effect, this spillover from abroad implies some limitations on the extent to which U.S. monetary conditions can diverge from global conditions.”
Brainard’s warning against raising rates too quickly echo those of the Fed’s most dovish voting policymaker, Chicago Fed chief Charles Evans, who earlier in the day repeated his view that the Fed has plenty of tools to make things right if it falls behind the curve on lifting rates, but few tools if it mistakenly raises rates too soon.
Speaking just two weeks before the Fed is widely expected to end seven years of near-zero interest rates, Brainard declined to say if she would oppose such a move but instead pointed to the policy debate that will likely dominate discussion at the U.S. central bank once the tough decision of that first rate hike is past: just how long should the Fed wait before raising rates again?

Like bond king Gundlach, Brainard is merely speaking with common sense. YOU DON’T HIKE RATES INTO A DEFLATIONARY VORTEX.

The market is calling bullshit on rate hikes anyway, with yields super low and stocks vegging out ahead of the meeting. If the Fed pauses (no homo) on the rate hike suggestions from Plosser and other assholes at the Fed, stocks will fucking roar like you’ve never seen before. Men and women alike will dance in celebration, in the streets, doing lines of blow off champagne corks.

On the other hand, if they do raise rates, I’m afraid you’re all doomed.

Happy trading.

Finally, Jeff Macke has come to iBankCoin.

For those of you unfamiliar with Jeff, he’s a long time friend of the site, keynote speaker in both iBC conferences, with a long track record of investment experience.  I think you’ll find his videos to be engaging and enlightening, particularly when it comes to retail. Jeff grew up around retail, as his Father was the Chief at Target  and Dayton Hudson for many years. I consider Jeff’s opinion on retail to be the very best around, because he “gets it”, if you know what I mean.

He does daily shows via Periscope called Panic. I’m not certain how this will work with the site yet. Frankly, this is a work in progress. Nevertheless, I am thrilled to be able to host his content on iBC’s youtube channel and have it here for all of you cellar dwelling misanthropes.

I did try to warn you that William Albert Ackman wanted to exact a biblical brand of revenge.

VRX sprinted, no scratch that, knifed shorts in the face higher, by 10%–leaving short seller dust in its wake. On this first day of the last trading month of the year, Le Fly made it happen; he really did.

People reading this will not accept this winship at face value and will instead run along to Bronte Capital dot Blogspot to reassure themselves that VRX is going to zero.

But let me tell you what’s really gonna happen here.

Big money will shit on these websites with screen shots of other websites that declare VRX a scam and instead run this stock, the fuck, higher into the New Year. The squeeze will be epic and your losses gargantuan.

I can’t think of a better way to end 2015, than Le Fly and Super Bill teaming up to lay waste to an entire generation of short sellers.

See you at $115.

NOTE: PAH is next.

Before we get into the market, I’d like to share an email I received yesterday, in response to my latest article on VCs and how they’re fucking us each and every day.

Wanted to email you a quick story to illustrate further your point on the last Fred Wilson post:

I was up in SF recently and my friends were telling me about this new app Saucey, essentially an alcohol delivery service, that they use to have booze delivered on-demand to their place. What they have found is that they are often offered coupon codes on which there are no limits to the frequency of usage for any particular account. Also, the codes are ridiculously easy to guess (i.e. “10OFF” works, but so does “30OFF”). The only requirement is that the order less the discount must total above $1.00. My friends have been drinking basically for free using this app for months now, courtesy of their local VC firms.

All this sounded too good to be true but I confirmed the scam when I was there. We ordered about $70 worth of alcohol to the house for $2 total. Unbelievable, and I am sure it is all in the name of increasing the “active user” figures for some offering memorandum.

Thought you would enjoy!

See? I was right. VCs pay “entrepreneurs” to take their money and burn it in giant gabage pales. I love how some of these hoodie wearing cro-magnons think they’re businessmen, yet are unable to book a profit on their businesses. I guess I’m old school when it comes to running an enterprise.

Markets are sharply higher today, for reasons that escape me.  Perhaps people just figured out that the north star is 14x brighter than the sun and deemed that to be boolish for stocks. Or, maybe the fact that the ISM numbers came in recessionary will provide the Fed with the data necessary to avert moronic rate hikes.

Or Santa.

Either way, I am riding William Albert Ackman’s coattails to the promise land, very long VRX, fixing to assist him in disposing of any and all bodies he might end up ripping to shreds.

We have  the ECB and Fed for interest rates and currency fuckery planning and OPEC, specifically Saudi Arabia, to determine the price of crude.

This Friday the oil sheikhs will discuss the fate of the world, as it pertains to crude.

“We have a meeting on Friday, we will discuss all these issues,” al-Naimi told reporters Tuesday. “We will listen and then decide.”

Oil prices just completed the biggest monthly decline since July as OPEC, which pumps about 40 percent of the world’s supply, showed few signs of trimming production. Crude has fallen almost 40 percent the past year as a record surplus persisted while global producers fight for market share.

When asked if Saudi Arabia will stick to its strategy of defending its markets against competing supplies, al-Naimi said: “Who said we are keeping market share strategy? Did I ever say?”

Smug bastard. You can feel the sense of entitlement seeping through this article. I’ve always felt that getting long crude is a good idea heading into an OPEC meeting, especially with crude near the lows. Eventually, they will cut production and it will invoke a fierce rally.

David is 100% right for calling bullshit on their recent strategy that seems to revolve around the world of SUNE, trying to keep those stupid bastards alive at the expense of their own shareholders.

I hope David gets 3 board seats and then proceeds to kick all of the C-level execs in the nuts, just before firing them.

Here are the excerpts of his letter.

We write in respect of Appaloosa Management LP’s holdings of TerraForm Power, Inc. common equity and senior notes.

Notwithstanding your explanation in the release, we find that “aligning the company’s strategic focus around acquiring projects from its Sponsor” offers little apparent benefit for TERP stakeholders and raises concern for obvious conflicts between the interests of TERP and its “Sponsor”, SunEdison (SUNE).

Until recently, TERP’s business purpose was to act as a vehicle to hold and finance a high quality portfolio of fully-developed wind and solar power assets that were supported by long-term power purchase agreements with large, investment-grade corporate counterparties. Isolating these projects within a ring-fenced vehicle made sense for both TERP and SUNE, as the most efficient cost of capital could be obtained by segregating them from the operational, developmental and construction risks of SUNE’s main operating businesses.

The July announcement of the acquisition of the Vivint Solar (VSLR) portfolio of residential rooftop assets marks an unfortunate departure from this business model and appears to serve the sole purpose of promoting SUNE’s desire to acquire VSLR’s development and operating assets, rather than enhancing the quality and value of TERP’s holdings.

Disclosure of the precise details of this acquisition plan is long overdue, as well. So too, are the details surrounding the distinct possibility that TERP will be forced to accept a note from SUNE (which is of dubious credit quality and market value) due to a shortfall in the market value of the assets to be delivered in the first leg of the VSLR portfolio transaction relative to the $922 million purchase price.

The reconfiguration of the lnvenergy transaction announced November 9th is no better for TERP stakeholders and is obviously intended for the sole benefit of SUNE. These modifications will hand­ off SUNE’s responsibility for a $388 million equity warehouse commitment to TERP — yet another departure from TERP’s traditional role of owning permanently-financed, income-producing assets.

We note the advertised increase in the number of independent directors on TERP’s board and trust that the Corporate Governance and Conflicts Committee will appropriately investigate these and any other related-party transactions to ensure that they are conducted for the benefit of TERP stakeholders.

Recent rumors of discussions between SUNE and VSLR regarding “strategic options” for the proposed merger transaction, if true, may represent an opportunity for the Committee to exercise its independence and relieve the financial pressures on both TERP and its “Sponsor” from this harmful transaction. Such efforts would be strongly supported by Appaloosa

On this news, TERP is through the roof, up almost 20%. SUNE, aka the “sponsor”, is higher too.

Just a refresher for you n00bs out there: I made the bulk of my 2015 returns long oil and gas stocks in the beginning of the year. The moves were outrageous and I was early to the trade. After selling them, I promised to steer clear of the sector until December, which of course I violated and ended up losing heinous amounts of dollars in SLCA.

At any rate, the reason why I was bullish on crude last year and why I’m considering it now is seasonality. Have a look at our Independent Oil and Gas sector in Exodus, with custom tailored seasonal stats. You will not find this data anywhere else.

Over the course of the year, the sector has been ripped to shreds, as you readily know.

Valuatons are at the cheapest in over a decade.

And, if we’re gonna play it like last year, you’ll want to be long the stocks with the largest short percentages. All of these stocks will soar, hardly any will post negative results. If this industry runs, take your trade, don’t get attached to them, and then get the hell out.

Here are the stocks most heavily shorted in the space.

Last year I played SN in a big way. I’m not sure which one I like now, so stay tuned.

It looks like the World of Warcraft, guitar playing, guru of the mad small cap biotechs is about to get a comeuppance of sorts.

ESRX has agreed to cover a $1 alternative to Martin Shkleri’s $750 option, or $375. I think he lowered the price by 50% recently, just after exiting from his clown car.

The U.S.’s biggest manager of prescription drug benefits said it will cover a $1-a-capsule alternative to the anti-parasitic treatment Daraprim, which costs $750 a pill after Turing Pharmaceuticals AG raised the drug’s price from $13.50 this year.

Express Scripts Holding Co. said in a statement that it’s partnering with Imprimis Pharmaceuticals Inc., a San Diego-based company specializing in compounded drugs. In October, Imprimis started making a medicine for as little as $1 a capsule that includes the active ingredient in Daraprim, pyrimethamine, together with a vitamin called leucovorin that Daraprim is usually used with.

Turing’s price increase for Daraprim, a decades-old drug that no longer enjoys patent protection, drew outrage from politicians, doctors and health insurers. By having a compounding pharmacy combine the two drugs, Express Scripts doesn’t need to wait for an FDA-approved direct competitor to Daraprim to come to market at a lower cost.

The $750-a-pill price “wasn’t acceptable,” Steve Miller, chief medical officer for Express Scripts, said in an interview Monday. Using a compounded drug is “a simple, elegant solution that gets desperate patients the drugs they need at an affordable price.” Miller said because Daraprim isn’t needed in large quantities, Imprimis should not have a supply problem.

So what does this mean for shares of KBIO today? Nothing at all, since Turing is private. Ultimtely, however, I believe KBIO goes to low single digits and Marty washes away with the sands of time, with his millions to enjoy, whilst entertaining an awkward group of livestream viewers–watching him comb over 10q’s, building balance sheets, floating about the office atop hoverboards.

As for Turing, I believe they will have a very hard time marketing a 60 yr old drug at $375, when a $1 option exists.

They must be smoking some good shit over at Citi. They’re calling for a mid 2016 turn in commodity prices. I suppose these fucking things can’t drop forever.

The bank predicts the start of a recovery in some raw materials as returns from commodities head for a fifth annual drop amid the slowest growth since 1990 in China and the prospect of a stronger dollar if U.S. interest rates increase. Citigroup sees “plenty of opportunity ahead for investors” as it believes that in most cases futures prices are below fair market value, both in a six to 12 month period and, more particularly, beyond.

“Citi’s outlook for end-2016 projects higher prices for U.S. natural gas, crude oil, all base metals but especially copper and nickel as well as platinum and palladium,” analysts including Ed Morse said in the report. It also sees prices “mildly up across the staple cereals, but weak to very weak across the bulks. In short, a modest recovery.”

People have been trying to catch bottoms in commodities for years, getting their greedy little hands blown off in the process. If in fact 2016 maarks the bottom in commodities, expect to see a lot more of the bow tie on Jim Rogers ancient body, talking shit on CNBC about the virtues of farms and how his kids know mandarin.

FML.