"The only issue that concerns me, and you may be able to shed...

"The only issue that concerns me, and you may be able to shed some light on it, supertramp, is the "buy the rumour, sell the news" scenario. VLA's drop of over 50% from $1.30 following great trial results to 60c (before the eventual takeover), still baffles me. Traders sold it down (initially), so what would prevent a similar scenario from happening here?"

Hi Shellbell,

I think the problem with vla was there was no news after the good results.

There were high hopes for a deal, but it dragged on and on, and after time people start to give up/lose the faith/use the money for opportunities elsewhere etc.

vla's drug is competing in a very crowded competitive market. If you do a search for Keytruda on clinicaltrials.gov over 800 trials come up (see link below). So many of those trials are with Keytruda in combination with other drugs like vla's. Then there are the others like Yervoy (530 trials), Opdivo (815 trials) etc. Then the asx's Imugene could blow all of these out of the water!

With ftt it's a different marketplace altogether. The drug is competing against the standard (bandaging) care, which has hardly altered in decades. But remember that all subjects are screened first, and those who respond well to the standard care are kicked out. So that should alleviate Lodge Partners concern that perhaps the standard care group are doing better than in previous trials. In theory they should do much worse.

So in the ulcer wound care space there isn't much for the likes of Smith & Nephew and Johnson & Johnson to go for for competitive advantage.

It's also worth noting that these ulcer patients cost health authorities the world over a lot of money. With recurring wound dressings appointments and treatments. So ftt's product has the potential to save health authorities time and money, so hence it would be a very sell-able product.

As for the buy the rumour, sell the fact line. I think that is used when the fact isn't up to what was hoped for, like neu's recent deal. Hopes of $100m upfront partnership with the likes of Pfizer. The fact was $10m upfront with Arcadia.

No one sold down vla's fact that Merck offered $1.75 a share or Sirtex's deal or BIT's latest trial results released with the sp at 1.9c or whatever it was.

All imho,
cheers

https://www.clinicaltrials.gov/ct2/results?term=keytruda