It seems like we are getting into the slow part of the holiday season. News is slowing down as is the trading volume. I suspect we get less and less news as it gets held for JPM (if possible). It would not necessarily be bad for the sector to churn at these levels to build a base for another leg higher. The bias remains higher until proven otherwise as I have been saying but a pause at these levels would sort of make sense.
1. BHVN released positive data but it is for their migraine nasal spray and not the prevention trial. The trial was positive, which is fine but to really understand it we need to see the details. They will soon have their oral CGRP approved and a nasal spray is simply another mode of delivery. This could be different in the details. The nasal spray gets the drug into the system more quickly so you might see a quicker onset of benefit but the PR only talked about the endpoint at 2 hours. They mention a benefit at 15 minutes but I really want to see the details and compare it to the oral version. If there is a meaningfully quicker onset of benefit then this could differentiate from the orals but again we need to see the details.
2. People really want to see the prevention data that should be coming soon as well. I suspect the market cap assumes approval of the oral CGRP for the acute setting and probably has some valuation for the preventative but is likely not fully priced into the stock. A positive phase III on preventive and one that looks in the ballpark of the non-oral CGRPs would be the best case scenario and unlocks some more valuation. So keep an eye open for this trial as it is due in 4Q but I would not be completely surprised if they hold it for JPM.
3. I noted that CLVS will end in a sale of the company or a secondary. We got our answer: a secondary. So it looks like the move was a spectacular short covering rally that people then assumed was related to news and then it turned into a momentum/short covering rally. Good for the management for taking advantage to get some more cash as they certainly will need it given their burn rate. I am not convinced they will ever become cash flow positive but if one could figure out of path to that outcome then it could be worth buying but at this point I do not quite have confidence in them getting there.
I will end it here on the relatively slow news day. I hope everyone has a good day.
Disclosure: Long BHVN