Ariad Pharmaceuticals Inc.
ARIA may look down now but this sleeper has $311 million in cash!
Ariad Pharmaceuticals, Inc. (Nasdaq: ARIA) has seen a complete collapse of its stock price over the past few weeks losing close to 90% of its value after its lukemia drug Iclusig showed increased adverse blood-clotting events in patients and the Company announced they were discontinuing the Epic trial for patients, recently diagnosed with chronic myeloid leukemia.
Bargain hunters have stepped in betting ARIA is way oversold and this theory does have merit as ARIA currently has a very strong cash position of $331 million, amazing considering that ARIA now trades at a total market valuation of just $550 million.
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Many would argue that ARIA was in fact way overvalued back when it traded for $22 per share; that represented a $3.8 million market valuation for a Company that was losing money and for most sophisticated investors anyway there have been huge warning signs on ARIA since the day that the FDA approved the drug back on December 14 2012.
The approval included a Boxed Warning alerting patients and health care professionals that the drug can cause blood clots and liver toxicity. The most common side effects reported during clinical trials include high blood pressure, rash, abdominal pain, fatigue, headache, dry skin, constipation, fever, joint pain, and nausea.
Obviously too many sophisticated investors especially fund managers this boxed warning represented a massive red flag and they began to dump the stock right after the FDA approval and never stopped. From a peak of 9.77 million shares held by fund managers collectively right before the FDA approval, a year later they had sold 9.3 million shares.
This sentiment on ARIA stock in the months before its collapse was in sharp contrast to the mainstream Wall St. analysts, with 18 out of 22 ranking ARIA a Buy or Strong Buy with price targets in the $24-$29 range.
Conclusion: Anyone watching ARIA trade here might note as I have that unless there is bad news or other factors from current levels ARIA tends to rise as it is now. Of course its high risk as any minute more bad news could come prompting another collapse. At the same time ARIA looks way oversold from many angles; the Company has $331 million in cash on hand and trades at a mere $550 million market valuation and lclusig remains on the market and remains the only option for many in advanced stages of chronic myeloid leukemia.
Watch for continued updates as the ARIA story unfolds.
OTCMagic also has a new secret report on ARIA, to get it subscribe to OTCMagic right now, also everyone should know, we have something HUGE coming!
Ariad Pharmaceuticals, Inc.
Harvey J. Berger, M.D.
David L. Berstein, Esq.
ariad.com
STOCK INFORMATION
SYMBOL: NASDAQ: ARIA
Shares Outstanding: 185,106,733
Market Cap: $544,213,795
ARIAD Pharmaceuticals Inc. (ARIA) is a global oncology company that focuses on the discovery, development and commercialization on breakthrough medicines for cancer patients. The company is working on the development of new medicines that can help advance the treatment of different forms of leukemia, lung cancer and other hard to treat cancers. ARIAD, by using computational and structural approaches designs small-molecule drugs that regulate cell signaling that helps to overcome the resistance to the existing cancer medicines.
ARIAD has two categories of candidates in its pipeline; viz. Iclusig® (ponatinib) and AP26113 that are further divided into different studies, has an approved drug viz. Iclusig® (ponatinib); developed for treating adult patients suffering from chronic, accelerated or blast-phase chronic myeloid leukemia (CML) or Philadelphia chromosome-positive acute lymphoblastic leukemia (Ph+ALL), both of which are intolerant or resistant to prior tyrosine kinase inhibitor (TKI) therapy.
iclusig-03
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